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UK stock market morning note (February 25, 2013)

The FTSE 100 is called to open higher this morning although gains may be limited as investors look ahead to the outcome of the Italian general election which goes into its second day today and the news overnight from China with the HSBC flash manufacturing PMI figure coming in below forecast at 50.4. There is no major US or UK economic news on  the agenda for the rest of today. Commodity prices are mixed and on the foreign exchanges, the pound is also mixed against both the dollar and the euro. Attention will remain on sterling as the market reacts to Friday night's downgrade from Moody's of the UK's AAA credit rating, although the news was not entirely unexpected. Moody's stated the development was due to sluggish economic growth and austerity continuing to affect the government's finances in the second half of the decade.

Company Announcements

Pearson Preliminary Results saw sales up 5% at constant exchange rates at GBP6.1bn with adjusted operating profit ahead 1% at GBP936m. The dividend is raised 7% to 45p but operating cashflow declined to GBP788m (2011:GBP983m). It also announced gross restructuring costs of GBP150m for 2013 as it accelerates the shift of the education business towards fast growing economies and digital and services businesses. It added that it expects tough trading conditions and structural industry change to continue this year, and excluding restructuring costs and including Penguin for the full year, expects to achieve 2013 operating profit and adjusted EPS broadly level with 2012.  

Associated British Foods Pre-Close Trading Update reports that Interim Results will be ahead of its expectations, driven by Primark although full year expectations are unchanged and earning growth for the full year will be heavily weighted towards H1.  

Persimmon Final Results saw underlying PBT rise 52% to GBP225.1m on revenue ahead 12% at GBP1.72bn. There will be a first cash return of 75p a share to be paid on 28 June 2013, subject to shareholder approval. It added that it had made a strong start to the new year with forward sales reaching the GBP1bn milestone, with mortgage availability remaining the key constraint to the housing market. However, it noted signs of the impact of the Funding for Lending scheme and anticipates increasing its active outlet number to around 390 sites by the end of June. 

Domino's Pizza Final Results saw system sales up 12.8% to GBP598.6m and PBT including Germany and Switzerland ahead 10.8% to GBP46.7m. The final dividend is raised over 16% to 7.9p a share. Online sales now account for 55.7% of UK delivered sales. It added that it had made a 'solid start' to the first 7 weeks of 2013 with lfl sales in the UK up 1.6%, although the weather impacted trading during this period.