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UK stock market morning note (January 03, 2013)

The FTSE 100 is called to open higher this morning to consolidate its move through the 6,000 level following the gains overnight on Wall Street after the relief rally over the last minute deal to avoid the US 'fiscal cliff'. However, investors may take a more cautious approach in trading today as the implications of the US deal are evaluated so further initial upside may be limited. Overnight we had Chinese non-manufacturing PMI come in at 56.1, which was up on the previous month. The economic diary is now focused on the release of domestic construction PMI data followed at lunchtime in the US by the ADP jobs report and the latest weekly jobless claims, with the former potentially providing a guide to the non-farm payrolls tomorrow, and this evening after the UK market has shut the FOMC meeting minutes are due out. Commodity prices are mixed and on the foreign exchanges, sterling is lower against the dollar but up against the euro.
 

Company Announcements

Next Trading Statement notes that whilst sales have been in line with its expectations, cost control measures and gross margins have been slightly better. As a consequence, it has narrowed its profit guidance to the top of its previous range and now expects profits to be within GBP7m either side of GBP618m. It added that it expects the consumer environment in the year ahead to remain subdued but steady, with internal budgets based on growth in Next brand sales of between 1.5% and 4% with underlying PBT up broadly in line with sales. It expects to generate surplus cash of GBP250m in 2013 after capital investment, tax and dividends, which it intends to return to shareholders via share buybacks.

John Menzies Pre-Close Trading Update notes that it anticipates full year results to be in line with its expectations. Following a series of restructuring actions across its divisions, the full year exceptional charge will be in the region of GBP18m. Net debt at the year end is expected to be below GBP100m. It added that the Finance Director will step down in May 2013 as will one of its non-executive Directors.