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Reports UK

UK stock market morning note (January 21, 2014)

January 21, 2014, Tuesday, 11:01 GMT | 06:01 EST | 16:31 IST | 19:01 SGT
Contributed by SVS Securities

The FTSE 100 is called to open higher this morning following the gains overnight in Asia. Today's main economic event is the release of the CBI industrial trends survey with the corporate announcements diary picking up again both in the UK and in the US. Investors will also keep a watchful eye on any news coming out from the IMF which is expected to upgrade its UK economic forecast in its latest World Economic Outlook to 2.4% this year, up from 1.9% last October. Commodity prices are flat to lower and on the foreign exchanges, the pound is up against both the dollar and the euro but within narrow trading ranges.
Company Announcements
Marston's AGM and IMS reports that performance over the financial year to date has been 'encouraging', including 'good' trading over the Christmas and New Year period with a record 55,000 meals served on Christmas Day. It added that profitability is in line with its expectations and performance in Q1 has been good with growth in each of its trading divisions.   
Unilever Final Results see turnover down 3% to EUR49.8bn although underlying sales growth was 4.3% with volume 2.5% and price 1.8%. Emerging markets underlying sales growth was 8.7% with volume 4.8%. The core operating margin rose 40bps to 14.1% driven by the gross margin which was ahead 110bps. Operating profit and net profit rose 8% and 9% to EUR7.5bn and EUR5.3bn respectively. It noted that it anticipates ongoing volatility in the external environment and is positioning itself accordingly. It added that the focus remains on delivering profitable volume growth ahead of its markets, steady and sustainable core operating margin improvement and strong cashflow.
IMI Proposed Return of Cash. Following the company's completion of the disposal of its Beverage Dispense and Merchandising divisions, it has today announced the terms of its proposed return of GBP620m to shareholders and a share consolidation. The company will return 200p per existing share to shareholders on the register as of 14 February 2014 and a consolidation of every 8 existing ordinary shares into 7 new ordinary shares.
Melrose Industries Proposed Return of Capital. Following the disposal of certain of its businesses in H2 2013, it intends to use part of the net proceeds to return GBP600m in cash to shareholders. This is equivalent to 47p per existing share with shareholders being given a choice as to how they wish to receive these proceeds. There will also be a 11 for 13 share capital consolidation with both actions requiring shareholder approval in General Meeting which is expected to be held on 7 February 2014.

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