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Reports UK

UK stock market morning note (July 10, 2014)

July 10, 2014, Thursday, 10:36 GMT | 05:36 EST | 14:06 IST | 16:36 SGT
Contributed by SVS Securities

The FTSE 100 is called to open flat to slightly higher this morning following the performances on Wall Street and in Asia following the release of the FOMC meeting minutes which confirmed that its QE programme will finally end in October but gave no more direction on interest rates. Overnight we had domestic economic news from the RICS showing that house price growth slowed in June with the balance dropping to +53 (+56) on the combination of recent moves in the housing and mortgage market starting to have an impact. The economic diary today also sees the release of domestic trade balance figures, the Bank of England rate decision followed by the latest US weekly jobless claims. Commodity prices are flat to slightly firmer and on the foreign exchanges, the major currencies are virtually unchanged ahead of these news announcements.

Company Announcements

Associated British Foods

IMS reports that group revenue for the 40 weeks to 21 June 2014 was 2% below the same period a year ago at actual rates but up 2% at constant currency. In Q3, Primark sales rose 22% at constant currency with Ingredients also ahead at 9%. However, Sugar, Agriculture and Grocery revenues were all down in the period at -20%, -10% and -5% respectively. It added that full year adjusted EPS is now expected to be ahead of last year, with better profit progress in Retail, Grocery and Ingredients offsetting the adverse impacts of lower sugar prices and sterling's strength.


Q1 Trading Update/IMS reports that in the 3 months to end June 2014, retail sales (historically the smallest quarter for retail) rose 17% underlying and 9% at reported FX. Of this 17% underlying growth, comparable sales growth was 12% with the balance coming from new space. It noted that in Retail for FY2015, net new space is still expected to contribute low to mid-single digit percentage growth in total retail revenue. In Wholesale (ex Beauty) it still expects revenue at constant exchange rates to be broadly unchanged. In terms of retail/wholesale profit, if exchange rates stay at current levels, the full impact on reported profit in FY2015 will be material. In licensing it continues to expect broadly unchanged revenues at constant exchange rates in both Japan and global product licences.

Barratt Developments

Trading Statement reports a significant rise in housing completions in response to an uplift in consumer demand with total completions up 8.6% to 14,838 and net private reservations per active site per week ahead 19% at 0.69. Total forward sales are up 44% to GBP1.2bn and it expects to exceed its 18% ROCE target in FY2014, 2 years ahead of schedule. PBT is expected to be ahead of the top end of analyst forecasts at around GBP390m. It added that the market remains positive with strong demand for new homes across the country.