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Reports UK

UK stock market morning note (March 25, 2014)

March 25, 2014, Tuesday, 12:17 GMT | 08:17 EST | 17:47 IST | 20:17 SGT
Contributed by SVS Securities

The FTSE 100 is called to open higher this morning on hopes that the Chinese Government may look to introduce stimulus measures to limit the economic slowdown in the country. However, gains may be limited by the performances overnight on Wall Street and in Asia together with the ongoing Ukraine situation. Today's economic diary will focus on the release of the domestic inflation figures and the CBI Realised Sales survey. These will be followed this afternoon in the US with the CB consumer confidence numbers and new home sales data. Commodity prices are firmer and on the foreign exchanges, the major currencies are range bound.

Company Announcements


Half Year Results see trading profit of the ongoing businesses up 8.8% to GBP360m on revenue ahead 5.2% at GBP6.4bn including lfl sales growth of 3.2%. The trading margin for the ongoing businesses increased 0.2% to 5.6% and the dividend is raised 25% to 27.5p, including a rebasing of 15% to reflect its sustainable cashflow. It highlighted good growth in the US and UK and a modest improvement in lfl growth in the Nordics, although there was continued weakness in Central Europe and Canada. It noted that the lfl revenue growth rate in the US since the end of the period has been in line with what the business generated in Q1 and the lfl revenue growth rate for the group has been 'broadly consistent' with the H1 performance. It added that it expects group lfl revenue growth to be about 4% for the remainder of the year.    


Trading Update and Pre-Close Statement notes that it expects to deliver H1 performance ahead of its January 2014 guidance. Revenue per seat growth is now expected to be around +1.5% with cost per seat expected to be around +0.5% (+c1.5%). It added that its H1 loss before tax will now fall in the range of GBP55m-GBP65m (previous guidance GBP70m-GBP90m), which compares to a prior year pre-tax loss of GBP61m.

Royal Mail

As part of its ongoing efficiency programme it is today launching a consultation on a proposal to achieve a net reduction of around 1,300 roles, the vast majority in its operational and head office managerial positions. The programme is expected to deliver annualised cost savings of around GBP50m, of which GBP25m will be realised in 2014-15. A charge of around GBP100m will be recognised in transformation costs, resulting in a total charge of GBP230m for 2013-14. It added that the underlying trends for the full year are expected to be 'broadly in line' with that of H1.