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Reports UK

UK stock market morning note (March 27, 2014)

March 27, 2014, Thursday, 08:56 GMT | 04:56 EST | 14:26 IST | 16:56 SGT
Contributed by SVS Securities

The FTSE 100 is called to open lower this morning following the overnight performances on Wall Street and mixed outcome in Asia on the continuing uncertainty surrounding the Ukraine situation. The economic diary today sees the release of domestic retail sales data, US final GDP quarter figures, the latest US weekly jobless claims and pending home sales numbers. Commodity prices are mixed with oil and base metals slightly lower and copper marginally better and on the foreign exchanges, the dollar is slightly higher against the pound, euro and yen but all are continuing to trade within narrow ranges ahead of these data releases.


Company Announcements

Compass

Trading Statement reports that it has made a good start to the year with organic revenue growth in H1 expected to be just over 4% with an increase in the operating profit margin of around 10 bps. Revenue has been driven by continued high levels of new business, stable retention and positive lfl revenue growth. The underlying trends in the three regions have been consistent in the two quarters with strong growth in North America and Fast Growing & Emerging region and signs of stabilisation in Europe and Japan. It added that its expectations for the full year remain positive and unchanged, notwithstanding the translation impact of ongoing movements in foreign exchange.

Babcock

It has announced the proposed acquisition of Avincis and a fully underwritten GBP1.1bn rights issue. The company has entered into a conditional agreement to acquire Avincis for GBP920m which will be funded via a fully underwritten rights issue of 5 new ordinary shares at 790p each for every 13 existing ordinary shares. Avincis is a leading provider of helicopter and fixed wing services in mission critical operations with Babcock believing that the deal will create a strong platform for future growth and enhance value. Given the size of the proposed deal, it constitutes a Class 1 transaction and is therefore conditional, among other things, upon shareholder approval in General Meeting which will be held on 16 April 2014.

London Stock Exchange

Pre-Close Period Update notes continuing momentum in Q4 with primary and secondary market activity levels increasing over the past year with the improvements in the capital markets also feeding through into its post trade businesses. It added that it believes it is well positioned with good progress continuing to be made on the integration of LCH.Clearnet. It also confirmed that it is to change its accounting year end from 31 March to 31 December with effect from 1 April 2014.