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Reports UK

UK stock market morning note (May 20, 2014)

May 20, 2014, Tuesday, 07:09 GMT | 02:09 EST | 10:39 IST | 13:09 SGT
Contributed by SVS Securities

The FTSE 100 is called to open slightly higher this morning following the overnight performances on Wall Street and in Asia although sentiment is likely to remain cautious. The economic diary today focuses on the UK with the release of the latest inflation figures. Commodity prices are flat to slightly lower and on the foreign exchanges, the major currencies are virtually unchanged ahead of the inflation numbers.

Company Announcements

Marks & Spencer

Final Results see group sales up 2.7% at GBP10.3bn with total UK sales +2.3%: food +4.2% and general merchandise flat. Like-for-like UK sales rose 0.2% with food ahead 1.7% and general merchandise down 1.4%. International sales and multi-channel sales grew 6.2% and 22.8% respectively. Underlying PBT declined 3.9% to GBP623m and the full year dividend was maintained at 17p a share. Guidance for the financial year 2014/15 includes operating costs to rise by around 4% as a result of an increase in depreciation, inflation and the addition of new space with group capex expected to be lower at between GBP500m-GBP550m. It added that as previously indicated, its new M& site will take 4 to 6 months to settle in and this will have some impact on general merchandise in Q1. The improving trend in clothing sales seen in Q4 has continued and the food business is still outperforming the market.   


Final Results see group revenue 1.9% lower at GBP43.6bn with EBITDA down 7.4% at GBP12.8bn. Adjusted operating profit was GBP7.9bn, including GBP3.2bn for Verizon Wireless to 2 September 2013. Impairments totalled GBP6.6bn in Germany, Spain, Czech Republic and Romania and the total dividend is raised 8% to 11p a share. Guidance for the 2015 financial year is for EBITDA to be in the range of GBP11.4bn-GBP11.9bn, total capex of around GBP19bn in the 2 years to March 2016, with capital intensity subsequently normalising to around 13%-14% of annual revenue and intends to grow the dividend. It added that in the short term it continues to face competitive, macro-economic and regulatory pressures, particularly in Europe and still needs to secure its recovery in some key markets.