London open: Modest gains for blue chips
London's leading index has surged past the 6,300 mark, helped by a 9% jump in London Stock Exchange's value after some recent losses.
British Airways is also flying high after its profits jumped to £883m (2007: £611m) in the year to March even though its fuel bill topped £2bn, but it is very cautious on the current year. " The first quarter will be particularly difficult," it said adding it is reviewing costs across its whole network.
Nuclear power generator British Energy has received a range of takeover proposals, including some priced above Thursday's closing share price. "The board has reviewed the proposals and has decided that discussions should continue with all the parties concerned. The board wishes to stress that each of the proposals requires further development and that the process is therefore likely to continue for a number of weeks," it said in a statement.
Shares in Compass moved higher after Goldman Sachs upgraded the caterer to 'neutral' from 'sell' following its first half results. The broker said Compass was managing issues such as food cost inflation effectively and continuing to reduce costs.
Ladbrokes profits increased by 13%in the four months to April 30. Gross win increased by 16% and by 34% including the contribution from "high rollers." The High Rollers chipped in £40m but their activity has recently fallen to de minimis levels, Ladbrokes said. 'Gross win grew strongly during the period and, whilst our business has seen no evidence yet of a consumer downturn, we remain mindful of general economic conditions," Chris Bell, chief executive, said.
Housebuilder and contractor Kier expects to meet profit expectations this year barring any further significant market setbacks for its residential business, where reservations are down 35% on last year and margins are under pressure. Conditions for its property business have also continued to deteriorate over the last few months. Construction and support services are both trading well.
Capital & Regional said its underlying tenant business remained resilient in the first quarter with all indicators trading within their normal range. Group debt at the end of March had been reduced from £270m to £114m, excluding £386m of debt secured on the German portfolio which is non-recourse, as it seeks to ensure it remains within its banking covenants against a background of declining property valuations.
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An unnamed shareholder in Rightmove is raising about £60m in a secondary placing of 16.2m shares, around 13% of the online property group.
IT services provider Computacenter said pre tax profit will be more skewed towards the second half, which may result in the first half being slightly below the same period last year. "This is due to not achieving our revenue growth objectives to date, despite increased investments, and the increased proportion of Group profits generated in Germany, which have always been biased towards the second half of the year," said the group.
Flat panel speaker technology firm NXT, "within sight" of breakeven, has said the level of increase in second half sales revenue will depend on the outcome of ongoing licensing talks.
The company, which has soared in value recently following news of a deal with motor giant Toyota, said business has been broadly in line with expectations so far this year.
Trading since the start of the year has been "encouraging" at Harry Potter publisher Bloomsbury, which is also feeling the positive benefit of cost cutting efforts.
"Group operating performance for the period has been encouraging and is in line with management's expectations with no material events or transactions affecting the group," said the company in a statement Friday.
