LONDON (SHARECAST) - Mining stocks are dragging London lower after the US central bank, the Federal Reserve, decided yesterday not to pump more funds into its quantitative easing programme.
Silver and gold miner Fresnillo leads the mining sector lower, while fellow precious metals miner Randgold is also in the dog-house, after gold prices slumped last night following the Fed's decision.
On the UK corporate scene, struggling package tour operator Thomas Cook is under the cosh again despite delivering profits above expectations.
Thomas Cook made an underlying profit before tax of £175m in the year to the end of September, down from £248m the year before. The market had been expecting profits of £168.5m. Revenue rose to £9.8bn, versus market forecasts of £9.2bn, from £8.9bn last year. Exceptional charges of £573m resulted in a statutory loss before tax of £398m, versus last year's profit of £42m.
Crucially, the company said that, despite its well-publicised problems with its refinancing, customers are continuing to book holidays with the company.
"Bookings outside the UK were broadly unaffected by news of our refinancing and in the UK bookings have recovered well," said Sam Weihagen, group chief executive of Thomas Cook.
However, the company said that the new financial year has got off to a quiet start, and warned that the year looks set to be another challenging one for the company.
Clothing firm Supergroup saw underlying profit before tax ease to £13.0m in the 26 weeks to 30 October from £13.5m at the interim stage last year. Group revenue shot up 51% to £136.1m from £90.3m the year before. The company said that the warehouse system and operational issues that affected its performance have been resolved. The profit impact of the distributions systems foul-up has been put at £8.8m for the full-year.
The good news for Supergroup shareholders is that its retail business is seeing an improving trend in the third quarter. In a statement the firm said: "We are pleased to report that trading in the Retail business in Q3 [third quarter] has shown an improved trend over Q2 as our operational issues have been progressively rectified. In the first six weeks since the end of the period Retail has delivered a positive like for like performance."
Another outfit having a good third quarter is Betfair, the online bet-matching marketplace. Underlying revenue for the first half of its financial year was £191.3m versus £188.5m the previous year. Betfair claims its strong underlying performance has continued into the third quarter “with core Betfair revenue up 13% against the prior year”.
Energy firm BG Group, one of the contracting companies in the giant Karachaganak gas-condensate field in north-west Kazakhstan, said that agreement has been reached for Kazakhstan's KazMunaiGas (KMG) to acquire a 10% interest in the project. This will be done by each of the contracting companies transferring 10% of their rights and interest in the Karachaganak Final Production Sharing Agreement to KMG, in return for $3bn in cash. BG's stake will decline to 32.5% to 29.25% as a result.
Set-top box maker Pace has announced a new chief executive to take the helm after a difficult year for the company.
Daily Mail and General Trust has agreed to sell a majority stake in Teletext to its management who will assume day-to-day operating control of the business.
Computing firm Logica has made the bold decision to accelerate its restructuring programme in order to position the business for a tougher economic climate, a decision that will lead to more than 1,300 job losses.
FTSE 100 - Risers
Next (NXT) 2,604.00p +0.54%
Resolution Ltd. (RSL) 252.70p +0.32%
Morrison (Wm) Supermarkets (MRW) 316.60p +0.16%
British American Tobacco (BATS) 3,022.50p +0.05%