Friday morning business bulletin
The London market powered ahead today after investors on both sides of the Atlantic took heart from economic developments in the US.
The FTSE 100 Index stood 50.8 points higher at 6138.1 after an hour of trading, with the City taking its cue from the Dow Jones Industrial Average, which closed above the 13,000 barrier for the first time since January.
As well as falling oil prices, US traders noted in-line inflation figures and bought on hopes that recent cuts in interest rates will stimulate growth. The optimism lifted building hire firm Wolseley, which generates much of its sales in North America. The stock stood 4% higher, a gain of 21.5p to 521.5p.
It was beaten to the top of the Footsie risers board by fashion chain Next, which rose 52p to 1199p ahead of a trading update planned for next week. There was also a strong start for Dairy Milk maker Cadbury, which began life as a pure confectionery firm after spinning off its American drinks arm. Shares were 9p higher at 631p.
Department store chain John Lewis today said changeable trading patterns pushed sales growth below recent trends last week.
The group reported a sales rise of 1.1% in the week to last Saturday, leaving growth in the first 13 weeks of the financial year ahead 3.2%.
Patrick Lewis, director of retail operations, said the week started strongly, but sales then slipped before mid-season promotions by a couple of competitors boosted footfall during Thursday and Friday. A weaker Saturday, due to sunny weather and sporting events, completed the mixed picture.
Out of 26 stores, the chain’s outlets at London’s Oxford Street, Southsea and Aberdeen achieved sales gains last week. John Lewis Direct - the company’s internet and catalogue business - maintained its recent strong growth record with an improvement of 44.6% on a year earlier.
Peter Jones, in London’s Sloane Square, posted a sales fall of 13.1% as the outlet continued to show signs of feeling pressure from the current squeeze on the financial sector. There were also sizeable sales falls at Welwyn, High Wycombe and Peterborough.
John Lewis said strong sales of computers, supported by cameras and televisions, gave the electronics and home technology department a boost during the week.
Pest-control-to-hygiene group Rentokil Initial today outlined a seven-point action plan for its ailing City Link delivery arm after the division’s troubles more than halved first quarter group profits.
The firm posted adjusted pre-tax profits of £14.6m for the three months to March 31, down 59% year-on-year.
Rentokil, which warned over profits last month as City Link’s woes continued, said management had begun to see early signs of service improvement at the delivery operation, but stressed it would "take some time" to return City Link to health".
Rentokil said City Link made losses of £15.4m in the first quarter, following an 8% fall in revenues.
City Link’s new management team is working on a turnaround strategy focusing on improving customer service, developing integrated information systems and improving the hub and depot network.
The pound at 9am was US$1.9843 compared to US$1.9753 at the previous close, while the euro at 9am was £0.7798 compared to £0.7826 at the previous close.
