By Sarah Turner
Pub operators gained in the British stock market on Thursday,
with shares of Enterprise Inns soaring after the firm highlighted
an improved trading trend.
Enterprise Inns shares jumped 22% outside the top FTSE 100
index, while rival Punch Taverns rose 10.1%, also outside the top
index.
Enterprise Inns said that a drop in average net income per pub
eased to around 4% in the 16 weeks to Jan. 16, down from a drop of
8% over the firm's last financial year. The result was helped in
part by selling underperforming pubs, the firm said.
"While extreme weather, particularly during the first two weeks
of January, kept many customers at home and disadvantaged some
pubs, it brought extra custom to others," the firm said.
The firm called the environment for the U.K. pub industry
"testing" and said that rental income is likely to remain under
pressure through the coming year.
Enterprise Inns is part of the "tied" pub system in the U.K,
where pub landlords rent their pub from the parent company and also
buy all their beer from it.
"Enterprise's interim management statement showed that its
estate reshaping strategy is working and that's good news for all
the tenanted operators," said analysts at Evolution Securities.
Turning to the top index, the U.K. FTSE 100 index edged up 0.2%
to 5,433.55. Other European shares were also mildly higher, while
U.S. stocks were mixed.
Stocks around the globe were hit on Wednesday as speculation
that China may rein in bank lending prompted a sell off in mining
stocks. Miners, which are perceived as most exposed to China, fell
again on Thursday with Kazakhmys shares down 2.8%, weighing on the
broader market.
However, pharmaceutical stocks are having a better week as
worries that U.S. health-care reforms will lead to a drop in prices
faded after Republican Scott Brown won the U.S. Senate election in
Massachusetts on Tuesday night. Brown has promised to help block
the Obama administration's health-care-reform efforts.
As well as a 1.5% gain for GlaxoSmithKline (GSK), AstraZeneca
(AZN) shares rose 1.8% after Morgan Stanley lifted the firm to
overweight from equalweight.
"Worsening generic pressure and R&D management changes lead
us to expect material cuts to internal small research spend in
2010/11, after a decade of dismal internal R&D returns. We
expect AstraZeneca and Sanofi-Aventis to be among the leaders in
externalizing research, and this is a key driver of our upgrade of
AstraZeneca," the broker said.
Other top index gainers included water company United Utilities
, up 5.2% after it said trading from Oct. 1 to Jan 20 met
expectations.
The firm also said it will cut its dividend by 12.5% in 2010, a
better result than a 20% to 25% cut the market was anticipating,
according to analysts at Evolution Securities.
"United Utilities' lower-than-anticipated dividend per share cut
is very likely due to greater capital expenditure and operating
expenditure efficiency targets than we have assumed," they
said.
Carnival Corp. (CCL) shares rose 3.1% after it will resume its
quarterly dividend, which was suspended effective March 2009. The
board declared a dividend of 10 cents a share and approved a record
date of Feb. 19 and a payment date of March 12.
Back outside the top index, shares of low cost airline easyJet
jumped 5.6% after sales in the three months to Dec. 31 rose 10.5%
to 607.5 million pounds.
EasyJet said the underlying performance of its business in the
first quarter has been encouraging and it remains on track to
deliver substantial profit improvement during 2010.
Shares of Russian gold miner Petropavlovsk climbed 3.9% after it
said fourth-quarter attributable production rose to 133,500 ounces
from 126,800, bringing full-year total production to 486,800
ounces.
Its original 2009 goal was 460,000 to 510,000 ounces. Production
for 2010 is currently expected to be between 670,000 and 760,000
ounces, it said. It's also going to resume dividend payments.