Market Report: Burberry buoyed by strong trading in Asia and US

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The Independent Online

If yesterday's share price rise at Burberry is anything to go by, today's trading statement from the upmarket clothing retailer should make pleasant reading for its shareholders. Burberry, which soared 17.5p to 372.5p, is tipped to unveil a 14 per cent rise in underlying sales for the six months to the end of March.

If yesterday's share price rise at Burberry is anything to go by, today's trading statement from the upmarket clothing retailer should make pleasant reading for its shareholders. Burberry, which soared 17.5p to 372.5p, is tipped to unveil a 14 per cent rise in underlying sales for the six months to the end of March.

The group is believed to have enjoyed strong trading in Asia and the US for the period and an improvement at its UK business over the fourth quarter. Business in Hong Kong should be particularly strong for the retailer as the territory's economy continues with its recovery from last year's Sars outbreak. Along with the sales figures, investors will be looking for guidance from Burberry's management on the level of profitability the company is likely to achieve for the year just gone.

The group's shares have not been the best performer over the past few months, but analysts note that the company has a history of topping market expectations. Should that happen today, analysts believe Burberry stock will then motor ahead in the next few weeks.

The main factor thatmay weigh on the shares going forward is GUS's 65 per cent holding. The lock-up period governing this stake is due to expire in autumn, potentially leaving a massive stock overhang.

Elsewhere, blue chips made progress as the FTSE 100 index closed 26 points better at 4,415.8. ICI rose 1.25p to 230.25p, buoyed by Monday's forecast-beating figures from its US paints peer Sherwin-Williams. It unveiled a 14 per cent jump in first-quarter sales leaving brokers to argue that if business is going well at Sherwin, then it must also be going well at ICI's paints unit, which is the No 2 player in the American market.

Johnson Matthey gained 6.5p to 900.5p on the back of an upgrade from Cazenove. The heavyweight broker raised its recommendation from "long-term buy" to "buy" and told its clients that the stock looked cheap at current levels. There was solid demand for Exel throughout the session, helping the stock register a 12.5p rise to 748p. Dealers said the logistics group was boosted by the latest airfreight data coming out of the US, which showed a sharp pick-up in volumes.

Close Brothers gained 5p to 855p despite Bridgewell Securities hurriedly downgrading its forecasts following a visit to the merchant bank's market-making division, Winterflood. "Given the ease off in volumes in March and April to date, our profit forecasts for Winterflood are probably too optimistic, hence we have reduced them to £40m from £50m,"the broker said. As a result, Bridgewell has been forced to slash its full-year profits estimate for Close Brothers from £129m to £120m.

Woolworths, held steady at 40.25p, as gossips talked of the pick'n'mix retailer having enjoyed a relatively good Easter while ScS Upholstery gained 9p to 255p on whispers that trading at the group has been well ahead of hopes so far this spring.

Brokers hear that business is booming at Peter Hambro Mining, 11p better at 521p. The Russia-focused gold-mining group is due to post full results that are unlikely to disappoint.

The company has continued to benefit from the strong gold price and accompanying the figures may well be news that maiden profits are starting to feed through from PHM's Omchak joint venture.

Dana Petroleum put on 2.5p to 276.5p on news the explorer has started drilling at its Pangkah production-sharing contract, near Indonesia.

Analysts believe that if the wells prove to be a success they could add between 20 and 25p to Dana's net asset value. Scott Tod retreated 1.5p to 62.5p as Peter Seabrook, a non-executive director, sold 70,000 shares at 63.5p. Shares in the cash machine operator have more than doubled since the start of 2004 and not so long ago gossips suggested that a predator might be running the slide rule over the company.

Punters should keep an eye on London Boston Investments, steady at 8p. Bob Morton, the serial entrepreneur, recently picked up a 13 per cent stake in the AIM-listed group, leaving him with a total holding of 16 per cent. Word has it the company will announce a major deal before the end of the week. Last month LBI informed the market that it was looking at the acquisition of what it described as a "privately-held, profitable trading company".

FfastFill improved 0.37p to 8.62p on rumours that the software group is close to winning a major new contract for its ASP service, which should give revenues a boost in the coming year.

And finally, there was yet more positive news for TripleArc. The online printing specialist unveiled a five-year contract with BAA worth £10m, pushing its stock 2.5p better to 18.75p. The deal will see TripleArc manage all of BAA's print requirements, across its seven UK airports and corporate headquarters.

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