LONDON (Alliance News) - Shares prices in London were lower soon after the open Wednesday, with mining stocks and Burberry Group leading the decliners in the FTSE 100, as investors focus on UK unemployment and average earnings figures, due at 0930 BST.
The large-cap FTSE 100 was down 0.6%, or 34.07 points, at 6,133.70. The FTSE 250 was down 0.3% at 16,795.10 and the AIM All-Share down 0.2% at 725.01.
Burberry Group declined 3.2%. The luxury retailer reported a fall in profit in its recently ended financial year, following a tough year which saw particular challenges in the Asian market, and the group announced a three-year investment and cost-saving strategy.
Burberry said its pretax profit in the year ended March 31 fell to GBP415.6 million from GBP444.6 million the year before, as revenue slipped to GBP2.51 billion from GBP2.52 billion, which Burberry blamed on a "difficult luxury sector" with a decline in footfall, particularly in Hong Kong.
Burberry said it will invest about GBP10 million in financial 2017 and then a further GBP20 million to GBP25 million per year over the following two years in order to improve the business and ultimately boost revenue. It also intends to deliver at least GBP100 million of annualised cost savings by financial 2019.
Burberry will pay a final dividend of 37 pence, which is up 5% year-on-year. It also will launch a share buyback programme of up to GBP150 million in financial 2017, its current financial year.
Miners also were lower, with Anglo American down 3.7%, Glencore down 2.4% and Rio Tinto down 1.8%.
Shares in Antofagasta were down 2.1%. The chairman of the Chilean mining group will stress later Wednesday that the company has not changed its "three-pillar strategy" and emphasise the importance of optimising its assets as it expects copper prices to remain low for the next one to two years.
Ahead of Antofagasta's annual general meeting Wednesday, Chairman Jean-Paul Luksic said 2015 was a year focused around optimising existing assets to adjust to the current environment of lower commodity prices as the company restructured its operations.
It was a tough year for Antofagasta as copper production in 2015 came in 11% lower than the company's guidance whilst copper prices were also 24% lower than they were in 2014. Unsurprisingly, that led to steep drops in earnings and also caused Antofagasta to scrap its final dividend payment - leaving only an interim dividend for shareholders to enjoy.
ARM Holdings was up 0.5% after initially declining. The chipmaker ARM Holdings said it has acquired UK-based imaging technology products company Apical for USD350.0 million in cash. ARM said Apical is a leading company in the field of imaging and embedded computer vision technology.
SABMiller was among the few blue-chip gainers, up 0.2%, despite reporting a fall in profit in its recently-ended financial year as revenue continued to be hit by negative foreign exchange translations, which it said it expects to persist in the current financial year.
The drinks giant said its pretax profit in the year ended March 31 fell to USD4.07 billion from USD4.83 billion the year before, as revenue decreased to USD19.83 billion from USD22.13 billion. SABMiller said its results were harmed by unfavourable movements in foreign exchange rates and noted that revenue would have risen by 7% on a constant currency basis. SABMiller will pay a total dividend of 122 cents, which is up 8% on the prior year.
In the FTSE 250, Booker was the best mid-cap performer, up 4.1%, after Goldman Sachs upgraded the food wholesaler to Buy from Neutral.
Shares in Marston's were up 2.8%. The pub operator and brewer said it swung to a profit in the first half of its financial year as revenue grew strongly following the openings of new pubs and its acquisition of the Thwaites beer business last year.
Marston's, which makes Hobgoblin ale, said it made a pretax profit of GBP22.8 million in the 26 weeks ended April 2, having suffered a pretax loss of GBP27.5 million in the first half of the prior year. Revenue grew to GBP444.3 million from GBP400.5 million.
Meanwhile, Marshalls was down 10% despite the concrete paving manufacturer said revenue in the first four months of 2016 edged up against tough comparatives and a softening commercial market. Marshalls said revenue for the four months to the end of April was GBP120.0 million, up slightly from GBP119.0 million a year earlier.
In Europe, the CAC 40 index in Paris was down 0.5%, while the DAX 30 in Frankfurt was down 0.6%.
The UK ILO unemployment rate is due at 0930 BST, with expectations for it to remain unchanged in March at 5.1%, according to FXStreet.com.
Lloyds Bank economist Rhys Herbert said that despite a tight UK labour market, "pay trends continue to disappoint". "Average earnings growth [including bonuses] slowed to an annual 1.8% in the three months to February, with weak bonuses set to push this down further to 1.6% in the three months to March," said Herbert.
Meanwhile, CMC Markets chief market analyst Michael Hewson said he expects average earnings to increase by 2.3% excluding bonuses in the three months from January to March, compared with a year earlier. In the three months to February, wages excluding bonuses rose by 2.2% on a yearly basis.
In Asia on Wednesday, the Japanese Nikkei 225 index fell 0.1%. Japan's gross domestic product jumped 0.4% on quarter in the first quarter of 2016, the Cabinet Office said. That topped forecasts for an increase of 0.1% following the downwardly revised 0.4% contraction in the previous three months. On a yearly basis, GDP surged 1.7% - blowing away forecasts for a gain of 0.3% following the downwardly revised 1.1% contraction in the three months prior.
In China, the Shanghai Composite dropped 1.3%, while the Hang Seng index in Hong Kong is down 1.6%.
Wall Street ended down on Tuesday, with the Dow 30 down 1.0%, the S&P 500 down 0.9% and the Nasdaq Composite down 1.3%.
At 1900 BST, the Federal Reserve will release the minutes from Federal Open Market Committee meeting held on April 27. The FOMC left its benchmark interest rate unchanged in a range of 0.25% to 0.50% in April. Low inflation and rough patch for the US economy have kept the Fed from raising interest rates since December, when rates were hiked for the first time in a decade.
Also in the economic calendar Wednesday, eurozone inflation is due at 1000 BST, while the UK Conference Board leading economic index is at 1330 BST. In the US, the EIA crude oil stocks change data are due at 1530 BST.
By Daniel Ruiz; danielruiz@alliancenews.com
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