London midday: Footsie turns blue

An unexpected upward revision to UK second quarter growth estimates has kept London moving in the right direction, breaking into positive territory at lunchtime.

Britain's economy expanded more than initially thought in the second quarter, figures showed today. Gross domestic product (GDP) grew by 1.2% during the three months to June, an even higher reading than the better than expected 1.1% growth reported for the period last month. The upward revision comes amid strength in the construction industry.

Attention will turn to America shortly where the latest revision to US growth data for the three months to June is due.

Over here, commodity plays are still struggling. BP, Tullow, Anglo American and BHP Billiton are proving a drag, but most are off their worst levels.

Banks are also a weak spot after ratings agency S&P suggested management at Barclays, HSBC, Lloyds and RBS played only a bit part in their recovery, with government stimulus programmes far more important.

The bid battle for oil explorer Dana Petroleum is widely regarded as done and dusted but the North Sea-focused firm is not giving up without a fight. It cranked up pre-tax profit by 274% in the first half of 2010 to £82m, pointedly noting that this was higher than its profit figure for all of 2009. The UK group said it will provide detailed reasons for its rebuttal of KNOC's £18 per share offer by 8 September.

JKX Oil & Gas thanked higher oil prices and an increase in overall production for an 11% rise in after-tax profit for the half-year, but it warned output had fallen in the third quarter. Sales jumped 33% to $104.5m.



In company news, serviced office specialist Regus said the market remains very challenging and difficult to predict as it announced a slump in half-year profits. Profit before tax and exceptional items in the first half of 2010 tumbled to £9.7m from £50.7m the year before. After exceptional items the company posted a loss of £6.1m, compared to a profit of £69.0m the year before. Revenue slipped to £515.5m from £557.4m a year earlier.

Engineering conglomerate Melrose saw profits surge in the first half despite revenue going slightly ex-growth year-on-year. Headline profit before tax for the first half of 2010 was £78.1m, up from £53.0m the year before, while "as reported" profit before tax was £60.4m, versus £38.4m last year.

Rightmove, the property website, ramped up revenue by 26% in the six months to June 30 and has continued that kind of performance through July and into August. Profit before tax increased to £24.5m from £17.6m a year ago on revenue from continuing operations up to £39.2m from £31.2m as average spend per advertiser rose 20% to £365 per month.

Strong growth in Asia helped media agency Aegis lift underlying interim profits by a fifth. Total revenue rose by 4% to £663m, with operating profits up 20% at £61.1m. Pre-tax profits rose by 8% to £48.3m.