ADN.L Share News (ADN)

LONDON (Alliance News) - Major London-listed companies reporting earnings Tuesday fell into two starkly different camps in terms of payouts to shareholders.

As miner BHP Billiton, power generator Drax and bookie Ladbrokes slashed their dividends, a string of companies in stronger sectors declared large increases and special payouts, including IHG, Persimmon, Provident Financial and Croda.

Here is what you need to know at the London market open:
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MARKETS
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FTSE 100: down 0.8% at 5,990.56
FTSE 250: down 0.2% at 16,255.26
AIM ALL-SHARE: up 0.1% at 687.07
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Hang Seng: closed down 0.3% at 19,414.78
Nikkei 225: closed down 0.4% at 16,052.05
DJIA: closed up 1.4% at 16,620.66
S&P 500: closed up 1.5% at 1,945.50
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GBP: down at USD1.4111 (USD1.4142)
EUR: firm at USD1.1040 (USD1.1024)

GOLD: up at USD1,218.91 per ounce (USD1,209.90)
OIL (Brent): soft at USD33.86 a barrel (USD34.18)

(changes since previous London equities close)
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ECONOMICS AND GENERAL
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Tuesday's Key Economic Events still to come
(all times in GMT)

09:00 Germany IFO survey
11:15 Switzerland SNB Chairman Jordan Speech
13:55 US Redbook index
14:00 US S&P/Case-Shiller Home Price Indices
15:00 US Existing Home Sales
15:00 US Consumer Confidence
15:00 US Richmond Fed Manufacturing Index
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Leaving the EU would threaten Britain's security and economy, Prime Minister David Cameron said on Monday, accusing campaigners for Brexit of pushing voters to accept "risk, uncertainty and a leap in the dark." "Leaving Europe would threaten our economic and our national security," Cameron told parliament as he presented his case for Britain staying in the EU ahead of an in-out referendum on June 23. He said cooperation could help Western states to stand up to threats such as Russia and the Islamic State, saying Russian President Vladimir Putin "likes to see disunity in the West." Cameron added: "In my view this is no time to divide the West."
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British manufacturers see improvement in productivity over the next two years but there are concerns about UK manufacturing lagging behind global peers. About 64% of manufacturers reported productivity growth in the last two years and 57% expect further improvements over the next two years, a report from EEF, the manufacturers' organization, and leading technology company, Infor showed Tuesday. Despite outpacing other sectors, 49% of manufacturers agree that UK productivity lags behind competitor nations.
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As Ireland prepares for Friday's general election, weak support for governing Fine Gael and falling support for two of the other largest parties has blown the election wide open, with opinion polls pointing to a hung parliament. A poll conducted for the Irish Times and published on Monday showed support for Fine Gael at 28%, down three points since campaigning began. Labour stands on 6%, down two percentage points.
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The main opposition party in Japan said it will launch a new party through a merger with a smaller opposition group, local media reported. The merger of the Democratic Party of Japan with the Japan Innovation Party is an attempt by a fractious opposition to mount a bigger challenge in upper house elections this summer. The move comes as Prime Minister Shinzo Abe's government has been rocked by a slew of scandals involving members of his cabinet and the ruling Liberal Democratic Party.
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Germany's economic growth remained stable in the fourth quarter, a detailed report from Destatis showed. Gross domestic product grew 0.3% from the third quarter, when it rose at the same pace. The sequential growth rate matched preliminary estimate. On a calendar-adjusted basis, GDP increased 1.3% year-on-year following a 1.7% expansion in the previous quarter. The unadjusted GDP grew 2.1% annually in the fourth quarter, after 1.7% increase in the previous three months. The statistical office confirmed the annual growth figures for the fourth quarter. For the whole year of 2015, GDP climbed 1.7% from last year as estimated.
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The US and Russia have agreed to the terms for a Syrian ceasefire to begin Saturday, the State Department said. The agreement, which does not apply to Islamic State and other UN-designated terrorist groups, would begin at midnight local time Saturday (2200 GMT Friday). The Syrian government and opposition groups must indicate their willingness to abide by the ceasefire agreement by noon Friday. US President Barack Obama and Russian President Vladimir Putin spoke by telephone ahead of the announcement.
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The US will eventually lead oil production gains after the global market rebalances in 2017, the International Energy Agency said in its medium-term outlook. Within the next five years, the IEA said, "the US and Iran are seen leading production gains among non-OPEC and OPEC countries respectively." US production is expected to reach a record high of 14.2 million barrels per day by 2021.
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BROKER RATING CHANGES
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UBS STARTS LONDON STOCK EXCHANGE WITH 'NEUTRAL' - PRICE TARGET 2400 PENCE
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UBS INITIATES ABERDEEN ASSET MANAGEMENT WITH 'SELL' - TARGET 210 PENCE
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UBS INITIATES SCHRODERS WITH 'BUY' - TARGET 2800 PENCE
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UBS INITIATES MAN GROUP WITH 'BUY' - TARGET 180 PENCE
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COMPANIES - FTSE 100
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BHP Billiton slashed its dividend by more than half and adopted a payout ratio on Monday as it posted a swing to a massive loss in the first half of its financial year, in line with the ongoing turmoil hitting the mining sector. The Anglo-Australian miner said it made an earnings before interest and tax loss of USD7.03 billion in the first half to the end of December, compared to USD7.93 billion a year earlier, as revenue dropped 37% to USD15.71 billion. BHP cut its total dividend payout 74% to 16.0 cents per share from 62.0 cents the year prior. BHP has adopted a dividend payout ratio providing for a minimum 50% payout of underlying attributable profit in every reporting period, with any payments to be made above the minimum to be assessed at the close of each reporting period.
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GKN said its pretax profit rose in 2015 and its revenue grew thanks to the acquisition of Fokker Technologies, prompting it to increase its dividend. The engineering group, which makes driveline systems for cars and aerospace parts, said pretax profit for the year to the end of December rose to GBP245.0 million from GBP221.0 million a year earlier. GKN will pay a final dividend of 5.8 pence per share, up from 5.6p a year earlier, meaning its total dividend will rise 4.0% to 8.7p from 8.4p.
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Persimmon said its pretax profit surged in 2015 following a very strong year for the UK housebuilding industry, with revenue up and operating margins improving as it sold more houses at higher prices. The group said its pretax profit for the year to the end of December was GBP637.8 million, up from GBP475.0 million a year earlier, as its total revenue for the year increased to GBP2.9 billion from GBP2.6 billion. Persimmon said it will further accelerated its capital return programme thanks to the strong performance of the business and will now return 110.0 pence per share in cash to shareholders by the start of April, a massive rise on the 10.0p it had been intending to return under its original plans. The total value of its capital return programme has been increased to GBP2.76 billion, up from the GBP1.90 billion it had outlined back in 2012.
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Subprime lender Provident Financial said it has made a "good start" to 2016, with its Vanquis Bank credit cards business and vehicle finance provider Moneybarn trading strongly and "very satisfactory" collections for its home credit business. The update on trading in the first few weeks of the year came as Provident reported that pretax profit grew to GBP273.6 million in 2015, from GBP224.6 million in the prior year. The lender increased its dividend for the year as a whole by almost 23% to 120.1 pence from 98.0p.
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InterContinental Hotels Group said its operating profit rose but revenue dipped in 2015 as it hiked its dividend on its confidence for the coming year and declared a special payout as well. IHG said its operating profit rose to USD680.0 million in the year to the end of December from USD651.0 million a year earlier, despite revenue dipping to USD1.80 billion from USD1.86 billion, due to the sale of two hotels in Paris and Hong Kong. IHG said it will pay a total dividend of 85.0 cents per share, up from 77.0 cents per share a year earlier thanks to the confidence it has on its outlook. This includes a final dividend of 57.50 cents, an 11% year-on-year rise. In addition, the group declared a USD1.5 billion special dividend, which will be paid by means of a share consolidation in the second quarter. The special dividend is worth about USD6.33 per share.
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Home Retail Group late Monday said the deadline by which J Sainsbury must make a firm offer or walk away from the potential deal to acquire the owner of Argos and Homebase has been extended to March 18. The extended deadline for Sainsbury to make an offer coincides with the deadline by which Steinhoff International Holdings has to make a firm offer or walk away from the deal.
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COMPANIES - FTSE 250
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Drax Group said its strong operations mitigated severe market deterioration and difficult regulatory challenges in 2015, but the power generation company still reported large falls in profit and earnings, leading to a large dividend cut. The company said its pretax profit in 2015 plummeted to GBP59.0 million from GBP165.9 million in 2014 despite reporting a 9.3% rise in revenue to GBP3.06 billion from GBP2.80 billion. As a result, Drax slashed its dividend for the year to only 5.7 pence from 11.9 pence - in line with its policy to pay 50% of underlying earnings to shareholders, which dropped to GBP46.0 million in 2015 from GBP96.0 million.
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Aerospace and defence components and sub-systems engineer Meggitt said its pretax profit edged higher in 2015 thanks to growth in revenue and said it is confident on its prospects for 2016 despite experiencing a tough past year. The group, which was demoted from the FTSE 100 to the FTSE 250 in 2015, said its pretax profit for the year to the end of December rose to GBP210.2 million in 2015 from GBP208.9 million in 2014, while revenue rose to GBP1.65 billion from GBP1.55 billion. Still, Meggitt said it is confident on its outlook for the coming year and pushed its final dividend up to 9.80 pence per share, up 3.0% year-on-year, to send its total dividend up 5.0% to 14.40p.
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Ladbrokes reiterated its outlook for 2016 as it reported a swing to a pretax loss in 2015 as a result of heavy exceptional costs and an increase in gambling taxation, though it said it remains focused on reaching or exceeding its financial targets for 2017 and said its merger with Gala Coral Group Ltd remains on track. The company undertook a "short and intense" internal review, and in July set out a three year investment programme to build its UK retail, digital and Australian recreational customer base. However, the company said this plan "came at a cost", as it addressed an urgent need to invest more heavily in its business, which resulted in cutting its dividend to finance its strategy. As a result the company proposed a final dividend of 2 pence, taking its full year dividend to 3 pence, down 66% from 8.9 pence a year before.
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Specialty chemicals company Croda International reported higher pretax profit and revenue for 2015 despite taking a currency translation hit, as it posted underlying growth across the business and said it will pay a special dividend thanks to its strong cash generation. Croda's pretax profit for the year to the end of December was GBP252.3 million, up from GBP229.4 million a year earlier, as revenue rose 2.9% to GBP1.08 billion from GBP1.05 billion. Croda also said it will pay a final dividend of 38.0 pence per share, taking its total dividend for 2015 up to 69.0p from 65.5p. In addition, Croda said it will pay a 100.0p special dividend to shareholders, which will be combined with a share consolidation.
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John Wood Group said it plans to continue growing its dividend despite reporting a large decline in profit in 2015 as the ongoing rout in the oil and gas sector continues. The oilfield services and engineering firm saw its pretax profit from continuing operations in 2015 plummet to USD138.6 million from USD475.1 million as revenue fell to USD5.85 billion from USD7.61 billion. However, John Wood still significantly raised its dividend for the year to 30.3 cents per share - more than 10% above the 27.5 cents paid in 2014. More importantly, the company said there is "no change to our dividend approach" and said it intends to grow the dividend this year by a "double-digit percentage".
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Animal genetics company Genus said its performance in its first half was "overall in line with expectations" for its full year, and proposed a 10% increase for its interim dividend as it reported a fall in pretax profit. Genus reported a pretax profit of GBP12.9 million for its half year to end-December, down from GBP28.6 million a year before, as revenue declined to GBP188.3 million from GBP198.5 million. Genus proposed an interim dividend of 6.7 pence, up from 6.1 pence the previous year.
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COMPANIES - LONDON MAIN MARKET AND AIM
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Kerry Group proposed an increased dividend for 2015 as it saw pretax profit rise, and said it expects to see further earnings growth in 2016. The Irish nutrition and consumer foods group reported a pretax profit of EUR602.8 million, up from EUR555.6 million in 2014, as revenue rose to EUR6.10 billion from EUR5.76 billion a year before. Kerry proposed a final dividend of 35 cents per share, taking its total dividend to 50 cents per share, up 11% from 45 cents the previous year.
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WH Ireland Group said it raised GBP1.1 million in a move to strengthen its balance sheet, as UK regulators fined the company GBP1.2 million over market abuse risks and barred it from taking on new clients in its corporate broking division for 72 days. WH Ireland, a wealth manager and corporate broker, said it placed 1.2 million shares at 90 pence each to raise the funds.
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COMPANIES - INTERNATIONAL
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Foodservice distributor Sysco Corp said Monday it has agreed to acquire UK-based foodservice distributor Brakes Group, owned by private equity firm Bain Capital Private Equity, in a deal valued at about USD3.1 billion. The deal includes the repayment of about USD2.3 billion of Brakes Group's financial debt. Headquartered in London, Brakes Group will operate as a standalone company within Sysco.
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Responding to media reports, United Technologies Corp confirmed it has previously engaged in preliminary, exploratory conversations about a range of potential collaborative options with Honeywell. But United Technologies never explored these options further due to significant regulatory obstacles, customer concerns and valuation issues, it said.
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Microsoft founder Bill Gates has said the US government should be allowed to hack into an Apple iPhone belonging to a gunman who carried out a deadly shooting in California. Gates' view sets him at odds with those of bosses at technology firms Google, WhatsApp and Facebook who have expressed support for Apple's refusal to create a new way - referred to by some as a "back door" - into the iPhone's security system. In an interview with the Financial Times published Tuesday, Gates denied that the request would set a precedent.
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Google is shuttering its US comparison-shopping site for auto insurance, credit cards and mortgages after one year, the Wall Street Journal reported citing people familiar with the matter. The quick reversal is a setback to the Alphabet unit's efforts to use its enormous reach to provide consumers with niche shopping services and financial-services tools. The site, dubbed Google Compare, allowed online shoppers to view multiple offers from auto insurers, mortgage lenders and credit-card issuers after entering personal information.
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Boeing said it has elected Dennis Muilenburg as its next chairman, effective March 1. He succeeds James McNerney Jr, who is stepping down from the board, while Boeing independent Lead Director Kenneth Duberstein continues in that role. Muilenburg, 52, succeeded McNerney as Boeing's 10th chief executive and joined the board last July. At that time, McNerney, 66, continued in the chairman role and announced his intent to retire from the company.
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Tuesday's Scheduled AGMs/EGMs

Thomas Cook Group
Image Scan Holdings
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By Tom Waite; thomaslwaite@alliancenews.com; @thomaslwaite

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