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LONDON (Alliance News) - The following is a summary of top news stories Thursday.
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COMPANIES
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Royal Mail said it is confident it will meet its own full-year expectations, after reporting that group revenue was up just 1% in the nine months to December 28, whilst revenue was flat in both its parcels and letters businesses. The slight overall revenue growth marks a deterioration from the position half way through the mail operator's financial year, when revenue growth had stood at 2%. However, Royal Mail said it was continuing to bear down on costs, and expects underlying operating costs before transformation costs in its main business will be flat for the full year, as it had expected at the half-year stage. It said volumes in its UK parcels business were up 3% on the year for the nine-months, better than the 2% growth it reported at the half year thanks to import parcels, while addressed letter volumes were down 3%, flat on the earlier performance.
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St James's Place reported a 17% rise in funds under management to GBP52 billion in its last financial year, bolstered by strong new business figures and net inflows as it attracted more than 50,000 new clients. In a statement, the wealth management and financial advice group said that new business sales rose by 17% to GBP895.6 on an annual premium equivalent basis in 2014. In addition, third party new business, which arises from advice given on products and services of third party providers, rose to GBP598.1 million from GBP591.1 million.
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Tullow Oil announced a set of mixed results for its Kenyan prospects, with one well plugged and abandoned but seismic surveys showing improved prospects elsewhere. The company said the Epir-1 exploration well, located at Block 10BB in the North Kerio Basin, did not show an oil discovery, but had oil and wet gas shows over a 100 metre interval of non-reservoir quality rocks. Tullow said the results showed a working petroleum system in the basin and said further exploration activities will be considered for the North Kerio basin, but said the well itself would be plugged and abandoned, with the drilling rig to move to the Ekales-2 location in the South Lokichar basin. Elsewhere, Tullow has completed the survey on oil discoveries in the western South Lokichar basin. Tullow said initial evaluation of the 3D seismic data available has show significantly improved structural data and additional prospectivity which had not been available in the 2D seismic data.
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AstraZeneca said the European Medicines Agency has accepted its marketing authorisation application for its gout treatment lesinurad 200 milligram tablets. Lesinurad is used for the chronic treatment of hyperuricaemia in combination with xanthine oxidase inhibitors allopurinol or febuxostat in gout patients when additional therapy is warranted, AstraZeneca said.
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Building materials business Wolseley said it has decided to explore exit options for its remaining building materials business in France, saying it was continuing to apply "disciplined resource allocation principles to all of its businesses".
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US media company Discovery Communications Inc has emerged as a potential challenger to BT Group and Sky for the upcoming Premier League football rights auction, the Financial Times reported. David Zaslav, Discovery's chief executive, travelled to London this week to hold talks with the Premier League, the FT said, citing people familiar with the matter. This year's auction is among the most anticipated ever held, with analysts expecting the value of the rights to increase by around 30% to GBP4 billion for the three years starting with the 2016-17 season.
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Smiths Group said it has signed an agreement with US telecoms group AT&T Inc for expansion of its global communication services infrastructure for the next six years. The agreement is valued at USD100 million would help Smiths Group to securely connect its 23,000 employees across 450 offices in more than 50 countries.
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Balfour Beatty's new chief executive admitted he has a lot of work to do to turn around the business after it cut expected 2014 profits from its UK construction business by a further GBP70 million following a review of the business, whilst raising its own valuation of its public-private partnership portfolio to GBP1.30 billion in the wake of a recent acquisition approach.
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London-focused commercial property company CLS Holdings said it expects to beat the market for the full year. In a short trading statement, FTSE 250-listed CLS said it expects its financial results for the year to December 31 to be materially ahead of current market expectations on the back of a significant rise in the value of its London property portfolio.
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Countrywide said it expects to deliver record results for the year, though it reported a deterioration in market conditions over the course of 2014. Countrywide said it expects its revenue for the year to the end of December to be up 20%, with revenue rising 5% to GBP179.3 million in the fourth quarter.
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Playtech said it continued to trade well in the fourth quarter and expects to meet the market for the year. In a brief trading update, the FTSE 250-listed gaming software company said it expects revenue and adjusted earnings before income, taxation, depreciation and amortisation to be "comfortably" in line with market estimates.
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Oxford Instruments issued a profit warning as its orders were hit by Russian sanctions, it saw weaker trading in its Industrial Analysis business, and recovery it had forecast for the Japanese market has not yet occurred. The technology tools and systems provider now expects to post a pretax profit adjusted for acquisition and related costs of around GBP35 million for the year to end-March, compared to an adjusted pretax profit of GBP47.1 million a year before.
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Paragon Group of Companies reported an 11% rise in first-quarter pretax profit, a performance it said was in line with its expectations, as the lender continues to benefit from strong UK buy-to-let lending. Paragon said that pretax profit, after a debit of about GBP700,000 for fair value hedging items, rose to GBP30.2 million in the final three months of 2014, from GBP27.1 million in the corresponding period last year. The group said its loan portfolios are performing well, generating strong profits and cash flows.
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Card Factory said it is trading in line with its expectations for the year on the back of a rise in revenue in the first eleven months as like-for-like sales rose despite strong comparables. Card Factory said for the 11 months to the end of December, revenue rose 8.1%. Like-for-like sales rose 1.8%, despite a strong comparable for last year when like-for-like sales increased 3.1%.
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Private equity firm KKR said it has bought thetrainline.com from owner Exponent for an undisclosed sum, diverting the online rail ticket platform from its planned a London market listing. Trainline had been set to list on the London Stock Exchange in an initial public offering (IPO) that was set to raise about GBP75 million and value the company at about GBP500 million by market capitalisation. Exponent also is the main selling shareholder of tool and equipment hire business HSS Hire Group, which on Thursday set the expected price range for its London Main Market IPO at between 210 pence to 262 pence per share. At the mid-point of the price range, HSS will have a market capitalisation of about GBP365 million on admission to the main market of the London Stock Exchange.
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MARKETS
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London share prices are mixed, as investors await a long-anticipated move by the European Central Bank to add sovereign bond buying to its arsenal of stimulus measures.
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FTSE 100: up 0.3% at 6,746.07
FTSE 250: up 0.4% at 16,309.67
AIM ALL-SHARE: down 0.1% at 699.29
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The euro is trading higher against the dollar ahead of the ECB monetary policy meeting scheduled for 1330 GMT.
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GBP-USD: up at USD1.5185
EUR-USD: up at USD1.1627
GOLD: down at USD1286.11 per ounce
OIL (Brent): up at USD49.30 a barrel
(changes since end of previous GMT day)
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ECONOMICS AND GENERAL
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UK budget deficit increased in December from last year, the Office for National Statistics said. Public sector net borrowing excluding public sector banks totaled GBP 13.1 billion, an increase of GBP 2.9 billion or 27.8% from last year. The deficit was forecast to fall to GBP 9.7 billion. The increase was predominantly a result of an increase of GBP 2.5 billion in central government net borrowing.
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European Central Bank President Mario Draghi is set Thursday to launch an aggressive government bond-buying programme as part of the bank's efforts to spur economic growth and head off the threat of deflation in the eurozone. With the bank's refinancing rate at a historic low of 0.05%, Draghi has indicated that the bank does not have much more room to try to fire up the struggling 19-member currency bloc's economy though conventional monetary policy action. This leaves an unprecedented quantitative easing programme based on the purchases of government bonds - reportedly about EUR50 billion a month lasting for at least a year - as one of the bank's last options in its battle to haul the eurozone back from a bout of deflation that could derail the region's growth prospects for the coming years.
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The Bank of Japan assessed that the Japanese economy is recovering at a moderate pace, but inflation is likely to slow, the Monthly Report on Recent Economic and Financial Developments revealed. Japan's economy has continued to recover moderately as a trend as the effects of the decline in demand following the sales tax hike have been waning on the whole, it said. The year-on-year rate of increase in consumer prices is in the range of 0.5-1.0%, the bank noted. In the previous report, the bank had said that the growth in consumer prices was around 1%.
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The top US and EU diplomats vowed in Washington to support a unified sanctions regime against Russia and insisted Moscow abide by the Minsk ceasefire in eastern Ukraine. US Secretary of State John Kerry and the EU's new foreign policy chief, Federica Mogherini, spoke at a joint press conference in the Treaty Room at the State Department. Mogherini said the trip to Washington, her first trip in office outside the EU, was a sign of the significance of the close EU-US relationship.
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The speaker of the US House of Representatives, John Boehner, said he has invited Israeli Prime Minister Benjamin Netanyahu to speak next month to Congress. Boehner invited Netanyahu to speak on February 11 on the threats that radical Islam and Iran pose to Israeli and US security. The White House called Boehner's invitation a breach of normal diplomatic protocol.
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By Arvind Bhunjun; arvindbhunjun@alliancenews.com; @ArvindBhunjun
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