BAGR.L Share News (BAGR)

LONDON (Alliance News) - Royal Mail is the second biggest faller on the FTSE 100 Tuesday after the company reported a rise in revenue but warned that it continues to face increased competition in the parcels market.

Royal Mail said group revenue in its first quarter rose 2%, with the low single-digit growth cited as being in line with its strategy. Its Letters business fared well, with revenue 3% higher. A 3% decline in addressed letter volumes was better than the expected reduction of 4-6% per year, it said.

UK parcel revenue declined by 1% in the quarter even as volumes grew by 1%.  Royal Mail said revenue growth declined by around 150 basis points as export parcel volumes came in lower than expected, hit by the impact of stronger sterling and increasing competition. It said this decline in revenue is not expected to reverse in the full year.

Royal Mail has launched a number of initiatives to mitigate these issues, including opening the network longer on Saturdays and on Sundays to receive goods from e-retailers. Parcelforce Worldwide has commenced a Sunday delivery service for online shoppers, and it has also introduced new shipping tools for large online retailers. Royal Mail said that it expects to see the benefits of these initiatives in the second half of the year.

"Through cost-control measures and with continued good letters performance, we expect to be able to offset the impact on profit such that our overall performance would remain in line with our expectations for the full year," said Chief Executive Officer Moya Greene.

Royal Mail shares are down 2.0% at 456.52 pence per share at midday.

Faring worse than Royal Mail is Tesco, which is topping the FTSE 100 loser table as the retailer reverses the gains made on Monday after it revealed that Chief Executive Officer Philip Clarke will step down on October 1 to be replaced by Dave Lewis, who is currently president of Unilever's Personal Care unit. The change in sentiment comes after a raft of negative price target revisions from Exane BNP Paribas, Macquarie, Deutsche Bank and Barclays. Tesco trades 3.9% lower.

Meanwhile, ARM Holdings leads FTSE 100 gainers, up 4.7%, after providing a bullish earnings update.
---------
MARKETS: UK stocks are trading higher as investors tentatively move back into riskier assets, betting that the geopolitical issues which have weighed on sentiment in recent sessions won't derail the global economic recovery.

FTSE 100: up 0.7% at 6,777.77
FTSE 250: up 0.7% at 15,587.77
AIM ALL-SHARE: up 0.1% at 770.19
GBP-USD: flat at 1.7070
EUR-USD: down at 1.3482
GOLD: down at USD1,306.25 an ounce
OIL (Brent): up at USD108.26 a barrel
---------
Other Top UK Corporate News
----------
ARM Holdings raised its interim dividend as it saw pretax profit rise in the half-year to the end ofJune, driven by a strong performance from its licensing operations which offset weaker royalty revenues. The chipmaker proposed an interim dividend of 2.25 pence, up from 2.1 pence in the previous year. The company said it enters the second-half of the year with a healthy pipeline of opportunities, and expects to see its royalty revenue grow in the second-half as the semiconductor industry improves. As a result of this improvement, it expects to meet market expectations for US dollar revenues for the full-year.
----------
Anglo American subsidiary Kumba Iron Ore Ltd said it will provide the parent company with a lower contribution to underlying earnings, due to lower iron ore prices and higher costs. The announcement comes ahead of Anglo American's half-year results release on Friday. The major iron ore mining subsidiary, which operates in South Africa, will contribute USD409 million to Anglo American for the six months ended June 30, a fall of 29% from USD579 million the previous year. The subsidiary said its IFRS headline earnings fell 28% to USD606 million from USD840 million as operating profit fell 14% due to lower export iron ore prices and costs from increased mining activities.
----------
AstraZeneca said its research and development arm MedImmune has teamed up with US biotechnology company Advaxis Inc for a clinical trial combining MedImmune's MED14736 compound with Advaxis' ADSX-HPV. The two treatments are both immunotherapies, which use the body's immune system to treat cancer, the company said.
----------
Britain's largest high-street banks will next week say they are setting aside further provisions in relation to the payment protection insurance mis-selling scandal, Sky News reported citing insiders who said that the new top-ups could reach close to GBP1.5 billion between them. According to the report, Barclays PLC, Lloyds Banking Group PLC and Royal Bank of Scotland Group PLC will use their first-half results to disclose the new provisions. According to Sky News the new provisions "are understood to be being driven by an acceleration in the number of claims which relate to PPI policies sold before 2005."
----------
Trading in Barclays' dark pool has seen a dramatic fall since the New York State Attorney General's allegations that the bank gave an unfair advantage to high-frequency traders at the expense of its other investor clients, despite presenting the trading platform as having special safeguards to protect against "predatory" or "toxic" traders. According to data published by the US's Financial Industry Regulatory Authority, the number of shares traded in Barclays' dark pool, LX Liquidity Cross, fell by two-thirds in the week of June 30, from the week of June 23. The number of shares traded in the pool fell to 66.4 million from 197.0 million. The data is for NMS Tier 1 equities. Data for NMS Tier 2 and over-the-counter equities is not as recent as for NMS Tier 1.
----------
Reed Elsevier said its LexisNexis Legal & Professional subsidiary will buy Wolters Kluwer's Canadian legal publishing activities. The acquisition will extend the LexisNexis portfolio of next-generation products and solutions for customers within the Canadian market, Reed Elsevier said in a statement. The Canadian legal assets to be sold include print and online information products for law firms, corporate counsel, and human resources professionals. "The agreement with Wolters Kluwer will allow us to better serve customers in Canada and supports our strategy to build leading positions in our core markets," said Mike Walsh, CEO of LexisNexis Legal & Professional.
----------
Croda International said its pretax profit fell in its first-half and it again warned of lower pretax profit for the full-year as reduced demand in Europe and currency translation losses hit the company. The speciality chemicals company said its pretax profit fell 6.0% to GBP125.1 million for the six months ended June 30 from GBP133.1 million in the previous year, as sales fell 4.5% to GBP537.4 million from GBP562.7 million. The company said its results were also hit significantly by currency translation, which reduced sales by GBP38.3 million and operating profit by GBP11.4 million as the sterling and euro showed relative strength versus other currencies.
----------
QinetiQ Group said it retains its outlook for the full-year as its Europe, Middle East and Asia Services division performed in line with expectations during the first quarter, benefitting from continuing productivity improvements. In an interim management statement released ahead of its annual general meeting Tuesday, the defence company said however that its Global Products division has been impacted by the draw-down of overseas military forces, due to the fact that it has shorter order cycles than the EMEA Services business. The EMEA Services business has benefited from continuing productivity improvements and better project execution embedded during QinetiQ's self-help phase eighteen months ago, the company said.
----------
IG Group Holdings reported a 1.3% increase in pretax profit in its last financial year, boosted by stronger revenue figures in the UK and Ireland, as well as in the rest of Europe. The FTSE 250 online trading company also increased its full-year dividend by 21% to 28.15 pence, from 23.25 a year earlier, representing approximately 70% of the group's full-year earnings. IG Group said it will continue to monitor its capital structure closely as it looks to fund its growth and to adapt and respond to any changes in regulation or the financial environment. In a statement, IG Group said that it made a GBP194.7 million pretax profit in the year ended May 31, compared with GBP192.2 million a year earlier. Revenue increased to GBP413.7 million, from GBP406.4 million, due to increases in the UK and Europe more than offsetting falls in Australia and the rest of the world.
----------
AIM MOVERS
----------
Kea Petroleum shares have jumped after the company said that drilling has started at its Puka-3 well on the PEP51153 licence, located onshore in Taranaki in New Zealand. Also trading higher is Black Mountain Resources; the company said that high-grade silver results have been returned from its channel sampling at the New Departure silver mine in Montana. Frontier Resources trades higher after the company said that interpretation of data on its Namibian blocks has shown several deep-seated basement structures which will serve as a guide for the company's continuing exploration programme. Max Property Groupmn shares are up; the company has proposed the sale of its entire property business to Marina Topco (Jersey) Ltd, a company controlled by Blackstone Real Estate Partners Europe IV and its affiliates, in a deal valuing the group at GBP447.7 million. At the other end of the market, Bagir Group shares have dropped as the company expects full-year earnings to be at the lower end of guidance given in May. IQE also trades lower; the company has warned it expects its revenue for the half year to end-June to be 17% behind the previous year.
----------
Top Economics And General
----------
The UK budget deficit excluding financial interventions increased in June, data from the Office for National Statistics showed. Public sector net borrowing excluding financial interventions totalled GBP11.4 billion, which was GBP3.8 billion more than last June. It was forecast to rise to GBP10.5 billion in June. Excluding transfers to Asset Purchase Facility Fund, net borrowing was GBP11.5 billion. For the financial year 2013/14, PSNB excluding interventions was GBP93.7 billion. This was GBP13.0 billion higher than the same period in 2012/13. At the end of June, public sector net debt was equivalent to 77.3% of gross domestic product.
----------
Pro-Russian rebels delivered the flight data and voice recorders of a downed passenger plane to Malaysian officials Tuesday, a government source said. The instruments were handed over in Donetsk, Ukraine to a group of Malaysian officials led by National Security Council member Colonel Mohamed Shukri. The source said the equipment appeared to be in good condition. "Malaysia will keep it for safekeeping temporarily and will eventually hand it to the proper investigating body," he said. Malaysia Airlines flight MH17 crashed Thursday, killing all 298 people aboard, in eastern Ukraine. It was suspected to have been shot down by a missile.
----------
Dozens more people have been killed in fighting between the Israeli army and Islamist militants in the Gaza Strip, officials said. The number of Palestinians to have died rose by at least 30 since late Monday, bringing the total to 585, Gaza Health Ministry spokesman Ashraf al-Qedra said. Two Israeli soldiers were killed in Gaza, the Israeli military said early Tuesday. Their deaths Monday brought the total number of Israeli military personnel who have died in the operation to 27.
----------
The International Monetary Fund lifted its outlook for German economy and urged authorities to boost public investment on infrastructure, while adhering to the European fiscal rules. The Washington-based lender forecast the largest Eurozone economy to grow 1.9% this year, up from the prior estimate of 1.7%. The outlook for next year was revised to 1.7% from 1.6%.
----------
A leading indicator of economic activity in China rose at an accelerated pace in June, the results of a survey by the Conference Board showed. The Conference Board's leading economic indicators index for China increased 1.3% month-on-month in June followed by the 0.7% rise in May.
----------
Afternoon Watchlist (all times British Summer Time)

All Day G20 Meeting
13:30 US Consumer Price Index
13:55 US Redbook index
14:00 US Housing Price Index
15:00 US Existing Home Sales
15:00 US Richmond Fed Manufacturing Index
16:30 US 4-Week and 52-Week Bill Auction
---------
Wednesday's Key UK Corporate Events

Morgan Advanced Materials Half Year Results
Brewin Dolphin Interim Management Statement
Renishaw Full Year Results
Johnson Matthey Interim Management Statement
BHP Billiton June Quarter Operational Review
Intermediate Capital Group Interim Management Statement
Provident Financial Half Year Results
Sage Group Interim Management Statement
Carphone Warehouse Group Interim Management Statement
Energy Assets Group Interim Management Statement
GlaxoSmithKline Interim Management Statement
Norcros Interim Management Statement
PayPoint Interim Management Statement
TalkTalk Telecom Group Interim Management Statement
Staffline Group Half Year Results
Capita Half Year Results
---------
Wednesday's Key Economic Events (all times British Summer Time)

07:45 France Business Climate
09:30 UK Bank of England Minutes
09:30 UK BBA Mortgage Approvals
11:00 UK CBI Distributive Trades Survey
12:00 US MBA Mortgage Applications
12:45 UK BOE's Governor Carney speech
15:00 EU Consumer Confidence Preliminary
15:30 US EIA Crude Oil Stocks
---------
Contact: +44 203 668 7440; newsroom@alliancenews.com; @AllNewsTeam

Copyright 2014 Alliance News Limited. All Rights Reserved.