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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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Chip maker CSR said it had rejected a takeover approach from US-based semiconductor manufacturer Microchip Technology Inc because the proposed price was too low, but it is considering its options for the company. Under UK takeover rules, Microchip Technology now has until September 25 to make a firm offer for CSR or walk away. The confirmation of an approach comes after the Financial Times cited people familiar with the matter saying CSR had received takeover offers from various rival semiconductor manufacturers, and it could be sold for as much as USD3 billion from a sale.
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Xaar lost a quarter of its value after it lowered its revenue expectations for the full year due to softening demand in the Chinese ceramic tile decoration market, and it posted a lower pretax profit for the first half of the year. Demand for ceramic tile decoration has weakened in the third quarter due to slowing construction activity in China, and the the company lowered its full-year revenue expectations to GBP115 million to GBP125 million, from a forecast of about GBP130 million it gave in July. Still, it raised its interim dividend to 3.0 pence, from 2.5 pence, and said it expects to pay a total dividend of 9 pence for 2014, which would be a 12.5% increase over 2013. Xaar posted a pretax profit of GBP15.3 million for the six months to June 30, down from GBP23.4 million a year earlier, as revenue declined to GBP60.4 million, from GBP70.2 million.
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A consortium led by Royal Dutch Shell is close to selling several Nigerian oilfields for about USD5 billion to domestic buyers, as foreign companies retreat from sub-Saharan Africa’s oldest oil industry, the Financial Times reports, citing people familiar with the situation. The price tag for the four oilfields and a key pipeline co-owned by Shell, France’s Total and Eni of Italy has doubled since initial estimates towards the end of last year, and could come to USD5.2 billion, the newspaper said, although it cited the people familiar with the deal cautioning that the figure could still change as final details are negotiated. A deal is expected in the next few weeks, but then all potential buyers will require government approval, the FT added.
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BP's largest US refinery at Whiting, Indiana is continuing to operate after a blaze Wednesday evening that has now been extinguished, Reuters reports, citing the company. BP said operations at the 413,500 barrel per day Whiting refinery were minimally impacted as a result of the incident and the refinery continues to produce products for customers, Reuters reported.
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Tullow Oil said exploration and appraisal drilling on two blocks onshore in Kenya had extended the potential size of the areas and reinforced its belief that the basin in which the blocks sit holds "very considerable" potential. The company said the Etom-1 exploration well it drilled in Block 13T was the most northerly drilled so far, and extended the proven oil basin significantly northwards after it hit about 10 metres of net oil pay.
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SOCO International said trading in its first-half was in line with its expectations, despite reporting pretax profit and revenue falls, as it reiterated its production guidance for the full-year and announced a GBP73 million cash return to shareholders. The oil and gas exploration and production company said pretax profit declined to USD174.7 million in its first-half, down from USD228.7 million last year. In its results for the six months to June 30, SOCO said revenue also fell, coming in at USD246.4 million from the USD324.0 million recorded last year. SOCO proposed a 22 pence per share cash return to shareholders, structured as a B and C share issuance.
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Ophir Energy said that it has appointed Bill Higgs as its chief operating officer, as its CFO and strategy director step down amid a company-wide restructuring and streamlining programme designed to reduce costs and adjust to the "future needs" of the business. The upstream oil and gas exploration company said Higgs will join the company on September 10, reporting to CEO Nick Cooper and will join the board as an executive director and board member. Higgs was most recently CEO at Mediterranean Oil & Gas PLC which was recently acquired by Rockhopper Exploration PLC. Before this he held a number of roles at Chevron Corp.
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DCC saw its shares rise after it said it will buy Esso's unmanned and motorway retail petrol station network in France for GBP84 million in cash plus all the stock in the petrol tanks, its second deal in this sector this year as it continues to expand in transport fuels. The support services company bought the Qstar chain of unmanned retail petrol stations in Sweden in May. In a statement, DCC said the latest deal includes 274 Esso Express unmanned petrol stations, 48 Esso branded motorway concessions, and contracts to supply about 75 dealer-owned-dealer-operated sites. DCC Energy will enter into a long term branded supply agreement with Esso Société Anonyme Française.
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Stock Spirits Group declared its maiden interim dividend and said that it remains on track to deliver on its full-year targets as it swung to a pretax profit in its first-half, despite revenue taking a hit on the impact of a sales duty hike in Poland and the devaluation of the Czech koruna. In its half-year results for the six months to June 30, 2014 the Central and Eastern European branded spirits producer said it swung to a pretax profit of EUR19.5 million from a EUR9.3 million loss last year. Revenue came in 10% lower for the half-year at EUR137.7 million, compared to EUR153.1 million in the comparable period last year. The FTSE 250-listed said the drop reflects the impact of the Polish duty sales re-phasing and adverse foreign exchange movements in the Czech Republic.
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Engineering investment group Melrose Industries reported an increase in profit for the first half, despite a mixed performance across the business. Melrose, which specialises in buying underperforming engineering companies and turning them around, posted pretax profit of GBP69.6 million for the six months ended June 30, up from GBP64.1 million a year earlier, even though revenue fell to GBP780.9 million from GBP875.3 million. On the back of its performance the company increased its interim dividend to 2.8 pence from 2.75 pence a year earlier.
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Hays, the recruitment company, reported 12% growth in full year operating profit, and said it is ahead of schedule as it looks to broadly double operating profit by 2018. In a statement, Hays said operating profit increased to GBP140.3 million in the year ended June 30, compared with GBP125.5 million last year. Net fees crept up to GBP724.9 million from GBP719.0 million, as increases in Continental Europe & Rest of World and the UK & Ireland more than offset a fall in Asia Pacific. However, revenue itself fell to GBP3.68 billion from GBP3.70 billion. Pretax profit increased to GBP132.3 million pretax profit from GBP118.5 million. Hays increased its full year dividend per share to 2.63 pence from 2.50p.
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Healthcare company BTG said Chinese regulators have approved the registration of the DC Bead liver cancer treatment it will distribute through Chinese partner SciClone Pharmaceuticals Inc. In a statement, the companies said the China Food and Drug Administration has approved the registration of DC Bead for the embolisation of malignant hypervascularised tumours.
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Hunting said that stronger trading in its second quarter boosted its first half and that activity returned to management-anticipated levels with pretax profit and revenue up after adverse weather hit its first quarter. The company also upped its interim dividend. In its half-year results for the six months to June 30, 2014, the international energy services group said pretax profit rose 15% to USD69.1 million from the USD60.0 million reported last year. Revenue was also higher, up 4.8% to USD687.5 million from USD655.7 million in the comparable period.
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IP Group reported an increase in the fair value of its investment portfolio over the course of the first half of the year, amid a flurry of activity. In a statement, IP Group said the fair value of its investment portfolio at the end of June was GBP319.6 million, up 12% from GBP285.9 million at the end of 2013. The value of its 10 largest holdings increased to GBP233.9 million from GBP225.2 million over that period. Net assets increased to GBP528.6 million from GBP336.6 million over the same period. The group had a busy first six months of the year, acquiring the remaining 79.9% of Fusion IP PLC it didn't already own, extending an intellectual property commercialisation agreement with The University of Manchester to 2019, and signing a new collaboration agreement with Princeton University.
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Shares in Online gaming software supplier Playtech were higher as it expressed confidence in beating market expectations for the full year and raised its interim dividend as adjusted profit rose in the first half. The online gaming software supplier proposed an interim dividend of 8.9 euro cents, up 14.1% from 7.8 euro cents the year before. Playtech posted a pretax profit of EUR76.9 million in the half year to end-June, down from a pretax profit of EUR414.8 million a year earlier when it booked a gain on the sale of its 29% share in William Hill Online to William Hill PLC.
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MARKETS
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UK stocks have declined as the boost provided by the dovish comments from European Central Bank President Mario Draghi at the end of last week wear off.
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FTSE 100: down 0.4% at 6,805.63
FTSE 250: down 0.8% at 15,898.71
AIM ALL-SHARE: down 0.04% at 778.64
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The euro has fallen against the dollar after economic sentiment in the eurozone dropped and the German unemployment rate remained unchanged in August.
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GBP-USD: up at USD1.6581
EUR-USD: down at USD1.3186
GOLD: up at USD1291.27 per ounce
OIL (Brent): up at USD102.71 a barrel
(changes since end of previous GMT day)
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ECONOMICS AND GENERAL
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Ukrainian President Petro Poroshenko accused Russia of a military invasion and cancelled an official visit to Turkey over "the sharp aggravation of the situation in Donetsk." Ukraine has called an urgent meeting of the UN Security Council. "The world must provide an assessment of the sharp aggravation of the situation in Ukraine," the president said. Poroshenko had been due to attend the inauguration ceremony for new Turkish President Recep Tayyip Erdogan. Pro-Russian separatists were advancing towards the southern town of Mariupol and their tanks had reached the south-eastern city of Novoazovsk, more than 100 kilometres south of Donetsk, near the Russian border, where the government in Kiev said they were opening a "second front" in the conflict.
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Economic sentiment in the eurozone dropped in August, according to data released, falling to its lowest level this year amid global tensions triggered by the crises in Ukraine and Iraq. The Economic Sentiment Indicator for the 18-member currency zone fell to 100.6 points this month from 102.1 points in July, the European Commission said. Analysts had expected a more moderate August decline, to 101.5, from the commission's previously estimated July reading of 102.2 points. Among the largest eurozone economies, the sharpest falls in confidence were seen in Italy and in Germany, the EU's executive said.
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Germany's unemployment increased unexpectedly in August, official data revealed. The number of people out of work increased by a seasonally adjusted 2,000 to 2.901 million in August, the Federal Labor Agency said. Economists had expected a decline of 5,000 after decreasing 12,000 in July. The seasonally adjusted jobless rate remained unchanged at 6.7% in August, in line with expectations.
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French unemployment reached a new record in July as the economy stagnated again in the second quarter. Registered unemployment increased by 0.8% to a record 3.424 million in July, the labor ministry reported late Wednesday. From a year earlier, unemployment rose by 4.3%. The stalled economy and high unemployment made it difficult for the French President Francois Hollande to convince his own allies about reforms on cards.
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Islamic State militants have torched an oilfield in northern Iraq in a bid to block advancing Kurdish forces, the Kurdish military says. The field is located in the militant-held area of Zumar, which the Kurdish Peshmerga troops are preparing to wrest back from the jihadists, the military told dpa.
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Kurdish Peshmerga forces took control of seven villages from the Islamic State in northern Iraq in a major offensive against the radical group, the Iraqi government-run TV al-Iraqiya reported. The villages are located near the strategic Mosul Dam, which the Peshmerga had recaptured from the extremists in mid-August. The dam, Iraq's largest, is located on the Tigris River, which flows through the capital Baghdad. After having suffered setbacks by the Islamic State early this month, the Peshmerga, backed by US airstrikes, have been able to retake several areas from the al-Qaeda splinter group in the past two weeks.
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EU leaders will have a second attempt on Saturday at filling the bloc's top jobs for the next five years, but they are faced with a politically complex puzzle that is further bogged down by a dearth of female candidates. The leadership change follows European elections in May. Successors are most urgently needed for EU foreign policy chief Catherine Ashton, whose term ends on October 31, and for EU President Herman Van Rompuy.
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The Ebola death toll in West Africa has risen to 1,552 as the outbreak continues to accelerate, the World Health Organization said. The Geneva-based organization said 3,069 suspected or confirmed cases had been reported in Guinea, Liberia, Nigeria and Sierra Leone. More than 40% of all cases occurred within the past three weeks, pointing to an acceleration of the infection rates in the region, WHO said.
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By Arvind Bhunjun; arvindbhunjun@alliancenews.com; @ArvindBhunjun
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