BT Share News (BT.A)

LONDON (Alliance News) - Wm Morrison Supermarkets is the worst-performing stock in the FTSE 100 midday Thursday, after the grocer reported a 2.9% slide in its key sales measure in the first quarter of the financial year, signalling the size of the task that its new chief executive has on his hands as he tries to turn the company around and attract back the customers that have headed elsewhere.

The grocer said total sales including in the 13 weeks to May 3 were down 5.1% on the same period a year earlier, while like-for-like sales including fuel were down 6.6%. Its closely watched like-for-like sales excluding fuel fell 2.9%, which was worse than the 2.6% decline it had reported in the previous quarter albeit a marked improvement on the 7.1% decline it reported a year earlier.

New Chief Executive David Potts reiterated that a full assessment of the business is underway and it will give a detailed update on this in September. In the meantime its focus is to "invest more for customers in order to build trading momentum.

"This is a business with many attributes, some unique. Our task is to use those advantages to improve the shopping trip for customers and create value," Potts said.

The company, which cut 50,000 square feet of selling space in the first quarter of the financial year and started simplifying its head office, said it expects its underlying pretax profit will be higher in the second half of the year than the first. It expects to book restructuring costs of between GBP30 million and GBP40 million during the year as a whole.

Analysts welcomed a reduction in net debt of about GBP150 million to GBP2.2 billion, but Brewin Dolphin said it thinks any attempt to turn the business around will require significant investments and will face risks as it's implemented.

Shore Capital analyst Clive Black was more positive after the like-for-like sales decline excluding fuel wasn't as bad as he'd feared.

"It is clearly still very early days in Mr. Potts' tenure but we sense he is bringing a deep rooted and fundamental change to Morrison's that is for the better. We make this assertion not because Dalton Philips was ineffectual but because in this market the business needs an experienced leader. In this respect we demonstrably believe that Mr. Potts has hit the ground running," Black said.

BT Group posted results that met analysts' expectations for its recently ended financial year, and said it expects to achieve "modest" growth in earnings for the current year, despite some additional costs from the launch of its UEFA Champions League and UEFA Europa League content.

BT reported pretax profit of GBP2.65 billion for the year to the end of March, up from GBP2.31 billion a year before, as a decline in revenue to GBP17.98 billion from GBP18.29 billion was offset by a reduction in operating costs of 7%.

The company proposed a final dividend of 8.5 pence, giving it a total dividend for the year of 12.4p, up 14% from 10.9 pence the year before.

BT hasn't included its recent deal to buy mobile network EE in its forecasts, as it awaits regulatory clearance. Chief Executive Officer Gavin Patterson told journalists that the company believes the case it is making to the UK Competition and Markets Authority is "very strong".

"We don't break the threshold of 40% in any of the key markets," Patterson said, which he believes eliminates the issue of market concentration. On the suggestion that the combination could lead the company to exceed the 40% threshold in terms of spectrum coverage, Patterson highlighted Ofcom's decision to increase this threshold next year, which means it will be "comfortably" under the threshold.

If the acquisition goes to a phase I clearance investigation, it should complete before September, and if it goes to a phase II investigation, it should complete by next March, Patterson said.

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Markets: UK stocks are lower in a busy day for corporate news, as the uncertainty of the UK General Election's outcome reduces the risk appetite amongst investors. With UK voting underway, analysts say volatility is starting to hit the pound, which touched an intraday low of USD1.5162 against the dollar.

US stock futures point to a lower open on Wall Street, with the DJIA, S&P 500 and Nasdaq 100 set to open down 0.5%.

FTSE 100: down 1.1% at 6,854.42
FTSE 250: down 0.6% at 17,313.92
AIM ALL-SHARE: down 0.4% at 748.35
GBP: down at USD1.5214
EUR: down at USD1.1324
GOLD: down at USD1,183.35 an ounce
OIL (Brent): up at USD68.09 a barrel
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Other Top Corporate News
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BAE Systems said its outlook remains unchanged and trading so far in 2015 has been in line with management expectations. In a statement ahead of its annual general meeting, the defence contractor reiterated that it expects its underlying earnings per share to be marginally higher in 2015 than 2014, "including some reliance on anticipated naval and aircraft orders".
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Aviva reported higher levels of new business, bolstered by operations in the UK & Ireland, Europe and Asia. The group said its integration of Friends Life is ahead of schedule, following the GBP5.6 billion acquisition of its former rival. In a statement, the life insurer and FTSE 100 constituent said value of new business increased to GBP247 million in the three months ended March 31, compared with GBP224 million in the corresponding quarter of the prior year.
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RSA Insurance Group cautioned that lower interest rates and currency moves in its vital areas of business are having an unwelcome effect on business, but the insurer said its net profit in the first quarter of 2015 was "a little ahead" of plans and included gains it is expecting to make on asset sales. In a statement, RSA said net written premiums decreased to GBP1.59 billion in the three months ended March 31, compared with GBP1.73 billion in the corresponding period of the prior year. Excluding the group's new reinsurance coverage programme, discontinued and non-core operations, core group net written premium fell to GBP1.58 billion from GBP1.62 billion.
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Randgold Resources reported a steep drop in profit for the first quarter of 2015, as cost cutting only partially offset an impact from the fall in the gold price and the rise in the dollar against currencies including the euro, South African rand and Canadian dollar. The gold producer reported a net profit of USD48.2 million for the three months to end-March, down from USD74.3 million a year earlier. Gold sales declined to USD344.6 million from USD362.9 million, as the average gold price it received dropped to USD1,215 an ounce from USD1,296 an ounce.
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Low-cost airline easyJet joined the African airline backed by its founder, fastjet, in reporting another increase in passenger numbers in April, while traffic at Irish airline Aer Lingus fell in the month as a drop in its short-haul operations more than offset growth in long-haul. EasyJet said it flew 6.0 million passengers in April, up from 5.8 million a year earlier, while its load factor, a measure of how many paid seats are filled on its planes, rose to 90.8% from 89.8%.
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Four big banks are expected to plead guilty to rigging foreign-currency exchange rates and pay billions in combined penalties as part of settlement agreements expected to be announced as early as next week, the Wall Street Journal reported citing people familiar with the matter. The report indicated that US prosecutors are preparing to announce separate settlements simultaneously with Citigroup, Barclays, JPMorgan Chase and The Royal Bank of Scotland Group. The banks are expected to plead guilty to criminal antitrust charges for alleged collusion by traders in foreign-currency markets. UBS also is expected to reach a settlement but will receive immunity from prosecution.
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Shares in TeleCity Group soared after it received a GBP2.32 billion takeover approach from American data-centre provider Equinix, a few months after agreeing an all-share deal to acquire data-centre services provider Interxion Holding. TeleCity also reiterated its guidance for 2015, despite a slight decline in revenue due to the strength of sterling in the first quarter of 2015. Equinix has approached with a potential offer of 1,145 pence per share, payable in a mixture of cash and stock in Equinix. Around 54% of the consideration would be payable in cash, and 46% in Equinix stock. TeleCity shares are trading up 18% at 1,065.00 pence Thursday morning.
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esure Group said it increased motor gross written premiums in the first quarter of 2015 and made some progress on its pricing. esure said total gross written premiums increased to GBP130.7 million in the three months ended March 31, compared with GBP123.5 million in the corresponding quarter of the prior year. In-force policies increased to 1.971 million from 1.962 million at the same stage of the prior year. Additional services revenue was down 1.2% to GBP23.4 million.
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Millennium & Copthorne Hotels reported lower profit in its first quarter, despite a rise in revenue and in revenue per available room, as profit was hit by labour cost pressures and a tough comparative in 2014. The hotels operator said pretax profit in the three months to March 31 declined to GBP19 million from GBP20 million the year before. This was despite an increase in revenue to GBP189 million from GBP175 million and a rise in revenue per available room to GBP61.60 from GBP58.23.
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Engineering company IMI said its market conditions remained challenging in the first quarter of 2015 and said its revenue dropped on the back of foreign exchange movements and contract delays. IMI said its revenue in the first quarter to the end of March was down 4% year-on-year, reflecting the ongoing damage to its results from the strength of sterling, though this was partially offset by an initial contribution from German power valve company Bopp & Reuther, which it acquired in 2014.
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Asia Coal Energy Ventures, the vehicle backed by hedge fund Argyle Street Management Ltd and Indonesia-based Sinarmas Group, finally confirmed a GBP98.8 million takeover offer for Asia Resource Minerals, and it also secured a deal with Austria's Raiffeisen Bank that puts it in a strong position as it battles for control of the company with founder Nat Rothschild. Asia Coal Energy said it is offering 41.0 pence a share for the shares in Asia Resource Minerals it doesn't currently own, a 173.3% premium to the closing price on April 13, the day before it said it would make a bid, and a 198.0% premium to the 30-day volume weighted average price leading up to that date.
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AIM Movers
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Sareum Holdings shares are up by a fifth after it said its equity swap deal with YA Global Master SPV Ltd has concluded ahead of schedule. Stellar Diamonds is doing well after it said it will hold its next diamond sale of up to 4,439 carats from trial mining at the Baoulé kimberlite project in Guinea in Dubai and Antwerp via the eDiamond auction platform this month. Tiziana Life Sciences is up after it licensed from Cardiff University scientists a new anti-cancer stem cell agent capable of targeting aggressive tumours forming from cells originating in the breast, pancreas, colon and prostate. ValiRx is another gainer after it signed a contract with bioanalytical chemistry and research company Admescope Ltd giving Admescope access to the TRAC Finnish gene expression and biomarker technology. African Copper shares have plummeted after it said it will seek approval from shareholders to cancel its trading on AIM and in Botswana at a general meeting to be held towards the end of May due to the company's small size and lack of liquidity, a proposition that has already gained support from the company's largest shareholders. MXC Capital is down after it raised GBP11.7 million after expenses in a placing of 480.0 million new shares priced at 2.5 pence each.
Red Rock Resources is also down as it moved to protect its interests in Kenya after the country's Ministry of Mining told the company's local partner that it had terminated two special licenses, although it warned that it may have to book a further writedown on its Kenyan assets if it doesn't get a positive result quickly. Asian Citrus Holdings is another faller after it warned it expects the 2015 winter harvest from its Xinfeng Plantation to be significantly reduced compared with the previous year, which in turn will have a knock-on effect for its results in the year to end-June 2016, as it tackles Huanglongbing disease amongst its orange trees.
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Top Economics And General
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New car registrations in the UK increased for the thirty-eighth consecutive month in April, figures from the Society of Motor Manufacturers and Traders showed. Total new car registrations rose 5.1% year-over-year in April to 185,778 units, marking the strongest April result in ten years. In the same month of the previous year, it was 176,820 units. Ford Fiesta topped the best sellers list in April with 10,294 units. This was followed by Focus with the sale of 6,437 units
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German factory orders recovered in March after falling for two straight months, data from Destatis showed. Factory orders grew 0.9% month-on-month in March, offsetting February's 0.9% fall. Domestic orders increased 4.3%, while foreign orders declined 1.6%.
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French industrial production dropped unexpectedly in March, figures from the statistical office Insee showed. Industrial production dropped 0.3% month-on-month in March, defying economists' expectations for a 0.1% slight increase. In February, production had risen a revised 0.5%.
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Although growth in Asia Pacific is set to continue on domestic demand, the International Monetary Fund said a slower-than-expected growth in China and stronger dollar pose risks to the outlook. Growth in the Asia and Pacific region is forecast to remain at 5.6% this year before easing slightly to 5.5% in 2016, the IMF said in the Regional Economic Outlook: Asia and Pacific.
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Six weeks after his conservative Likud party won parliamentary elections, Israeli Prime Minister Benjamin Netanyahu late Wednesday - in the 11th hour - finalized a right-wing, religious coalition with a majority of just one seat. The coalition of the Likud, the centre-right Kulanu party of Finance Minister-designate Moshe Kahlon, two ultra-Orthodox parties, and - finally - the pro-settler Jewish Home party has 61 seats in Israel's 120-seat parliament.
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Afternoon Watchlist (all times in BST)

All Day UK Parliamentary Election
12:30 US Challenger Job Cuts
13:30 US Jobless Claims
15:30 US EIA Natural Gas Storage change
20:00 US Consumer Credit Change
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Friday's UK Corporate Events

BG Group - Q1 Results
Rolls-Royce - Q1 Interim Management Statement
Intercontinental Hotels Group - Q1 Interim Management Statement
BBA Aviation - Q1 Interim Management Statement
Laird - Interim Management Statement
Man Group - Q1 Interim Management Statement
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Friday's Key Economic Events (all times in BST)

n/a UK Parliamentary Election Results
00:50 Japan BoJ Monetary Policy Meeting Minutes
n/a China Trade Balance
07:00 Germany Industrial Production
07:00 Germany Trade Balance
07:00 Germany Current Account
09:00 Italy Industrial Output
09:30 UK Trade Balance
13:30 US Nonfarm Payrolls
15:00 US Wholesale Inventories
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