BT Share News (BT.A)

LONDON (Alliance News) - The following is a summary of top news stories Thursday.
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COMPANIES
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UK telecoms regulator Ofcom said BT Group's Openreach division must be reformed to better serve customers and businesses, and that BT "must open up" its network. Importantly though, the regulator did not enforce a structural separation of the division for the time being, although it did say it is necessary to overhaul Openreach's governance. It will make further proposals on this overhaul later in the year, but said a new model might require it to become a ring-fenced 'wholly-owned' subsidiary of BT, with its own purpose and board members. Ofcom didn't demand Openreach be spun off immediately, though it kept that open as a future possibility.
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Lloyds Banking Group lifted its payout to shareholders and declared a special dividend, even as the bank's 2015 profit took a dent from a new GBP2.1 billion charge for the payment protection insurance scandal. The bank raised its dividend for the year to 2.25 pence per share from 0.75p in 2014, and declared a special payment of 0.5p in addition. Pretax profit fell to GBP1.64 billion in 2015 from GBP1.76 billion in 2014. Underlying profit, which excludes asset sales and the cost of PPI provisions, rose to GBP8.11 billion from GBP7.76 billion. The total PPI provision for the year was GBP4.0 billion, up from GBP2.2 billion in 2014, including a fourth-quarter charge of GBP2.1 billion.
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RSA Insurance Group reported a 43% jump in annual operating profit, beating analyst expectations, and raised its full-year dividend to 10.5 pence from 2.0p the prior year. Operating profit before tax rose to GBP523 million in 2015, the London-listed insurer said, up from GBP365 million at actual exchange rates and from GBP334 million at constant currency. Analysts had expected operating profit of GBP481.0 million for the year, according to company-compiled consensus estimates.
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Merlin Entertainments reported growth in profit and revenue in its recently-ended financial year, despite a tough summer when a rollercoaster crashed at Alton Towers, and said it has signed a partnership deal with Big Bus Tours. The theme park and attractions operator said pretax profit in the year ended December 26 rose to GBP237 million from GBP226 million the year before, as revenue increased by 2.3% to GBP1.28 billion from GBP1.25 billion. Merlin will pay a total dividend of 6.5 pence per share, a 4.8% increase on the 6.2p paid the year before.
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Anglo-Dutch business information group RELX expressed confidence for a further growth in 2016, as it reported a rise in pretax profit for 2015. It reported a pretax profit of GBP1.31 billion, up from GBP1.23 billion in 2014, as revenue rose to GBP5.97 billion from GBP5.77 billion. It proposed a full year dividend of 29.7 pence, up from 26.0 pence in 2014 for RELX PLC. RELX said it completed GBP500 million in share buybacks in 2015, and expects to undertake share buybacks of GBP700 million in 2016.
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St James's Place lifted its full-year dividend by 20% as the wealth manager's operating profit beat analyst expectations. Operating profit, stated on an embedded value basis, rose to GBP660.2 million in 2015 from GBP596.4 million, beating analyst expectations of GBP553.4 million, though IFRS profit before shareholder tax fell to GBP151.3 million from GBP182.9 million. St James's Place said it will pay a dividend of to 27.96 pence per share, up 20% year-on-year.
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South African paper and packaging group Mondi said its pretax profit rose 29% in 2015 thanks to strong and profitable trading across its operations, prompting a 24% hike to its dividend payout. Mondi said its pretax profit for the year to the end of December rose to GBP796.0 million from GBP619.0 million a year earlier, as revenue grew to GBP6.82 billion from GBP6.40 billion, a 7.0% rise. The group will pay a final dividend of 37.62 euro cents per share, taking its total dividend to 52.0 cents, up 24% year-on-year. Mondi added it has agreed a deal to sell its uncoated fine paper operations in Austria to a joint venture subsidiary, Mondi SCP. Mondi owns 51% of the SCP business, with the rest owned by Eco-Invest AS, and the unit owned its uncoated fine paper mill in Slovakia.
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Capita said it is looking for organic revenue growth of at least 4.0% in 2016, as the outsourcer reported lower pretax profit in 2015. Pretax profit fell to GBP112.1 million in 2015, from GBP292.4 million in 2014. On an underlying basis, which is stated before the cost of business exits and other items, pretax profit rose to GBP585.5 million from GBP535.7 million. Capita lifted its dividend for the year as a whole to 31.7 pence from 29.2p.
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British American Tobacco reported growth in profit in 2015 but a decline in revenue as it continued to be hit by negative currency movements throughout the year. The tobacco giant said pretax profit in 2015 grew to GBP5.86 billion from GBP4.85 billion in 2014, even though revenue fell by 6.2% to GBP13.10 billion from GBP13.97 billion. BAT said revenue declined as a result of adverse movements in foreign exchange rates, and that revenue would have risen by 5.4% to GBP14.72 billion if currencies had remained constant. BAT will pay a dividend of 154.0 pence per share for the year, which is a 4% increase on the 148.1p paid the year before.
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The legal troubles facing miner BHP Billiton deepened after it emerged that executives at its Brazilian joint venture are facing murder charges over the Samarco tailings dam burst, The Times reported. The allegations, which may lead to criminal charges being brought against the executives, came after BHP warned it may take years to draw a line under the liabilities arising from the dam burst. Police in the Minas Gerais state in Brazil, where the mine disaster took place, ordered the arrest of six Samarco executives, including its chief executive, accusing them of "aggravated homicide".
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MARKETS
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A pile of largely positive UK company earnings helped push UK indices into the green, with Lloyds and RSA Insurance among the standout performers. Wall Street was pointed to a higher open.
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FTSE 100: up 2.1% at 5,989.06
FTSE 250: up 1.5% at 16,353.52
AIM ALL-SHARE: up 0.1% at 688.03

GBP: flat at USD1.3920 (USD1.3944)
EUR: flat at USD1.1018 (USD1.1034)

GOLD: down at USD1,235.60 per ounce (USD1,248.40)
OIL (Brent): up at USD34.14 a barrel (USD32.91)

(changes since previous London equities close)
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ECONOMICS AND GENERAL
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The UK economy expanded as estimated in the fourth quarter, the second estimate published by the Office for National Statistics showed. Gross domestic product grew 0.5% sequentially, unrevised from the preliminary estimate issued on January 28. It was slightly faster than the 0.4% expansion seen in the third quarter. On a yearly basis, GDP expanded 1.9%, unrevised from the previously published estimate.
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Banks should sell their stake in a crucial piece of UK payments infrastructure to help increase innovation and competition, the UK's Payment Systems Regulator said. The PSR, which is a subsidiary of the UK's Financial Conduct Authority but has its own objectives, managing director and board, was publishing the findings of its market review into the ownership and competitiveness of the infrastructure that supports BACS, Faster Payments System (FPS) and LINK. The regulator now wants feedback on the report.
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Eurozone inflation rose less than initially estimated in January, final data from Eurostat showed. Inflation edged up to 0.3% in January from 0.2% in December. It was slower than the 0.4% estimated initially. Nonetheless, this was the fourth consecutive rise in prices. Headline inflation has been below the European Central Bank's target of 'below, but close to 2%' since early 2013.
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By Arvind Bhunjun; arvindbhunjun@alliancenews.com; @ArvindBhunjun

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