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LONDON (Alliance News) - The following is a summary of top news stories Tuesday.
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COMPANIES
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J Sainsbury reported a drop in sales in the fourth quarter of its financial year, despite price reductions and a volume increase across the business. The UK's third-largest supermarket chain said total retail sales were down 0.3% excluding fuel in the 10 weeks to March 14, and down 2.7% including fuel. Like-for-like sales were down 1.9% excluding fuel, and down 3.9% including fuel for the fourth quarter. Still, the drop in like-for-like sales wasn't as severe as analysts had expected. Sainsbury's sales drop came despite a price reduction in over 1,100 products following a GBP150 million price investment in November, although the supermarket says it has seen volume growth across the food business and an average uplift of over 3% on the price-reduced products.
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Antofagasta reported lower 2014 earnings, as expected, as revenue was hit by a drop in copper prices and higher cash costs, and it cautioned that copper prices are set to remain volatile this year and it's keeping its dividend policy under review while it tries to resolve issues at the Los Pelambres mine in Chile. The miner reported a pretax profit of USD1.57 billion for 2014, down from USD2.08 billion in 2013, as revenue declined by 11% to USD5.29 billion, from USD5.97 billion, largely on the back of an 8.5% decline in realised copper prices, a 7.1% decline in gold prices, as well as a small decline in sales volumes. Although revenue was in line with analyst expectations, pretax profit was below the analyst consensus of USD1.66 billion, as the company booked a USD88.3 million increase in depreciation at its Centinela and Michilla operations in Chile.
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Royal Dutch Shell said it has struck a deal with Canadian convenience store operator Alimentation Couche-Tard Inc to sell its Danish marketing business. Shell said the sale will include its retail, commercial, fleet and fuels, aviation and trading and supply businesses in Denmark. Shell added its upstream business in Denmark will not be impacted by the agreement and said it is seeking a buyer for its Fredericia refinery.
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Media and communications regulator Ofcom has fined BT Group GBP800,000 for its failure to provide an improved text-to-voice service for its customers with hearing or speech impediments between April and September 2014. Ofcom told all UK landline and mobile phone operators to launch the Next Generation Text Service by April 18, 2014, but BT missed the deadline due to technical problems with the sound quality of emergency calls. It eventually launched the service on September 24, 2014. Ofcom said it acknowledged that the emergency calls problem became apparent only late in the process and conceded the level of financial harm to consumers resulting from the delay was limited.
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Sky said it has invested a further USD5 million in start-up internet TV company 1Mainstream, continuing a string of investments the British pay-TV operator has been making in companies it hopes are developing the technologies of the future. Sky had already invested USD2 million in 1Mainstream, and its USD5 million top-up is in the form of convertible debt security. 1Mainstream plans to create a new subsidiary in which Sky will be a shareholder to focus on new product concepts.
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Severn Trent said it has already locked-in GBP200 million of the savings it has to make over the next five years, and has also made a GBP190 million investment in renewable energy to help power its operations. The company recently agreed with the UK water regulator Ofwat that it will make GBP372 million of efficiency savings between 2015 and 2020, and said Tuesday that it has already locked-in GBP100 million of savings by renegotiating supplier contracts, and GBP100 million from the structural organisation it announced last month.
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RSA Insurance Group is considering offloading its business in Latin America in what would mark the biggest asset disposal yet under Chief Executive Stephen Hester as he pushes on with a wide-ranging restructuring of the company, the Financial Times reported. The FTSE 100-listed insurer has hired Goldman Sachs to handle a proposed sale of the business, which accounted for around a tenth of its total premium income in 2014, the FT said, citing sources familiar with the matter.
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BHP Billiton recommended shareholders approve the proposed demerger of South32 to allow the group to streamline its activities and make cost reductions, and said both companies remain committed to its dividend policies. "The demerger will simplify BHP Billiton and has the potential to unlock shareholder value, while creating a new global diversified metals and mining company with a significant industry presence in each of its major commodities," said Chairman Jac Nasser. BHP is retaining its core portfolio of 19 assets based in eight countries over three continents, which generated 96% of the company's underlying earnings before interest and tax in 2014, and separating its less profitable assets, mostly in the southern hemisphere, to South32.
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Kier Group said it has been named on all three lots under the Southern Construction Framework and said it has won two contracts worth GBP130 million at the King's Cross development in north London. The construction and property group said it has been selected for all three lots on the Southern Construction Framework, a four-year framework with an expected value of more than GBP2 billion. In addition, Kier has expanded its work pipeline for the Argent development at King's Cross after being appointed preferred bidder on two contracts worth a total of GBP130 million.
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Online takeaway platform Just Eat reported strong growth in profit and revenue in 2014, as order volumes grew by half on the back of increased numbers of active users, particularly those using mobile devices to do their ordering, and it said the strong trading momentum has continued into 2015. The company, which listed last April, reported a pretax profit of GBP57.4 million in 2014, up from GBP10.2 million in 2013, as it booked GBP37.8 million in gains for changes in control at its French and Brazilian operations.
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Trinity Mirror confirmed that it's at an early stage of evaluating "certain" assets of rival newspaper group Northern & Shell, after The Times earlier reported that the owner of The Mirror was weighing up a bid for rival The Express. Trinity Mirror said there's no certainty an agreement will be reached on the "range of outcomes currently under discussion". The Times had quoted one person with knowledge of the situation as saying talks were at an early, information-sharing stage, but also quoted another person saying that negotiations are advanced and Daily Express owner Richard Desmond could bank as much as GBP100 million if the sale goes ahead.
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MARKETS
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UK stocks are trading mixed, led by oil-related stocks as the ZEW survey results for Germany and the Eurozone came in mixed.
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FTSE 100: up 0.1% at 6,813.23
FTSE 250: down 0.5% at 17,114.60
AIM ALL-SHARE: up 0.1% at 716.86
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GBP-USD: down at USD1.4776
EUR-USD: up at USD1.0615
GOLD: down at USD1154.13 per ounce
OIL (Brent): down at USD53.07 a barrel
(changes since end of previous GMT day)
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ECONOMICS AND GENERAL
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The British government announced the biggest increase in the national minimum wage since 2008, benefiting over 1.4 million of the lowest-paid workers, ahead of the general election in May. Prime Minister David Cameron and Deputy Prime Minister Nick Clegg in a joint statement said the minimum wage will rise by 3% to GBP6.70 per hour with effect from October 2015. This was the biggest real-term rise since 2008. The minimum wage for apprentices will increase by 57p an hour to GBP3.30. This was the largest ever increase in wages for apprentices. The minimum wage for 16-17 year olds was lifted to GBP3.87 an hour from October.
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The House of Lords European Union Committee called for a ministerial conference of North Sea countries to ensure a "holistic approach is developed to managing the environmental challenges and economic opportunities of the North Sea." The Committee, which scrutinises the UK government’s policies and actions in respect of the European Union, said the conference "must deliver the urgently needed strategic and political vision to sustain the North Sea and secure it for future generations." The call for a wider cross-border approach to boosting investment in the North Sea comes after the Oil and Gas Authority, UK Chancellor of the Exchequer George Osborne, and industry body Oil and Gas UK all separately said measures to support the North Sea oil and gas industry were required in the aftermath of the recent sharp drop in oil prices.
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Eurozone consumer prices remained negative for the third month in February as initially estimated, final report from Eurostat showed. The harmonized index of consumer prices fell 0.3% in February from last year, slower than January's 0.6% decline. The annual decrease came in line with the flash estimate published on March 2. The decline in December consumer prices was the first fall since October 2009 and the 0.6% decrease seen in January was the biggest decline since July 2009.
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The foreign ministers of Germany, France and Britain stressed their determination to work for a deal on Tehran's nuclear programme, following talks in Brussels with their Iranian counterpart Mohammad Javad Zarif. Negotiations to curb Tehran's ability to develop a nuclear weapon have entered a crucial phase, with Iran and six world powers stepping up the diplomatic pace this week to reach a framework deal by the end of March. The agreement foresees allowing Iran to enrich uranium as reactor fuel only under tight international controls. In return, economically stifling sanctions on Tehran will be lifted.
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The president of the European Parliament, Martin Schulz, welcomed the participation of EU countries in a new China-based development bank for Asia. "I think participation is good. The more countries take part, the better," the German politician told reporters during a visit to Beijing. Last week, Britain said it would seek to be a founding member of the Asian Infrastructure Investment Bank, designed to fund projects such as new roads and telecommunications networks in the region. France, Germany and Italy have also agreed to join the bank, according to European officials quoted by the Financial Times. The US has expressed concern over the transparency of the China-led AIIB, which is seen as a rival to the US-based World Bank or the Asian Development Bank, which is dominated by Japan.
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Israelis went to the polls to elect a new parliament, as Prime Minister Benjamin Netanyahu vowed no Palestinian state would be established if he was re-elected. Voting in Jerusalem, Netanyahu said that despite the close race between his nationalist Likud party and the dovish Labour party, he would not accept a government of national unity that would include both. "There will be no unity government with Labour. I will form a nationalist government," he told reporters. His first coalition partner would be the pro-settler Jewish Home party of Economy Minister Naftali Bennett, he said.
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Brazil President Dilma Rousseff signalled her readiness for dialogue and said she would release an anti-corruption plan in the coming days. Revelations about growing corruption, added to growing economic problems, sent 1.7 million protesting Brazilians into the streets over the weekend, many calling for her to step down. "The government hears the protests in the streets and will continue to do so. I am open for dialogue," the left-wing politician said in an address in Brasilia broadcast on television.
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