BT Share News (BT.A)

LONDON (Alliance News) - Associated British Foods Thursday reported further strong growth for its Primark value retail chain, and its shares have risen even though it warned that this would be more than offset by further profit declines in its sugar business.

AB Foods said it now expects a marginal fall in its adjusted earnings per share in the current financial year, due to a "large reduction" in profits in its sugar business due to a fall in EU and world sugar prices.

However, revenue at Primark rose 12%, or 15% at constant currencies. The retailer, like peers, was hit by the unseasonably warm weather in early autumn that kept consumers out of shops packed with winter clothing ranges. However, Primark's saw strong trading over the Christmas period, AB Foods said.

Liberum has retained its Buy rating on AB Foods, arguing that Primark offers investors exposure to secular growth trends in the retail industry over the next decade. It estimates Primark can double sales and profits over the next five years, boosted by occasional partnership deals.

Analysts also argue that 2015 will prove a nadir for AB Foods' sugar business, which is set to recover after that.

Outside equities markets, the Swiss National Bank has unexpectedly announced that it has given up its ceiling for the Swiss franc against the euro, put in place more than three years ago to stem inflows of money from overseas that was pushing up the Swiss currency and hurting its export industry.

The decision to scrap the ceiling marks took the markets by surprise, after the SNB had said as recently as December that it remained committed to preventing the franc from strengthening beyond SFR1.20 to the euro.

The central bank's interventions to defend the ceiling have become more costly in recent months, as the crisis in Ukraine and expectations the European Central Bank will reveal full blown quantitative easing to stimulate the ailing eurozone economy have prompted more flows into the franc, which is seen as a relatively safe haven.

In its effort to weaken the franc, SNB had increased its foreign currency assets to 495 billion francs by the end of December, a strategy that greatly increased the bank's exposure to currency fluctuation risks.

The SNB said that although the franc was still high, its overvaluation has decreased because the depreciation of the euro against the dollar means that the franc has also weakened against the US currency. "In these circumstances, the SNB concluded that enforcing and maintaining the minimum exchange rate for the Swiss franc against the euro is no longer justified," it said.

The euro dropped to its lowest level since November 2003 against the dollar in the aftermath of the announcement, while the pound its highest euro rate since March 2008.

The SNB also lowered the interest rate on sight deposit account balances that exceed a given exemption threshold by 0.5 percentage points, to negative 0.75%, making it even less of an attractive safe haven.

The moves have pushed up the price of gold, perceived as an alternative safe haven investment, and gold mining stocks are amongst the best performers in the FTSE 250.

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Markets: London stocks lost early gains after the SNB's unexpected decision, but the FTSE 100 is now back in positive territory.

US stock futures are pointing to a slightly lower open on Wall Street. The DJIA, S&P 500 and the Nasdaq 100 are all set to open down about 0.1%.

FTSE 100: up 0.3% at 6,405.28
FTSE 250: down 0.4% at 15,815.34
AIM ALL-SHARE: down 0.2% at 695.86
GBP-USD: up at 1.5237
EUR-USD: down at USD1.1682
GOLD: up at USD1,251.65 an ounce
OIL (Brent): flat at USD49.73 a barrel
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Top Corporate News
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Experian said it is confident of returning to a position of revenue growth as it approaches the end of its financial year, and for its full-year results to demonstrate stable margins and good progress in benchmark earnings, both at constant currency, and to exceed 95% cash flow conversion. In a trading update for the last three months of 2014, the information services company, which provides data and analytical tools to clients, said that revenue from continuing activities was down 1%. At constant exchange rates, growth was 2%, and organic revenue was unchanged.
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Tullow Oil said it is set to write off around USD1.6 billion of value on exploration activities and unsuccessful drilling and said impairment charges for the year will reach around USD600 million alongside an additional USD500 million loss on a disposal charge on two gas fields in the UK. For 2014, the company is expecting revenue to reach USD2.2 billion, resulting in a gross profit of USD600 million and pre-tax operating cashflow of USD1.5 billion. In November, Tullow said it expected its pretax operating cashflow for 2014 to reach USD1.7 billion.
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BP is set to brief workers in its North Sea operation later on Thursday about plans to make significant job cuts in the division, the BBC reported. The FTSE 100-listed oil major announced a restructuring in December in response to the fall in the oil price and Thursday's briefing is also expected to see it fall in line with rival operators and cut pay for contractors, the BBC said. BP employs nearly 4,000 people in its North Sea operation, with a further 11,000 across the UK.
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BG Group said gas and condensate production has begun at the West Franklin field in the UK North Sea, and it claimed to have pushed the boundaries of high pressure, high temperature developments in the process. The project is operated by French company Total SA and involves drilling three wells and installing two new platforms that are tied in to existing facilities. BG Group said the reservoir temperatures are extremely high and said the project has "advanced the boundaries of existing high pressure-high temperature technical know-how in the industry."
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UK telecoms regulator Ofcom said it has proposed new pricing rules that would set in stone BT Group's ability to maintain a sufficient margin between its wholesale and retail superfast broadband charges, allowing it to invest in its fibre network, whilst at the same time ensuring it wouldn't be able to undercut its rivals in the superfast broadband market. Ofcom said that in a draft decision it has notified to the European Commission, a new pricing rule would mean that BT must maintain a sufficient margin between its wholesale and retail superfast broadband charges in order to allow other providers profitably to match its prices.
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A decision must be made early in the next Parliament about the timing of selling down the state's stake in Royal Bank of Scotland Group, according to the UK's Chancellor of the Exchequer, George Osborne. Although the government has been able to cut down its holding in Lloyds Banking Group, another of the UK's banks that required state aid during the financial crisis, to less than 25% of its shares, it still retains about 80% of RBS. Osborne's comments demonstrate that policy on the banking system and its members remains a key area ahead of the UK's General Election in May.
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Home Retail Group said it expects to report benchmark pretax profit for the current financial year that's in line with market expectations, after its Argos unit traded "cautiously" over the key Christmas period, meaning sales rose only slightly but gross margins were also higher. The company also reported a decline in total sales and gross margins at its Homebase DIY chain, as expected, as it closed stores and sold off the stock at discount. The retailer said total sales rose 0.8% to GBP1.82 billion in the 18 weeks to January 3 at Argos, driven by a 0.7% increase in net new space. Like-for-like sales grew a modest 0.1%, driven by sales of products like video games, televisions and tablets that was partially offset by weak jewellery sales.
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Bovis Homes Group became the latest UK housebuilder to report further growth in profitability, as it built and sold more houses at a higher average price, while real estate advisor Savills said it expects its 2014 underlying results to be well ahead of its previous expectations after a very strong December. Bovis echoed peers in saying it expects to sell even more houses in 2015, although the rate of growth will stabilise after the exceptional recovery seen in 2014. It expects "2015 will be another successful year of growth in revenue and profit giving rise to further improvement in returns".
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Shares in Spire Healthcare Group were down mid-morning after private equity firm Cinven sold a 10% stake in the company at a discount. Cinvent sold 40.1 million shares in Spire at 315 pence per share, raising a total of GBP126.3 million. Spire shares fell 5.8% to 320.00 pence, one of the biggest fallers in the FTSE 250. Following the sale of the shares, Cinven has a remaining 48.3% stake in the company.
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Saga said it expects its dividend for the current financial year to be at the top end of its targeted 40-50% pay-out range, as the company reported that trading is in line with market expectations. Saga, which provides products and services including insurance and holidays to people aged over 50, said it will seeks to maximise returns for investors by optimising its balance of investment, dividends and debt reduction. Saga's trading update was made as part a Capital Markets Day to update investors and financial analysts on its strategy, which revealed a number of planned changes.
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AIM Movers
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DDD Group shares are up after it said shipments of its TriDef 3D consumer products have crossed the 50 million mark, largely due to a 20% year-on-year increase in 3D TV chip shipments during 2014, while its soon-to-be-launched software products had got a positive response at a recent key trade show and it is already talking with mobile market customers about them. Deltex Medical Group is also up after it signed up another dedicated trainer hospital in the US, bringing the total number in the country to seven. Alecto Minerals shares have fallen sharply after it raised GBP600,000 by way of a placing with new and existing shareholders at a 40% discount. Scientific Digital Imaging is down by a third after it launched a discounted equity fundraising to raise GBP0.5 million for working capital and to cover the recent costs for re-organising its synoptics business. Clean Air Power is another faller even though it said its sharply-reduced 2014 revenue had come in slightly above market expectations and key partner Ricardo Inc had re-affirmed its commitment to the co-operation agreement that the companies have. Enteq Upstream is down after it issued a warning on its full-year sales on the back of the impact of the falling oil price on its North American customer base. The company said it expects its sales for the year to March 31 to be substantially lower than current expectations and against the year before, owing to a slump in capital equipment purchases and budget cuts by North American customers.
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Other Top Economics And General
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An index measuring house prices in the UK was up 11% in December, the Royal Institution of Chartered Surveyors said. That beat forecasts for an increase of 10%, although it was down from 13% in November. Many property surveyors expect prices to rise again in the near term, the survey showed, with a net 15% expected house price rises over the next three months.
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Online retail spending in the UK surpassed GBP100 billion for the first time in 2014, according to the IMRG Capgemini e-Retail Sales Index. The report showed GBP104 billion in total was spent online by UK shoppers over the year, up 14% on 2013. IMRG Capgemini has forecast this will rise a further 12% in 2015 to push total online sales up to GBP116 billion.
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Germany's economy grew the most in three years during 2014 amid record high employment, largely led by domestic demand and investments, and the country recorded a fiscal surplus for the third consecutive year. Gross domestic product grew 1.5%, in line with economists' expectations, preliminary data from Destatis showed. The figure was much better than the modest 0.1% growth in 2013. Further, Destatis announced that the general government net lending was the second highest since German unification. The fiscal surplus for 2014 was 0.4% of GDP.
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Eurozone trade surplus increased slightly to a new record in November on a marginal growth in exports, Eurostat reported. The trade surplus rose to a seasonally adjusted EUR 20 billion from EUR 19.6 billion in October. Exports rose by 0.2% in November from last month when it fell by 0.1%. At the same time, imports remained flat after falling 1.2% in October.
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Ireland's consumer prices declined annually for the first time in ten months in December, figures from statistical office showed. The consumer price index dropped 0.3% year-on-year following 0.1% rise in the previous month. It was the first fall since February, when prices declined 0.1%.
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In an unscheduled review, the Reserve Bank of India cut its key rate unexpectedly by a quarter point as a fall in inflation created scope for policy manoeuvre. The central bank lowered the repo rate to 7.75% from 8.00%, with immediate effect. The reverse repo rate was adjusted to 6.75% from 7.00%. The repo rate is the rate at which the central bank lends to commercial banks and the reverse repo rate is the rate at which the central bank accepts deposits from banks. This was the first reduction in nearly two years. Although RBI chief Raghuram Rajan signalled policy loosening early this year, Thursday's decision ahead of the bank's scheduled meeting on February 3 and the government's annual budget announcement in late February, was highly unexpected.
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Chinese bank lending and foreign exchange reserves declined at the end of 2014, data from the People's Bank of China revealed. Bank lending fell to CNY697.3 billion in December from CNY852.7 billion in November. It was also below the expected lending of CNY890 billion.
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An index measuring producer prices in Japan was down 0.4% on month in December, the Bank of Japan said on Thursday, showing a score of 104.8. That missed forecasts for a decline of 0.3%, which would have been unchanged from the November reading following a downward revision from -0.2%. On a yearly basis, prices added 1.9% - also missing expectations for 2.1% and down from the downwardly revised 2.6% gain in the previous month.
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British Prime Minister David Cameron and US President Barack Obama said stronger economies were critical to maintaining free speech and defeating a "distorted ideology" manifest in Islamist gunmen killing 17 people in Paris last week. Writing in a joint article in The Times ahead of their meeting in Washington, they vowed not to be "cowed by extremists" and promised not to allow anyone to "muzzle free speech."
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The Organization for Security and Co-operation in Europe said some of its observers have been pulled out of eastern Ukraine, where violence has surged this week despite a ceasefire. Some member states have temporarily withdrawn their monitors from the Luhansk and Donetsk regions," OSCE spokesman Michael Bociurkiw said by telephone. He added in emailed comments that the observers were moved "quite some time ago" and remain with the mission and in Ukraine.
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Indonesian divers were sent to examine the fuselage of the crashed AirAsia plane after it was located by a Singapore search vessel, an official said. "We will try to estimate its weight so that we can decide how to lift it," Air Commodore Suryadi Supriyadi, the search operation director, said by phone. Divers were also tasked with finding more bodies, which are believed to be trapped in the fuselage, he said. So far, 48 bodies have been recovered since the aircraft crashed on December 28 on its way from Surabaya, Indonesia, to Singapore with 162 people on board.
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Afternoon Watchlist (all times in GMT)

13:30 US Jobless Claims
13:30 US NY Empire State Manufacturing Index
13:30 US Producer Price Index
15:00 US Philadelphia Fed Manufacturing Survey
15:30 US EIA Natural Gas Storage change
16:15 Germany German Buba President Weidmann speech
23:50 Japan Foreign bond/stock investment
23:50 Japan Tertiary Industry Index
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Friday's Key UK Corporate Events

MoneySupermarket.com - Trading Statement
JD Sports Fashion - Trading Statement
Record - Q3 Trading Statement
Spectris - Trading Statement
Acacia Mining - Q4 Production Results
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Friday's Key Economic Events (all times in GMT)

07:00 Germany Consumer Price Index
07:45 France Budget
10:00 EU Consumer Price Index
13:30 US Consumer Price Index
14:15 US Industrial Production
14:55 US Reuters/Michigan Consumer Sentiment Index Preliminary
21:00 US Total Net TIC Flows
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