LONDON (Alliance News) - The following is a summary of top news stories Thursday.
----------
COMPANIES
----------
Royal Mail PLC dropped to the bottom of the FTSE 100 after the company reported a full-year performance in line with expectations, but said it faced headwinds including competitive trading environment in its parcels business. In its maiden full-year results for the year to March 30, Royal Mail said reported pretax profit rose to GBP1.7 billion from GBP283 million last year. Excluding exceptional items, the firm said pretax profit rose to GBP363 million from GBP304 million last year. Royal Mail said it is facing increasing challenges in the UK's parcels and letters markets. "The competitive environment on the parcels side is more intense. We are taking steps to remain the leader in this growing market. On the letters side, the headwind is direct delivery and we have strategies in place to counter its adverse financial impact," said Chief Executive Moya Greene.
----------
Brewing giant SABMiller PLC reported higher pretax profit for its last financial year, despite a dip in revenue, supported by volume increases and demand driven by its emerging markets businesses, which continue to hold off weakness in North America and Europe. The brewer of brands including Peroni, Pilsner Urquell and Grolsch, said it continues to see good growth coming out of emerging markets, and reported a pretax profit of USD4.82 billion for the year ended March 31, a 3% increase on the USD4.68 billion reported a year earlier. The group declared a full year dividend per share for the year of 105.0 US cents, up 4% on the prior year.
----------
Royal Dutch Shell PLC said it will stop providing a scrip dividend from the point it gives out its second quarter 2014 interim dividend, meaning that the second quarter interim dividend and all other dividends from the company will now be provided in cash. The oil and gas major said the decision will allow for a more efficient share buy-back programme, and it expects that buy-backs will offset dilution created by scrip dividends by the end of 2015, with roughly 135 million shares currently outstanding. The company said shareholder distributions in 2013, including dividends announced and share buy-backs, totalled USD16 billion.
----------
BP PLC said it is appealing to the US Supreme Court over a ruling on Monday supporting compensation claims for certain businesses affected by the 2010 Gulf of Mexico oil spill. The Fifth Circuit appeals court in New Orleans on Monday rejected BP’s request for a full review of the company’s case regarding settlement to victims of the disaster, as it seeks to establish that the compensation settlement it agreed with plaintiffs’ lawyers in 2012 is being interpreted unfairly. The oil and gas major's final chance to limit the level of compensation it has to pay above its original estimate of USD7.8 billion, will be by the appeal at the Supreme Court. The company argues that the terms of its original compensation agreement are being misinterpreted and it is now expected to pay out to unwarranted claims over events that were not connected to the Deepwater Horizon incident.
----------
Fat Face Group Ltd said it has pulled out of its UK stock market debut planned for later this month, citing weak conditions in the UK equity market as the main reason for backing out. The retailer had originally been looking to raise up to GBP110 million in gross proceeds from the initial public offering, which was expected to value the company at up to GBP400 million. "Despite a strong level of interaction with and interest from institutional investors, the company and its majority shareholder have decided to discontinue its plans for an IPO at this stage," the company said in a statement. It said it was going to use the money from the IPO to pay off existing debt and settle related bank costs and fees, offering new and existing shares to institutional investors.
----------
United Utilities Group PLC posted a 75% increase in pretax profit during its full year, as the company benefited from expected revenue increases due to strong operational performance, even before receiving GBP157 million in a deferred tax credit. The major water firm said its pretax profit increased to GBP544.7 million for the twelve months ended March 31 from GBP311.8 million the previous year, as revenues increased 3.7% to GBP1.70 billion from GBP1.64 billion. The company announced in March that it expected to report revenue and underlying profits that are higher than the year before, on the back of continued improvements in its customer service operations, stating that it remained ahead of schedule in delivering its 2010-15 regulatory out-performance targets.
----------
Capita PLC said it has signed a contract with BAE Systems PLC to provide a new IT service for its submarine building business in a deal worth between GBP60 - GBP70 million to Capita over the next five years. Capita said its IT Services division will provide an enhanced IT service model across the submarine building business in Barrow-in-Furness, Cumbria, which will be aligned with the wider BAE Systems group IT framework. The company said the new service model will provide BAE with reduced service charges and higher levels of IT service management performance through using specialist teams focused in particular fields, such as end user computing, collaborative services and applications management.
----------
Anglo-Dutch consumer goods giant Unilever PLC said it is selling its North America pasta sauces business, including the Ragu and Bertolli brands, to Japanese condiments maker Mizkan Group, in a deal worth USD2.15 billion. Unilever, the maker of consumer products including Dove soaps and Ben & Jerry's ice cream, had said last month that its was undertaking a "strategic review" of its North American pasta sauces businesses, and said that it was also considering sell its Slim Fast weight loss brand. Unilever said the disposal of Ragu and Bertolli to Mizkan allows its to "sharpen its focus within its foods business".
----------
Glencore PLC said it will close its Newlands underground coal mine in Australia in late 2015 as part of its ongoing strategy to combat a collapse in coal prices. The mining giant said it will not extend the life of the Newlands mine in Queensland's Bowen Basin, which will therefore reach the end of its life in the fourth quarter 2015 after extracting the final volumes of coal from the site.
----------
Polymetal International PLC said that it has agreed to acquire the major Kyzyl gold project in Kazakhstan for up USD1.12 billion in cash and shares, a move which will increase its reserves by 50%. The gold, silver and copper-mining exploration and production company, with operations in Russia and Kazakhstan, said it has entered binding agreements with Sumeru Gold BV and Sumeru LLP for the acquisition of Altynalmas Gold Ltd, the holding company for the Kyzyl gold project. The Kyzyl gold project is a highly prospective mining area including the Bakyrchik and Bolshevik gold deposits, which Polymetal said would increase its gold equivalent reserves by roughly 50% including a single high grade region holding 6.7 million ounces of gold at 7.5 grams per tonne.
----------
Ferrexpo PLC said its operations in Ukraine remain unaffected by the political instability in the country, and it expects to shortly receive bonds with a value of USD117 million in local currency from the Ukrainian government for an outstanding value-added tax refund. The iron ore producer, which operates solely in Ukraine, will say at its annual general meeting on Thursday that both production and shipment of its iron ore pellets have been in line with expectations and costs have continued to fall due to improved efficiency and a decline in the local currency exchange rates.
----------
Cycle and car maintenance product retailer Halfords Group PLC said its profits and revenues rose in its last financial year, as the UK's growing passion for cycling - and for online shopping - plus a revamp of its products, drove strong growth across the business. For the year ended March 28, the retail chain recorded pretax profit of GBP72.6 million, up 2.3% from GBP71.0 million a year earlier, driven by a 7.9% increase in revenues to GBP939.7 million from GBP871.3 million last year.
----------
MARKETS
----------
UK stocks are flat to slightly higher, with indices off their early highs after making their first convincingly positive start to a session in the week so far, amid a raft of company news and as the second estimate of UK GDP in the first quarter retained healthy-looking growth.
----------
FTSE 100: flat at 6822.02
FTSE 250: up 0.3% at 15646.83
AIM ALL-SHARE: up 0.5% at 795.71
----------
The pound is down against the dollar after data released along with the UK GDP figures showed UK borrowing jumped unexpectedly in April. Public sector net borrowing rose in April, disappointing the market which had been expecting it to fall.
----------
GBP-USD: down at USD1.6873
EUR-USD: down at USD1.3677
GOLD: up at USD1295.24 per ounce
OIL (Brent): down at USD110.58 a barrel
(changes since end of previous GMT day)
----------
ECONOMICS AND GENERAL
----------
The UK budget deficit exceeded expectations in April, official figures showed. Public sector net borrowing excluding interventions totaled GBP 7.4 billion in April, which was GBP 1.7 billion higher than in April 2013, the Office for National Statistics said. The shortfall was forecast to fall to GBP 4.8 billion. For the financial year 2013/14, public sector net borrowing excluding the temporary effects of financial interventions, the transfer of the Royal Mail Pension Plan and the transfers from the Bank of England Asset Purchase Facility Fund was GBP 107.4 billion, data showed.
----------
The UK economy expanded at a faster pace than initially estimated in the first quarter, second estimates from the Office for National Statistics showed. Gross domestic product grew 0.8% from the prior quarter, unchanged from the estimate published on April 29. The sequential growth follows 0.7% rise in the fourth quarter of last year. On a yearly basis, GDP was up 3.1%, also in line with initial estimate.
----------
The Federal Reserve discussed plans to exit stimulus but gave no indication that a rate hike is imminent, the minutes of the most recent Federal Reserve meeting showed Wednesday. In April, the Fed kept its benchmark rate unchanged at historic low levels near zero and it tapered quantitative easing by another USD10 billion per month. Before voting on that action, policy makers examined "several approaches" for tightening but have not decided on the appropriate mix of tools to wind down its unprecedented support for the US economy.
----------
French business confidence weakened unexpectedly in May, a closely watched survey data revealed. The business confidence index fell slightly to 99 in May from 100 in April, the Insee reported. The score was forecast to remain unchanged at 100.
----------
An index monitoring manufacturing activity in China came in with a score of 49.7 in May, the latest flash estimate from HSBC and Markit Economics revealed. That topped forecasts for a score of 48.3 and was up sharply from 48.1 in April - and while it does remain below the line of 50 that separates expansion from contraction, the May reading represents a five-month high.
----------
Thai Army Chief Prayuth Chan-ocha announced a coup after his efforts to reconcile rival political factions failed. Prayuth, flanked by the heads of the air force and navy, said it had been necessary to seize power to prevent further violence, deaths and damage to property in the country after months of political turmoil. The announcement broadcast on Thai TV followed a swift end to the second day of reconciliation talks at the Army Club in Bangkok, where Prayuth had gathered representatives of rival factions to find a solution to the political stalemate.
----------
NATO has seen some activity at the Ukraine border that may be pointing to a long-promised withdrawal of Russian troops, the chief of the military alliance says. "Late yesterday, we have seen limited Russian troop activity in the vicinity of the border with Ukraine that may suggest that some of these forces are preparing to withdraw," NATO Secretary General Anders Fogh Rasmussen said during a visit to Montenegro. "It is too early to say what this means, but I hope this is the start of a full and genuine withdrawal," he added. "At present, most of the previously deployed Russian force remains near the Ukrainian border and we see continued Russian exercises in the same area."
----------
The Ukrainian government has called on the UN Security Council to convene to address the crisis in the country ahead of a presidential election at the weekend. "At the meeting, we will submit evidence that Russia wants to torpedo the presidential election with an escalation of the conflict," Prime Minister Arseniy Yatsenyuk has said in Kiev.
----------
About 80 US military personnel have been sent to Chad to help locate and "support the safe return" of more than 200 schoolgirls abducted last month in neighbouring Nigeria by Islamist militants, the White House said Wednesday. The military deployment is meant to "support the operation of intelligence, surveillance and reconnaissance aircraft for missions over northern Nigeria and the surrounding area," US President Barack Obama told Congress in a letter. The US force will remain in Chad as long as needed to help resolve the abductions by Nigerian extremist group Boko Haram, Obama said in the formal notification. Earlier Wednesday, at least 30 people were killed by militants in a village in northern Nigeria, after twin blasts killed 118 people Tuesday in the central town of Jos.
----------
Copyright 2014 Alliance News Limited. All Rights Reserved.
10 Sep 2015 09:19
