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LONDON (Alliance News) - FTSE 100 DIY retailer Kingfisher bucked a down market early Tuesday, rising 2.0% after reporting growth in sales in the first quarter of its financial year and said it is on track in the first year of its five-year plan.
At the other end of blue-chip index, Coca-Cola HBC was down 3.4% after Credit Suisse placed 5.4 million shares in the bottler on behalf of New Argen Holdings.
Peppa Pig-owner Entertainment One was the worst mid-cap performer on a big day for FTSE 250 company reporting. The stock was down 5.1% after the company said its television and family divisions offset a weak financial year for its film arm.
Meanwhile, fracking for gas is back on the agenda, after councillors in North Yorkshire gave the green light to the first fracking operation in the UK for five years.
Here is what you need to know at the London market open:
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MARKETS
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FTSE 100: down 0.4% at 6,111.24
FTSE 250: down 0.4% at 16,957.18
AIM ALL-SHARE: up 0.1% at 731.58
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Hang Seng: down 0.4% at 19,737.09
Nikkei 225: closed down 0.9% at 16,498.76
DJIA: closed down 0.1% at 17,492.93
S&P 500: closed down 0.2% at 2,048.04
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GBP: firm at USD1.4490 (USD1.4475)
EUR: flat at USD1.1207 (USD1.1203)
GOLD: down at USD1,243.88 per ounce (USD1,248.30)
OIL (Brent): down at USD47.96 a barrel (USD48.28)
(changes since previous London equities close)
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ECONOMICS AND GENERAL
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Tuesday's Key Economic Events still to come
(all times in BST)
EU Eurogroup meeting
09:30 UK public sector net borrowing
10:00 Germany ZEW survey
10:00 EU ZEW survey
10:00 UK Inflation Report Hearings
11:00 UK CBI distributive trades survey
15:00 US new home sales
15:00 US Richmond Fed manufacturing index
21:30 US API weekly crude oil stocks
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Councillors in North Yorkshire have given the green light to the first fracking operation in the UK for five years. The controversial decision has been condemned as a travesty by those opposed to the move, but a "victory for pragmatism" by those in favour. The county council planning committee approved the application by UK firm Third Energy to frack for shale gas at an existing drilling site near the village of Kirby Misperton, between Malton and Pickering. The vote allows Third Energy to frack for shale gas using an existing two-mile deep well - called KM8 - drilled in 2013. Seven of the 11 North Yorkshire County Councillors on the committee voted in favour of the application.
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Boris Johnson says the government's "doom-laden" predictions over the economic consequences of Brexit are in danger of "becoming self-fulfilling". Johnson dismissed the latest Treasury forecasts of post-leave recession, saying the "whole thing's a hoax". On Monday, Prime Minister David Cameron warned that leaving the EU would be the "self-destruct option" for Britain, as the Treasury published an analysis warning that Brexit would plunge the country into a year-long recession and cost as many as 820,000 jobs.
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The German economy expanded at the fastest pace in two years as estimated in the first quarter, detailed quarterly national accounts from Destatis showed. Gross domestic product climbed 0.7% sequentially, faster than the 0.3% rise seen in the fourth quarter. GDP climbed 1.3% on a yearly basis, weaker than the 2.1% expansion seen in the previous quarter. On a calendar-adjusted basis, GDP growth improved to 1.6% from 1.3%.
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EU foreign ministers agreed to expand the bloc's anti-migrant smuggling operation in the Mediterranean Sea, taking on the additional tasks of training Libya's coastguard and helping to enforce a UN arms embargo on the country. The conflict-ridden North African nation has been a springboard for migrants trying to reach the EU, with smuggling networks taking advantage of the political turmoil gripping the country since longtime dictator Moamer Gaddafi was toppled in 2011.
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EU foreign ministers paved the way for their bloc to start negotiations with Mexico on overhauling a 16-year-old free trade agreement between the two sides. The move is being taken in light of trade deals that Brussels is negotiating with the US and Canada, two of Mexico's most important commercial partners. The EU exported goods worth nearly EUR34 billion to Mexico in 2015, while goods amounting to nearly EUR20 billion went from Mexico to the EU. The 28-country bloc is the second-largest market for the Latin American country after the US.
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Iraqi security forces have captured several areas on the outskirts of Fallujah on the first day of an offensive aimed at wresting the strategic city from Islamic State militants, military and security officials said. Security forces moved into the Karma, Shihabi and al-Sejar areas west of the city in the early morning, hours after Prime Minister Haider al-Abadi announced the offensive, the officials said on condition of anonymity.
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An estimated 148 people were killed on Monday as multiple car bomb and suicide attacks hit civilian targets in two usually peaceful cities on Syria's government-held Mediterranean coast, the Syrian Observatory for Human Rights reported. Supporters of the Islamic State group circulated a claim of responsibility for the attacks in Tartus and Jableh on social media, although dpa could not independently verify it.
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BROKER RATING CHANGES
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BARCLAYS RAISES IMPERIAL BRANDS TO 'OVERWEIGHT' (EW) - PRICE TARGET 4200 (3750) PENCE
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COMPANIES - FTSE 100
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Kingfisher reported growth in sales in the first quarter of its financial year and said it is on track in the first year of its five-year plan. The DIY retailer said total sales in the three months to April 30 grew by 5.1% to GBP2.72 billion on the same period the year before, as sales in France rose by 9.7%, sales in the UK & Ireland were up 1.3%, and other international sales increased by 6.0%. Kingfisher said it is making progress with its operational milestones for the year, with its unified IT platform now in all B&Q stores and the set-up of its new offer and supply chain organisation well underway.
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Severn Trent cut its annual dividend by 5.0% but said its reported profit and earnings soared during the past financial year, as it provided guidance for the year ahead. The UK water and wastewater company said its underlying pretax profit, which excludes exceptional items, rose by 4.4% in the financial year to the end of March to GBP313.6 million from GBP300.4 million a year earlier. Reported pretax profit soared to GBP322.3 million from GBP148.2 million, despite revenue declining 0.8% to GBP1.78 billion from GBP1.80 billion in the previous year. The dividend for the full year was reduced to 80.66 pence per share, a 5.0% cut from 84.90p the year before but in line with the company's policy. Severn Trent said the dividend for the current financial year will be 81.5p.
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Credit Suisse Securities said it placed 5.4 million shares in London-listed bottler Coca-Cola HBC on behalf of New Argen Holdings at GBP13.15 each, raising GBP71 million. The placing was initially announced on Monday by Credit Suisse, which acted as sole global coordinator and bookrunner. Following completion, New Argen, which is a private equity vehicle, continues to hold 4.5 million shares in Coca-Cola HBC, representing 1.2% of its issued share capital.
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Old Mutual, the Anglo-South African financial services company, said it has received interest from would-be buyers of its stake in OM Asset Management, the New York-listed boutique money manager. Old Mutual, which owns a 66% stake in OMAM, said it has received approaches from "third parties" to acquire its shareholding in the company. Old Mutual said it is "continuing to assess the options available" under Chief Executive Bruce Hemphill's plan to break up the group's four main businesses.
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National Grid late Monday said the New York Public Service Commission has issued an order approving a capital investment petition for USD1.3 billion of its Niagara Mohawk Utility. The gas and electric network operator said the order will result in two additional years at current rates for customers. The company said the petition provides incremental revenue of USD50 million in financial 2017 and USD90 million in financial 2018, with no increase to customer bills through the use of deferred credits.
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COMPANIES - FTSE 250
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Motoring organisation AA confirmed it is looking at options for its Irish business, in response to press speculation about a sale of the division. AA Ireland contributed 4% of AA's group revenue and 3% of group trading earnings before interest, taxation, depreciation and amortisation in the financial year ended January 31. AA says it is one of Ireland's leading consumer services businesses, providing insurance and breakdown cover, with 128,000 personal members and 185,000 insurance policies.
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Engineering software company AVEVA Group said its pretax profit fell in the financial year to the end of March due to one-off costs, while revenue also declined amid tough end-market conditions. The company, which last year saw a proposed reverse takeover by French energy company Schneider Electric collapse, said its pretax profit for the year to March 31 fell to GBP29.4 million from GBP54.9 million a year earlier. The drop mostly was caused by costs related to the failed Schneider deal and by restructuring costs. Revenue for the year fell to GBP201.5 million from GBP208.7 million. AVEVA will pay a final dividend of 30.0 pence per share, up 20% from 25.0p a year earlier. Total payout for the year will rise 18% to 36.0p from 30.5p.
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Film and television producer Entertainment One said its pretax profit and revenue grew in the year to the end of March, helped by a strong performance from its television and family divisions, which offset a weaker year for its film arm. The group said pretax profit for the financial year to March 31 grew to GBP47.9 million from GBP44.0 million, helped by revenue rising to GBP802.7 million from GBP785.8 million. The group will pay a dividend for the year of 1.2 pence per share, up from 1.1p a year earlier.
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Self-storage provider Big Yellow Group hiked its full-year dividend on the back of strong revenue growth in the year ended March 31, against a "backdrop of slower economic activity" in the UK. The company posted revenue of GBP101.4 million for the year, 20% higher than the GBP84.3 million reported a year earlier, with a like-for-like revenue increase of 10% on the previous year to GBP87.6 million from GBP79.9 million. Big Yellow lifted its final dividend by 13% to 12.80 pence per share, up from 11.30p, taking its dividend for the full year to 24.9p, higher than the 21.7p paid a year earlier.
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Car parts and bicycle retailer Halfords Group said it has acquired online bikes and accessories retailers Tredz and Wheelies Direct for GBP18.4 million. Tredz specialises in the sale of premium bikes and cycling parts, accessories and clothing, while Wheelies provides bicycle replacements for insurance companies. Both companies are based in South Wales.
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COMPANIES - INTERNATIONAL
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In a move to shift its economy away from oil, Saudi Arabia joined with US corporate giant General Electric to announce a deal worth billions of dollars to diversify the Gulf kingdom's economy. GE and Saudi Arabia will pursue projects worth USD3 billion in the coming years, GE said. The deal, announced in the Red Sea business hub of Jeddah, will include investments in the digital, aviation, healthcare and energy sectors.
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The rating agency Moody's lowered its evaluation of Deutsche Bank bonds, citing challenging business conditions and a difficult reorganization being carried out by the financial institution. The bank's debt was downgraded late Monday from Baa1 to Baa2, with a stable outlook. A Moody's statement cited weakness in recent earnings reports from Germany's largest bank, as well a wide-ranging overhaul announced last year.
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The Wall Street Journal reported that JPMorgan Chase & Co's private bank announced internally another round of layoffs affecting nearly 100 employees. The unit shared the news within the bank on Monday. The moves, which affect employees in a range of positions and locations, follow previous rounds of layoffs across the country in recent months, the report said citing people familiar with matter. Every year the division reviews its employee ranks and culls underperformers. The private bank, which has around 12,000 people, continues to actively hire, the Journal reported.
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Toyota Motor Sales USA announced that it is expanding its recalls involving Takata front passenger air bag inflators. This expansion involves approximately 1.58 million additional vehicles in US.
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Facebook said its investigation has revealed no evidence of systematic political bias in the selection or prominence of stories included in the Trending Topics feature. Its data analysis indicated that conservative and liberal topics are approved as trending topics at virtually identical rates. It was also unable to substantiate any of the specific allegations of politically-motivated suppression of particular subjects or sources. In fact, the company confirmed that most of the subjects mentioned in media reports were included as trending topics on multiple occasions.
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Tuesday's Scheduled AGMs/EGMs
Royal Dutch Shell
Marshall Motor Holdings
Metro Bank
Card Factory
Ranger Direct Lending Fund
Accesso Technology Group
Epwin Group
Belgravium Technologies
GVC Holdings
Merchants Trust
Keller Group
Telit Communications
Quarto Group
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By Tom Waite; thomaslwaite@alliancenews.com; @thomaslwaite
Copyright 2016 Alliance News Limited. All Rights Reserved.
