Centrica Share News (CNA)

LONDON (Alliance News) - While the UK political elite dissects the results of Thursday's local elections, which will emerge throughout the day Friday, the London financial markets mostly are looking for direction from US jobs data due in the afternoon.

On a lighter day of company reporting, Interserve was the biggest early mover, down 28% in the FTSE 250 after issuing a warning about trading in its UK construction division and about its debt pile.

Here is what you need to know at the London market open:
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MARKETS
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FTSE 100: down 0.7% at 6,074.32
FTSE 250: down 0.4% at 16,590.79
AIM ALL-SHARE: flat at 722.58
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Hang Seng: down 1.7% at 20,102.68
Nikkei 225: closed down 0.3% at 16,106.72
DJIA: closed up 0.1% at 17,660.71
S&P 500: closed flat at 2,050.63
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GBP: soft at USD1.4472 (USD1.4487)
EUR: flat at USD1.1414 (USD1.1406)

GOLD: firm at USD1,278.49 per ounce (USD1,276.39)
OIL (Brent): down at USD44.71 a barrel (USD45.72)

(changes since previous London equities close)
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ECONOMICS AND GENERAL
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Friday's Key Economic Events still to come
(all times in BST)

13:30 US nonfarm payrolls, unemployment rate and average earnings
13:30 Canada unemployment rate
15:00 Canada Ivey purchasing managers index
18:00 US Baker Hughes US oil rig count
20:00 US consumer credit
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A long night of counting has begun after the 'Super Thursday' polls with Labour braced for a difficult night. The elections are the first national verdict on Jeremy Corbyn's leadership and a Twitter poll in the Scottish Sun suggests things may not go all his way. The poll puts the Tories in second place in the Scottish Parliament election, ahead of Labour and behind the SNP.
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Brexit would make the UK "less attractive" to Japanese investors, the country's premier Shinzo Abe has warned in Downing Street. In another major international intervention in the referendum campaign, Abe stressed that Japanese firms viewed the UK as a "gateway" to Europe. Abe said that a Leave vote "would make the UK less attractive as a destination for Japanese investment," at a joint press conference in Number 10 with Prime Minister David Cameron. The Japanese premier also stressed that Tokyo is more interested in doing a trade deal with the EU as a block, rather than "individual states" in Europe.
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The US Food & Drug Administration announced it will start regulating all tobacco products, including e-cigarettes, cigars, hookah tobacco and pipe tobacco, just like it regulates cigarettes. Under the new rules, e-cigarettes manufacturers should receive marketing authorization from the FDA, sales to people under the age of 18 years is prohibited, selling of covered tobacco products in vending machines and distribution of free samples also is not allowed.
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A wildfire in the western Canadian province of Alberta spread to an area as large as the city of Chicago, destroying whole neighbourhoods as more than a 1,000 firefighters fought to control it, officials said. An estimated 88,000 people have been evacuated and many fear there may be nothing left of their homes after the flames are extinguished. "Homes have been destroyed. Neighborhoods have gone up in flames," Prime Minister Justin Trudeau said in Parliament Thursday, calling the evacuation the largest caused by fire in Alberta's history. Alberta's prime minister said the Fort McMurray fire, which burned for the third day on Thursday in Canada's oil sands heartland, is by far the largest, but there are 49 wildfires burning in the province of Alberta and seven of them were out of control.
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Japan's service sector activity deteriorated for the first time in over a year in April, results of a survey by Markit Economics showed. The services purchasing managers' index, or PMI, fell to 49.3 in April from 50.0 in the previous month. Any reading below 50 indicates contraction, while a reading above 50 suggests expansion in the sector. The composite index, which combines scores from the manufacturing and services indexes, dropped further to 48.9 in April from 49.9 in March. Moreover, the latest reading was the lowest in two years.
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BROKER RATING CHANGES
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CITIGROUP CUTS CENTRICA TO 'NEUTRAL' ('BUY') - TARGET 226 (235) PENCE
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TRADERS: LIBERUM INITIATES SHIRE WITH 'BUY' - TARGET 4700 PENCE
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CITIGROUP CUTS MAN GROUP TO 'SELL' ('BUY')
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TRADERS: LIBERUM INITIATES SPEEDY HIRE WITH 'BUY'
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COMPANIES - FTSE 100
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InterContinental Hotels Group said revenue per available room fell in the first quarter of 2016, although it would have grown on a constant currency basis. The hotel company said group RevPAR slipped by 0.7% in the first quarter year-on-year due to the strengthening of the dollar. On a constant currency basis, however, this grew by 1.5%, driven by a 1.0% increase in room rates and 0.3 percentage point rise in room occupancy.
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easyJet reported growth in passenger numbers in April year-on-year, but a decline in load factor. The low-cost airline said it carried 6.1% more passengers in April 2016 than in April 2015, to 6.4 million from 6.0 million. Its load factor slipped by 0.4 percentage point to 90.4% from 90.8%.
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Miner Rio Tinto said it and its partners have approved the development plans for the Oyu Tolgoi underground copper and gold mine in Mongolia. Rio said the development of the mine will start in mid-2016 following the approval by the London-listed group and its partners, the Mongolian government and Turquoise Hill Resources. The approval covers the USD5.3 billion investment the partners will make in the project and comes after all necessary permits to start work were received. First production from the underground mine is expected to start in 2020, Rio said.
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Anglo-Australian miner BHP Billiton said Brazil's Federal Court of Appeal has ratified the settlement agreement it reached in March over the Samarco dam disaster. On November 5, a tailings dam at the Samarco project in Brazil burst and flooded the local community, leading to at least 17 fatalities. Samarco is a joint venture between BHP and ValeA, the Brazilian miner. The pair reached an agreement in March which will cover a total settlement of BRL9.20 billion, or around USD2.30 billion, over 15 years covering the restoration of the environment and communities effected by the dam disaster.
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COMPANIES - FTSE 250
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Interserve said its expectations for its UK construction division have been hit "significantly" by a further deterioration in its contract in Glasgow, and said it now expects net debt to come in GBP35.0 million higher than previously guided. The support service and construction company said it expects further cost overruns and delays in relation to its energy from waste contract in Glasgow, following issues relating to the design, procurement and installation of the gasification plant, together with continuing challenges with the supply chain.
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Aviation services company BBA Aviation said trading in the first quarter of 2016 met its expectations, though organic revenue fell on tough market conditions. BBA said revenue for the three months to the end of March grew 12% year-on-year, though revenue in constant currencies and on a like-for-like basis, stripping out acquisitions, fell 6.0%. Organic revenue for BBA's Signature Flight Support business grew 1.8% in the quarter, despite an unusually mild winter season which hit de-icing revenue and traffic in some locations. The group said the acquisition of US rival Landmark Aviation, completed in February, is ahead of plan, and BBA remains confident on meeting its target for at least USD35.0 million in annual synergies.
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Interdealer broker Tullett Prebon said Andrew Baddeley has been appointed as its new chief financial officer. He will take over from Paul Mainwaring, who will stand down after nearly a decade as Tullett's group finance director. Baddeley is the former chief financial officer of Brit Insurance, the Lloyd's of London-based insurer, and was finance director at Atrium, another Lloyd's insurer, prior to this.
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COMPANIES - LONDON MAIN MARKET AND AIM
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Irish corrugated packaging company Smurfit Kappa Group said pretax profit grew 31% in the first quarter year-on-year as revenue rose on volume growth. The Dublin-based group - which recently transferred its primary listing to London, making it a likely addition to the FTSE 100 at the next quarterly index review - said pretax profit for the quarter to the end of March was EUR128.0 million, up from EUR98.0 million a year earlier. Revenue grew 2.0% in the quarter, up to EUR2.00 billion from EUR1.96 billion, as group packaging volume growth hit 5.0% in the quarter.
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Building services company T Clarke said trading in the year to date has been in line with its expectations, and said its forward order book remains strong due to its targeted tender process across its regional businesses. T Clarke said revenue in the period from January 1 to April was GBP78.0 million, up from GBP72.0 million for the same period a year earlier, and noted the trading environment continues to improve.
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Investment bank and stockbroker Numis Corp said its pretax profit and revenue surged in the first half of its financial year and said it has appointed two co-chief executives to take over from its founder. Numis said Oliver Hemsley will step down as chief executive in autumn this year. He will be succeeded by Alex Ham and Ross Mitchinson, who will become joint-chief executives. The change at the top came as Numis reported pretax profit for the half year to the end of March grew 41% to GBP16.8 million from GBP11.9 million a year earlier. Revenue for the half rose to GBP56.8 million from GBP45.7 million, the highest interim amount in the company's history, Numis said.
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COMPANIES - INTERNATIONAL
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Steel giant ArcelorMittal reported that its net loss for the first-quarter of 2016 narrowed to USD416 million or USD0.23 per share from USD728 million or USD0.41 per share in the first-quarter of 2015. But adjusted net loss widened to USD176 million from USD36 million in the prior year. Lakshmi Mittal, ArcelorMittal chairman and CEO, said: "Our results for the first quarter reflect the very tough operating conditions in the second half of 2015. Since that time we have seen a recovery in spreads in our core markets to more sustainable levels, which is expected to result in improved results in the coming quarters. This is a welcome development, although given the levels of excess capacity in China the market remains fragile and we must continue to be vigilant and active against the threat of unfair trade."
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Macquarie Group reports a net profit after tax attributable to ordinary shareholders of AUD2.063 billion for the full year ended 31 March 2016, up 29% on the full year ended 31 March 2015. Net operating income was USDA10.135 billion up nine per cent, while total operating expenses were AUD7.120 billion up 6% on the prior year.
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Goldman Sachs Group is eliminating additional staff from its sales and trading division, the Wall Street Journal reported citing people familiar with the matter. The latest cuts, which affected about 100 people this week, signal that difficult conditions that weighed on Goldman's results during the first few months of 2016 may not have changed significantly in the second quarter.
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Apple and SAP announced a partnership to revolutionize the mobile work experience for enterprise customers, combining native apps for iPhone and iPad with the capabilities of the SAP HANA platform. The joint effort will deliver a new iOS software development kit or SDK and training academy so that developers, partners and customers can build native iOS apps tailored to their business needs. "This partnership will transform how iPhone and iPad are used in enterprise by bringing together the innovation and security of iOS with SAP's deep expertise in business software," said Tim Cook, Apple's CEO.
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Google and Honeywell announced they have reached a long-term patent cross-license agreement, which fully resolves pending patent litigation between Honeywell and Nest Labs. Terms of the agreement weren't released. The companies said they believe that this patent accord promotes product innovation and consumer choice in the market for smart home products.
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News Corp announced earnings for third quarter that lost ground from last year. The company said its profit declined to USD25 million, or USD0.04 per share. This was lower than USD50 million, or USD0.09 per share, in last year's third quarter. The company said revenue for the quarter fell 7.4% to USD1.89 billion. This was down from USD2.04 billion last year.
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Friday's Scheduled AGMs/EGMs

BBA Aviation
Clarkson
Starwood European Real Estate Finance
Smurfitt Kappa
BrainJuicer Group
T Clarke
InterContinental Hotels Group
Man Group
Morgan Advanced Materials
RSA Insurance Group
Target Healthcare REIT (re share placing)
Alliance Trust
Capital & Counties Properties
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By Tom Waite; thomaslwaite@alliancenews.com; @thomaslwaite

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