LONDON (Alliance News) - The following is a summary of top news stories Thursday.
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COMPANIES
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Electronics retailer Dixons Retail PLC and mobile phone retailer Carphone Warehouse Group PLC said they have agreed to merge in a GBP3.6 billion deal that will create the UK's biggest retailer of mobile phones and electrical goods. In a statement, the two companies said the shareholders of both companies will have equal shares in the new company, which will be called Dixons Carphone PLC. Carphone Warehouse Chairman Charles Dunstone will become the chairman of combined company, while Dixons Chief Executive Sebastian James will become CEO. Carphone Warehouse Chief Executive Andrew Harrison will become deputy CEO. However, the equality of the deal - both companies have market capitalisations of about GBP1.8 billion - has led analysts to question who will take the driving seat in the integration process. The two companies had said they were in merger talks back in February, less than a year after Carphone Warehouse extricated itself from a failed joint venture with Best Buy of the US.
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AstraZeneca PLC said that it will be presenting over 40 scientific abstracts to "demonstrate the rapid progression of its oncology pipeline" at the 50th Annual Meeting of the American Society of Clinical Ongology at the end of May. It will present data from its Phase I trial for MEDI4736, its Phase I study of AZD9291, and data from a randomised Phase II study investigation a combination of olaparid and cediranib in serous ovarian cancer, amongst others. AstraZeneca said that its biologics research and development arm MedImmune was building a "comprehensive" immuno-onology programme, with MEDI4736 as one of its leading late stage assets.
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Kier Group PLC saw its shares rise after it said its construction business was seeing more opportunities in the UK and overseas, its property unit had maintained its pipeline and won new contracts, and the business as a whole was "on course" in its current financial year. In a statement, the company said its construction business was experiencing more opportunities as the market recovered in the UK. It said it was still being selective about bidding for contracts, but had won more than GBP500 million of new contracts so far in 2014. Operating margin in the UK business remains around 2%, it said.
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Vedanta Resources PLC said its pretax profit fell in its full year as higher costs at its subsidiary Sesa Sterlite and a drop in revenues due to lower commodity prices, increased payments to the government of India, and lower production from its Konkola Copper Mine and Zinc International operations hit the company. The India focused-oil and metals company said its pretax profit fell 35% to USD1.12 billion for the twelve months ended March 31 from USD1.72 billion the previous year, as revenues fell 12% to USD12.95 billion from USD14.64 billion. The company said its revenues fell due to weaker global commodity and oil prices along with an increased rate in the share of its petroleum profits having to be provided to the government of India.
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London Stock Exchange Group PLC said its full-year revenue rose by 50% as it continued its diversification strategy, but it said pretax profit fell due to higher operating expenses after the acquisition of clearing house LCH.Clearnet last year, for which it unveiled more ambitious cost-savings targets. In a statement, the London Stock Exchange said revenue increased to GBP1.09 billion in the year ended March 31, compared with GBP726.4 million a year earlier, driven by capital markets contributions from LCH.Clearnet. The stock exchange has been riding the UK economic recovery, which has prompted the return of investors to its equity markets. The group said it helped companies raise over GBP34 billion in new and further equity issues across its markets.
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Tullow Oil PLC said its Ekunyuk-1 well and Twiga-2 wells have encountered further oil-bearing regions in Northern Kenya. The FTSE 100 oil and gas exploration company said it was informed by Africa Oil, its partner in the Kenyan Blocks 10BB and 13T, that the Twiga-2 appraisal well encountered an 18 metre region of limited reservoir quality net oil pay after drilling. The company said a sidetrack well was then set up on the well to explore an area north of its previous Twiga-1 discovery, which has found a 62 metre space of high quality net oil pay in the Auwerwer formation, similar to the Twiga-1 find.
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Centamin PLC said its pretax profit dropped by 70% in its first quarter as a slump in production and lower gold prices hit its revenues, while its cost of sales increased as on-going disputes with the Egyptian government over fuel costs continue. Despite its recent difficulties, the FTSE 250 miner reaffirmed its production forecast for the full year ahead. Centamin said its pretax profit fell 71% to USD20.6 million for the three months ended March 31 from USD71.9 million the previous year as revenues dropped 26% to USD102.7 million from USD138.2 million. The company said its revenues fell as production dropped and the average realised sales price for its gold fell to USD1,298 per ounce from USD1,604 the previous year, after the market gold price fell in 2013.
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Aviva PLC reported an increase in its main measure of sales profitability, as growing European and Asian operations offset a 22% decline in the UK, where the government has initiated a shake-up of the pensions industry. Aviva said value of new business increased to GBP224.0 million in the three months ended March 31. In the UK, where Aviva is a big player in the life insurance industry, value of new business fell to GBP89.0 million from GBP114.0 million. That drop was more than offset by performance in France, Poland, Italy and Spain. Aviva said the decline in the UK was largely due to value of new annuity business falling by 43% to GBP40.0 million. Aviva said it expects to increase its focus on bulk purchase annuity transactions to partially offset the decline in individual annuity sales resulting from the government proposals.
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Old Mutual PLC said its first-quarter gross sales increased by 12%, driven by its wealth arm more than offsetting currency woes for its emerging markets operations, while commenting that its wealth arm could benefit from recent pensions changes in the UK. Old Mutual, which operates across investments, savings, insurance and banking, said gross sales increased to GBP6.25 billion in the three months ended March 31, compared with GBP5.60 billion a year earlier. Old Mutual's wealth arm made up GBP3.95 billion of the sales, while its emerging markets business, which has operations across Africa, Asia and Latin America, suffered an 8.4% fall to GBP2.30 billion due to currency movements against sterling.
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National Grid PLC said pretax profit increased in its recent full year as new price control systems in the UK and operational improvements in the US led to an increase in revenues, and it announced that its UK Executive Director Nick Winser will be stepping down at its upcoming annual general meeting. The company, which owns the electricity transmission system in England and Wales, said its pretax profit increased 1.5% to GBP2.75 billion for the twelve months ended March 31. The company said its results improved after setting up new price control mechanisms in the UK and consolidating a range of operational improvements in its US operations despite difficult weather conditions during the period.
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UK travel operator Thomas Cook Group PLC said it narrowed its losses in the first half of the year and again increased its targets for its cost-cutting and profit-improvement programme, as the travel firm continued its turnaround plan aimed at operating a much-leaner business. For the six months ended March 31, the group reported a pretax loss of GBP366 million, compared with a loss of GBP394 million the prior year, despite the late timing of the key Easter trading period, which this year fell in the second half of the year, as it continued to strip out costs from the business. Thomas Cook said the late timing of Easter resulted in a loss of GBP40 million in revenues and GBP15 million in earnings before interest and taxes.
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TalkTalk Telecom Group PLC raised its dividend and outlined its expectations for the financial year 2015, as pretax profit was hit by investments and it continued its 'Making TalkTalk Simpler' restructuring programme in the year to end-March 2014. The triple-play telecommunications company posted a total dividend of 12.0 pence, up from 10.4 pence in the previous year. TalkTalk expects to grow its dividend by no less than 15% in the financial year 2015.
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MARKETS
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Stock indices across the UK and Europe are broadly softer after European economic data highlighted the problem of Eurozone constituent economies operating at different speeds, while average price growth across the region remains subdued.
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FTSE 100: down 0.04% at 6875.73
FTSE 250: down 0.7% at 15867.29
AIM ALL-SHARE: up 0.1% at 808.6
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The euro is down after data showed the Eurozone economy has expanded less than expected. The pound has softened following the Bank of England's intention, stated on Wednesday, to keep interest rates at its current level
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GBP-USD: down at USD1.6754
EUR-USD: down at USD1.3655
GOLD: down at USD1303.80 per ounce
OIL (Brent): down at USD109.18 a barrel
(changes since end of previous GMT day)
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ECONOMICS AND GENERAL
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The eurozone's economy expanded less than expected in the first three months of 2014, posting a growth rate of only 0.2%, data released showed. Analysts had forecast quarter-on-quarter growth of 0.4%, amid hopes that the currency bloc is finally recovering from a debilitating economic crisis. But growth rates in the eurozone's biggest economies remain sluggish. Powerhouse Germany saw its economy expand by 0.8% in the first quarter, but France's stagnated and Italy's shrunk by 0.1%, according to the new data by EU statistics agency Eurostat.
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Germany's economic growth accelerated more than expected in the first quarter, preliminary figures showed. The quarterly growth in gross domestic product doubled to 0.8% in the first quarter from 0.4% in the previous quarter, Destatis said. GDP was forecast to grow 0.7%. Destatis, however, said the factor that contributed to the strong growth at the beginning of the year was the extremely mild weather.
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The French economy remained flat in the first quarter after recovering at the end of 2013, data from the statistical office Insee showed. Gross domestic product showed nil growth from the prior quarter, while it was forecast to rise 0.1%. That follows a 0.2% expansion in the fourth quarter of 2013.
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The Japanese economy grew at an annual 5.9% in the January-to-March period thanks to last-minute purchases before the sales tax increase in April, the government said. The reading on gross domestic product was above the 4.3% growth predicted in a poll of economists by the Nikkei business daily. Consumer spending, which accounts for about 60% of gross domestic product, rose 2.1% quarter-on-quarter before the government raised the nation's sales tax in April to 8% from 5% - the first hike in 17 years.
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Anti-government protesters disrupted political talks at an air force base, after three people were killed in attacks on protest camps in Bangkok, reports said. Thousands of protesters broke into the Royal Thai Air Force Academy, despite riot police guarding the compound, Blue Sky TV reported. he station reported that the protesters forced the departure of Election Commission officials and caretaker Prime Minister Niwattumrong Boonsongpaisan, who had been scheduled to discuss the date for a fresh election.
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EU and US negotiators are to meet for a fifth time starting Monday in Washington in their efforts to create the world's largest free trade area. But questions from civil society and even some European governments about the proposed Transatlantic Trade and Investment Partnership have slowed things down. Just days before the next round of talks were to start, the EU Commission on Tuesday held a rare meeting with stakeholders, live-streamed on the internet, to explain one of the more controversial issues involving protection of foreign investors.
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The number of people killed in what could be Turkey's worst mining disaster rose to over 280, the government was reported as saying. No miners were found alive in the previous 12 hours as more bodies were recovered, said Energy Minister Taner Yildiz, according to the Anadolu news agency.
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A spate of wildfires in southern California burned at least 30 homes and forced the evacuation of the San Onofre nuclear power plant, authorities said Wednesday. The Los Angeles Times reported that non-essential employees were evacuated from the nuclear facility south of Los Angeles due to a nearby brush fire, but that there was no danger to the plant itself. The destroyed homes were in the community of Carlsbad, an affluent coastal town just north of San Diego, where more than 15,000 people were forced to evacuate.
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2 Sep 2014 10:18
