LONDON (Alliance News) - The following is a summary of top news stories Thursday.
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COMPANIES
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AstraZeneca raised its guidance for the full year 2014 for the second time this year, as it saw revenue rise in the nine months to end-September at constant currency, although it expects the strengthening dollar to hit core earnings per share by around 5%. The pharmaceutical company said its growth drivers offset the hit from generic competition, and its acquisition of Bristol-Myers Squibb Co's share in their diabetes joint venture helped bolster revenue, although this also led to exceptional costs which hit its pretax profit. The company also announced Thursday that it has agreed to sell its Myalept orphan product for the treatment of leptin deficiency in patients with generalised lipodystrophy to Aegerion Pharmaceuticals Inc for USD325 million upfront. It expects to complete this transaction in January 2015, and does not involve the transfer of any AstraZeneca employees or facilities.
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WM Morrison Supermarkets said it was making progress in its three-year turnaround plan, cutting long-term prices and focusing less on promotions, and it narrowed its full-year profit guidance range as third quarter sales continued to slide, albeit at a slower pace. The UK grocer said it was continuing to invest in price cuts, as total store sales excluding fuel and sales tax fell 3.6% from a year earlier. In stores open longer than a year, third-quarter sales fell 6.3% following a 7.6% drop in the second quarter and 7.1% in the first. Analysts had forecast a drop of around 6%.
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RSA Insurance Group reported a fall in premiums as a result of weak insurance market conditions and the group's restructuring plan being led by Chief Executive Stephen Hester. In a statement, RSA said net written premiums fell to GBP5.68 billion in the first nine months of the year, compared with GBP6.74 billion in the corresponding period last year.
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Coca-Cola HBC reported a drop in third-quarter revenue as poor weather in its markets hit volumes, and it warned that it expects tough market conditions for the rest of the year. Revenue in the three months to September 26 fell 5.3% to EUR1.82 billion, from EUR1.92 billion, on a drop in volume to 547 million cases. Comparable earnings before interest and taxes fell 3.1% to EUR200.9 million though its margin improved slightly to 11.1% from 10.8%.
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Schroders reported a rise in assets under management over the course of the third quarter, citing GBP2.2 billion of net inflows and GBP2.5 billion of investment returns, foreign exchange and other factors. In a statement, the FTSE 100 asset manager said its assets under management rose to GBP276.2 billion at the end of September from GBP271.5 billion at the end of June. Schroders said it made a GBP130.3 million pretax profit in the third quarter, compared with GBP106.2 million in the corresponding period last year.
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Randgold Resources said earnings rose in the third quarter as a production increase driven by the ramp-up of the Kibali mine more than offset a currency hit, and it said it was on track to produce more than a million ounces of gold in 2014. In a statement, the gold producer said third quarter earnings per share rose 11% compared with the second quarter, to USD0.63, while its profit from mining rose 6% on the quarter to USD172.6 million.
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Information services company Experian reported a rise in first-half pretax profit, citing strength in North America Credit Services, a return to growth in Brazil and a good all-round performance in the UK. In a statement, Experian, which provides services such as helping to manage credit risk and prevent fraud, said it made a USD534 million pretax profit in the six months ended September 30, compared with USD480 million in the corresponding period last year. The group increased its first interim dividend by 7% to 12.25 US cents per share, citing strong cash performance.
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EasyJet said passenger numbers rose 5.5% on the year to 5.8 million in October, and its load factor rose to 90.9%, from 89.1%. It said passenger numbers were up 6.6% to 65.1 million in the 12 months to the end of October, compared with the previous 12 months when it flew 61.0 million. Load factor for the 12 month period rose to 90.7%, from 89.4%.
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Vodafone Group is understood to be considering buying a stake in Metroweb SpA in order to better compete with Telecom Italia SpA in the Italian market, Bloomberg reported. Vodafone could buy the stake from investor F2i SGR SpA, which owns 54% of the fibre-optic operator, Bloomberg said, citing three people familiar with the matter.
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Cruise company Carnival said it would increase fleet capacity by nearly 10% from 2014 through 2016, fuelled largely by the addition of four new ships across four brands in less than 18 months.
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Cable & Wireless Communications announced a placing of new shares representing up to 9.99% of its existing share capital to help fund the acquisition of Columbus International Inc for USD1.85 billion, while posting a rise in pre-tax profit for the half year to end-September. Columbus is a privately-owned telecommunications and technology services company based in Barbados. The company will fund the acquisition via the payment of USD707.5 million in cash and issue of 1.56 billion new shares in the company to some Columbus shareholders. The placing of 252.8 million new shares will part fund the cash element, with new debt financing being used for the remainder.
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UBM announced a GBP565 million rights issue to help pay for its GBP608 million acquisition of Advanstar Communications, saying it will offer four new shares at 287 pence for every five existing shares. UBM said the rights issue will result in 196.7 million new shares being issued, about 80% of its existing share capital.
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Tate & Lyle posted a big fall in pretax profit for the first half, hit by falling sales across the business which were impacted by supply chain issues and the strength of sterling. The sugar producer said pretax profit for the first half to the end of September was down to GBP104 million from GBP173 million a year earlier, down 40% on a reported basis and down 34% in constant currencies. The group hiked its interim dividend despite the profit fall, up to 8.2 pence per share from 7.8 pence a year ago.
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Spire Healthcare Group said it expects to see revenue for the full year between GBP825 million to GBP840 million as it has traded in line with expectations, and announced that it had agreed a contract renewal with healthcare provide Bupa UK. The independent hospital group said that its Private Medical Insurer business has seen stable volumes with a marginal increase in revenue per case for the period from the start of July to end-October.
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Sweett Group lost more than a quarter of its value after it issued a profit warning, saying it had "identified challenges" in some of its overseas operations. The construction and property consultancy said its UK operations continued to recover in the first half of its financial year, but it said trading in Hong Kong had been disappointing and it is set to writedown the value of its Australian business in its full-year results unless there's a significant improvement in trading in the second half. Sweett also said it will book charges to cover the costs of its investigation into allegations of deception reported by the Wall Street Journal last year, as it continues to cooperate with a UK Serious Fraud Office probe into the allegations.
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Dairy Crest Group saw its shares rise strongly after it agreed a deal to sell its dairy operations for GBP80 million in cash, leaving it focused on its spreads and cheeses such as Cathedral City and Country Life as well as whey products for infant formula. The company has been moving away from unbranded commodity products for several years, scaling back the dairy operations and selling its commodity cheese operations. Its branded cheese and spread operations are more profitable, and Dairy Crest said it will also continue to grow its whey-based products, such as demineralised whey powder and galacto-oligosaccharide, for the infant formula market.
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Hikma Pharmaceuticals raised its 2014 group revenue guidance to around 7% growth, and said it was working with the US Food and Drug Administration to resolve "all outstanding" issues with its Portugal manufacturing facility "as quickly as possible". The company had previously guided around 5% group revenue growth for 2014.
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Fidessa Group said it has returned to underlying growth but warned that it expects the "exceptional" strength of sterling during the year to more than offset that and affect reported numbers. In a statement, the financial trading software and services provider said it has continued to see improvement across the markets in which it operates.
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Bikes to car parts retailer Halfords Group reported higher profits for the first half of its financial year, driven by sales of cycles and growth in online sales, but its gross margin declined and it raised its cost estimate for the retail business for the full year. The company reported a pretax profit of GBP49.4 million for the 26 weeks to September 26, up from GBP44.6 million a year earlier, as revenue rose to GBP524.1 million from GBP490.6 million. Like-for-like revenue rose 6.8% in its retail business and 4.4% in its autocentres, which undertake car maintenance.
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MARKETS
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UK shares are lacking support, as investors avoid risk ahead of the European Central Bank monetary policy decision at 1330 GMT and as corporate earnings take the spotlight in the meantime. The Bank of England's interest rate decision is due at 1200 GMT.
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FTSE 100: down 0.2% at 6,523.68
FTSE 250: down 0.3% at 15,475.39
AIM ALL-SHARE: down 0.2% at 715.14
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GBP-USD: down at USD1.5945
EUR-USD: up at USD1.2519
GOLD: up at USD1,144.95 per ounce
OIL (Brent): down at USD82.90 a barrel
(changes since end of previous GMT day)
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ECONOMICS AND GENERAL
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UK industrial production growth exceeded expectations in September, data showed. Industrial output grew 0.6% in September from August, when it was down by 0.1%, the Office for National Statistics reported. Production was forecast to grow only 0.4%. Manufacturing output advanced at a pace of 0.4% after rising 0.2% a month ago. It was slightly faster than an expected 0.3% increase. On a yearly basis, industrial production growth slowed to 1.5% from 2.2% in August. Likewise, manufacturing growth eased to 2.9% from 4% a month ago. Industrial output was expected to rise by 1.6% and manufacturing to grow 2.8%.
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House prices in the UK rose at a slower-than-expected annual rate in October, figures from the Lloyds Banking Group unit Halifax showed. The house price index rose 8.8% year-on-year following 9.6% gain in September. Economists had expected a 9.1% increase. House price inflation eased for a third straight month after peaking at 10.2% in July.
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A full competition investigation into the personal current account and small- and medium-sized enterprise retail banking sectors was Thursday launched by the Competition and Markets Authority, the UK's main competition and consumer authority. The move to launch an inquiry follows a consulting period on the CMA's provisional decision in July that there should be a market investigation into the markets for personal current accounts and SME banking.
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US-led coalition forces struck the base of a hardline Islamist group in northern Syria, a monitoring group said, in what appears to be the first raid on rebels not directly linked to either the Islamic State or al-Qaeda. The base struck belonged to the Ahrar al-Sham rebel group in Basiqa, near the key Bab al-Hawa border crossing with Turkey, said the Syrian Observatory for Human Rights.
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Members of the Bank of Japan's monetary policy board said the pace of the country's economic recovery was satisfactory, minutes from the board's meeting on October 6 and 7 revealed. The biggest downside risk to the economy includes commodity-exporting economies, the European debt problem and the race of recovery in the US, the minutes showed. "Japan's economy is expected to continue its moderate recovery trend, and the effects including those of the subsequent decline in demand following the front-loaded increase prior to the consumption tax hike are expected to wane gradually," the minutes said.
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13 May 2016 16:04
