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LONDON (Alliance News) - Home-improvement retailer Kingfisher dropped to the bottom of the FTSE 100 Thursday after the company recorded a marginal rise in sales for the 10 weeks to July 12.
The retailer said in a pre-close update for the second quarter that total group sales rose 0.8% during the period and that trading during the period was "always expected to be more difficult". It cited a very strong comparative second-quarter performance last year and noted that mild winter weather had boosted its first-quarter results.
It was disappointed by slower-than-expected growth in its French and Polish markets in the second quarter, notably in June, said the company.
"It is unclear whether this recent weakness is short term phasing in nature, though we will know more by our interims in September having then traded through our key summer months. In the meantime we are accelerating our self-help margin and cost initiatives to help support our second half performance," said Kingfisher CEO Ian Cheshire said.
The stock is down 8.1% at 308.80 pence per share in early afternoon trading, the biggest faller on the FTSE 100.
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MARKETS: Prior to the US equity market open, the DJIA and S&P 500 are called to open up 0.2%, while the NASDAQ Composite is called to open up 0.3%.
FTSE 100: up 0.1% at 6,805.99
FTSE 250: up 0.1% at 15,734.25
AIM ALL-SHARE: down 0.1% at 772.58
GBP-USD: down at 1.7008
EUR-USD: up at 1.3472
GOLD: down at USD1,298.50 an ounce
OIL (Brent): down at USD107.85 a barrel
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Other Top UK Corporate News
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International Consolidated Airlines Group SA, formed by the merger of British Airways and Spanish flag carrier Iberia Lineas Aereas de Espana SA, said Iberia and its trade unions have reached an agreement on collective redundancies for pilots and ground staff. In a statement IAG said that the agreement could lead to the reduction of up to 1,427 jobs at the airline. The company stated that agreement enables Iberia to continue with its transformation plan to introduce permanent structural changes across the airline and to facilitate profitable growth in the future. The company stated that the process will not affect Iberia's cabin crew staff.
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easyJet said revenue, passenger numbers and load factor increased in the third quarter as the low-cost airline benefited from the timing of Easter as well as good progress in its digital, brand and revenue initiatives. The FTSE 100-listed airline said total revenue for the third quarter to June 30 rose 8.6% to GBP1.24 billion from GBP1.14 billion last year. Passenger numbers in the period rose 9.4% to 17.9 million from 16.4 million in the comparable quarter in 2013 while load factor was up 2.2% to 90.4%, compared to the 88.2% reported last year.
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A new document posted in the investment banking section of Barclays' website has confirmed that the number of clients using its dark pool has declined since the New York Attorney General filed a lawsuit alleging that the bank gave an unfair advantage to high-frequency traders at the expense of its other investor clients, despite presenting the trading platform as having special safeguards to protect against "predatory" or "toxic" traders. According to the document, the LX alternative trading system continues to receive and execute client orders, and Barclays is "committed to operating an effective ATS for its clients".
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Standard Chartered dismissed media reports that succession planning is taking place as a result of investor pressure, as the board gave its backing to Chief Executive Peter Sands and Chairman John Peace. "The board wants to be absolutely clear that it is united in its support of both Peter Sands and Sir John Peace, and the management team, in delivering the refreshed strategy, restoring the bank to profitable growth and delivering returns for our shareholders," Standard Chartered said in a statement.
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Reed Elsevier maintained its outlook for the full-year, expecting to deliver another year of underlying revenue, profit and earnings growth in 2014 as it raised its dividend for the half year to end-June. Reed Elsevier proposed a dividend of 7.00 pence, up 5% from 6.65 pence. The professional information company posted a pretax profit, at constant currency and excluding acquisitions and disposals, of GBP791 million, up from GBP778 million, despite seeing revenue decline to GBP2.85 billion from GBP3.03 billion, as its operating margin improved to 30.2% from 28.8%. Reed Elsevier shares were top of the FTSE 100 Thursday morning.
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Retail property developer Hammerson reported an increase in profit for the first half, as it benefited from valuation gains on its portfolio. The company, which has assets in the UK and France, posted pretax profit of GBP362.9 million for the six months-ended June 30, up from GBP80.8 million a year earlier. Hammerson was boosted by a GBP224.5 million revaluation gain on property portfolio during the period after reporting a GBP20.0 million loss a year earlier.
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Carillion said its joint venture with Amey has been awarded three Next Generation Estate contracts worth up to GBP2.8 billion from the UK Ministry of Defence. These three contracts form the final part of the Defence Infrastructure Organisation's Next Generation Estate Contracts programme to maintain and upgrade defence infrastructure. Carillion said the joint venture has been awarded the Regional Prime Central contract worth around GBP435 million over the initial contract period of five years, which can be extended by a further five years, subject to approval.
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Close Brothers Group said it is confident of reporting strong full-year earnings, leaving its outlook unchanged as it said that both its banking loan book and asset management division's assets under management increased during the five months to the end of June. In a statement, the FTSE 250 merchant banking group said its banking loan book grew to GBP5.2 billion from GBP4.9 billion in the five months to the end of June, due to improved demand in property and motor finance. Close Brothers said the division wants to maintain lending standards, and reported a slight decline in the net interest margin in the period, offset by continued strong credit performance.
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Electrocomponents said it has seen a good sales performance in most of its markets in the first quarter to end-June, except the UK and France. Adjusting for trading days and foreign exchange movements, the company saw sales growth of 3% in the first quarter, with 4% growth in May and June. Its international business, which makes up 70% of total revenues, saw revenues up 5%, as the UK declined by 2%. Continental Europe was up 2%, impacted by a weaker market in France, North America was up 8% and the Asia Pacific region was up 8%.
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Tate & Lyle said trading in its first quarter was challenging and that operating profit for the period was below expectations as it felt the impact of the severe winter in the US and increased costs following an industrial accident at it Singapore facility. In an interim management statement, the sweeteners and starches company said that group adjusted operating profit came in below its expectations due to the anticipated impact of the "prolonged and severe" winter in the US and the adverse impact of the strength of sterling against the US dollar and other currencies.
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Howden Joinery Group saw its shares surge after reporting an increase in profit and revenue for the first half, as improved trading conditions seen since last summer continued. The kitchens and joinery products supplier posted pretax profit of GBP57.2 million for the six months ended June 14, up from GBP41.6 million a year earlier, as revenue rose to GBP435.4 million from GBP390.8 million a year earlier. Howden attributed its strong performance to a number of factors including improved market conditions and price increases implemented early in the year. In addition, it said sales from its French depots increased by more than 5% on constant currency terms.
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AIM MOVERS
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Oilex trades higher after the company said in an end-of-quarter report that its net oil production in the second quarter had more than doubled following lost-time injuries the previous quarter. Also up is Iomart Group; shares have risen after it confirmed it had rejected two approaches from Host Europe Holdings Ltd. Host Europe had said Thursday it had approached Iomart with a possible cash offer for 285 pence per share. Jarvis Securities is up; the company has reported an 11% increase in its interim pretax profit, boosted by a rise in client numbers.
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Top Economics And General
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US JOBLESS CLAIMS -19K TO 284K IN JUL 19 WK; 308K EXPECTED
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UK retail sales increased marginally in June as food sales recovered from the prior month, data from the Office for National Statistics showed. Retail sales including auto fuel rose 0.1% in June from May, when it dropped 0.5%. Sales were expected to grow by 0.3%. However, excluding auto fuel, sales were down by 0.1%. Economists had expected sales to rise 0.3% after falling 0.5% in May. Predominantly food store sales rose 0.3%, while non-food store sales fell 0.7% in June. On a yearly basis, growth in retail sales volume including auto fuel, slowed slightly to 3.6% from 3.7% in May. Excluding auto fuel, sales growth fell to 4% from 4.5%.
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The Eurozone private sector growth rebounded in July from a six-month low, flash survey data from Markit Economics showed. The flash composite output index rose to 54 in July from 52.8 in June. A reading above 50 indicates expansion in the sector. Economists had forecast the score to remain unchanged at 52.8. At 54.4, the services Purchasing Managers' Index climbed unexpectedly to a 38-month high, from 52.8 in June. It was forecast to fall to 52.7. The manufacturing PMI rose marginally to 51.9 from 51.8 in June, while it was expected to fall to 51.7.
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The EU is stronger today because of UK's contribution to it, European Central Bank's Jens Weidmann said in his speech at the annual dinner of the German-British Chamber of Industry & Commerce. "The European economy is more open and dynamic as a result of Britain's commitment to open and flexible markets - a position very much in tune with the Bundesbank's" he said. The EU, or EU, membership has also benefited Britain, he added.
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A report from UK telecoms regulator Ofcom shows that consumers consider the internet, and mobile phones to be "essential" to daily living. Ofcom's study examined which services consumers consider to be essential and whether or not they are affordable, particularly for "the most vulnerable in society" as part of on-going efforts to make sure consumers are getting value from their communication services. It found that 61% of consumers considered voice services, including mobile or landline, as essential, 59% considered mobile voice or text services essential, and 57% considered personal internet access essential.
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The European Court of Human Rights found Poland was complicit in the renditions by US intelligence services of two terrorist suspects to a secret prison in Poland, where they were tortured. Ruling on a complaint brought by two prisoners held at Guantanamo Bay detention camp, the court found Poland had "cooperated in the preparation and execution of the CIA rendition, secret detention and interrogation operations on its territory" a decade ago. The case was brought by Abd al-Rahim Hussayn Muhammad al-Nashiri, a Saudi Arabian national of Yemeni descent, and Zayn al-Abidin Muhammad Husayn, a Saudi Arabian-born Palestinian.
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Malaysia is to send two more forensic experts to the Netherlands with DNA samples from relatives of victims who died on flight MH17, a Health Ministry source said. "We really want to identify and bring back the bodies of Malaysian victims if possible before the end of Ramadan," said the source who asked not to be named.
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Air Algerie says it has lost contact with one of its aircraft after its take-off from Burkina Faso's capital of Ouagadaougou. The plane was on its way to Algeria, Algerian media quote the airline as saying. There are 110 passengers aboard the missing Algerian plane, Algerian newspaper Elnahar reports online. Most of the passengers are Algerian nationals, it says.
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The death toll in the Israeli military campaign in the Gaza Strip has reached 707 with more than 4,500 people wounded, the Health Ministry in Gaza said early Thursday. A top UN rights official warned Wednesday that both Israel and Gaza-based militants may be committing war crimes and called for greater protection for civilians caught in the conflict. An Israeli airstrike on a house in Jabalia refugee camp in northern Gaza killed a child a three elderly men early Thursday, Health Ministry spokesman Ashraf al-Qedra said.
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The Iraqi parliament is expected to vote for a new president on Thursday, a day after it adjourned polling on candidates and as an Islamist-led insurgency widens in the country. Speaker Salim al-Jabouri said there were 93 contenders for the post, after 20 were excluded for failing to meet constitutional requirements. Al-Jabouri, a Sunni politician, was elected speaker last week in a move seen as a first step in breaking the political deadlock over candidates for the country's top three positions. According to rules set after the US-led invasion in 2003, Iraq's leadership must include all three of the country's major demographic groups. The speaker has to be a Sunni Muslim, the prime minister a Shiite and the president Kurdish. The political wrangling comes as fighters of the Islamic State terrorist organization have seized large swathes of territory in Iraq's Sunni heartland in the north and west.
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Identification work has started on bodies from a plane crash on an island off Taiwan's west coast that killed 48 people, Taiwanese aviation authorities said. More than a dozen death certificates had been issued, said General Lee Wan-li, deputy head of the Civil Aviation Administration. Another 10 people were injured when TransAsia Airways flight GEUR222 crashed on Penghu Island on Wednesday while attempting an emergency landing.
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Afternoon Watchlist (all times British Summer Time)
14:45 US Markit Manufacturing PMI Preliminary
15:00 US New Home Sales
15:30 US EIA Natural Gas Storage
16:00 US Kansas Fed manufacturing activity
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Friday's Key UK Corporate Events
Vodafone Group Interim Management Statement
Aberforth Smaller Companies Trust Half Year Results
Alliance Trust Half Year Results
Baring Emerging Europe Interim Management Statement
Cable & Wireless Communications Interim Management Statement
Scottish American Investment Company Half Year Results
Anglo American Half Year Results
British Sky Broadcasting Group Full Year Results
Pearson Half Year Results
Spectris Half Year Results
United Utilities Interim Management Statement
African Barrick Gold Half Year Results
AG Barr Trading Update
IGas Full Year Results
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Friday's Key Economic Events (all times British Summer Time)
00:30 Japan National and Tokyo Consumer Price Index
00:50 Japan Corporate Service Price
00:50 Japan Foreign stock and bond investment
07:00 Germany Gfk Consumer Confidence Survey
09:00 Germany IFO - Business Climate
09:00 EU M3 Money Supply and Private Loans
09:30 UK Gross Domestic Product and Index of Services
13:30 US Durable Goods Orders
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