Findel Share News (FDL)

LONDON (Alliance News) - Shares have opened higher in London Thursday, after the US Federal Reserve refused to commit to a September rate hike and on another busy day in the UK corporate calendar.

The Federal Reserve noted the strengthening US economy while leaving its benchmark interest rate unchanged Wednesday, setting the stage for a possible tightening of monetary policy in late 2015.

On the peak day in the UK interim earnings season, Rolls-Royce, RBS and Royal Dutch Shell lead FTSE 100 gainers, after well-received updates, while Babcock International and BT lead fallers.

Here is what you need to know at the London market open:
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MARKETS
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FTSE 100: up 0.5% at 6,664.25
FTSE 250: up 0.6% at 17,624.21
AIM ALL-SHARE: flat at 749.37
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Hang Seng: flat at 24,608.64
Nikkei 225: closed up 1.1% at 20,522.83
DJIA: closed up 0.7% at 17,751.39
S&P 500: closed up 0.7% at 2,108.57
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GBP: flat at USD1.5602
EUR: down at USD1.0954

GOLD: down at USD1,086.30 per ounce
OIL (Brent): up at USD53.61 a barrel

(changes since end of previous GMT day)
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ECONOMICS AND GENERAL
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Thursday's Key Economic Events still to come
(all times in BST)

08:55 Germany Unemployment Rate
09:00 EU Economic Bulletin
10:00 EU Economic Sentiment, Business Climate, Consumer Confidence
13:00 Germany Consumer Price Index
13:30 US Gross Domestic Product preliminary
13:30 US Personal Consumption
13:30 US Initial and Continuing Jobless Claims
15:30 US EIA Natural Gas Storage change
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The Federal Reserve noted the strengthening US economy while leaving its benchmark interest rate unchanged, setting the stage for a possible tightening of monetary policy in late 2015. "The labour market continued to improve with solid job gains and declining unemployment," the US central bank said after a two-day meeting of its monetary policy committee. The Fed left its benchmark interest rate at the unprecedented near-zero range in place since December 2008. Most Wall Street economists expect the Fed to begin tightening monetary policy at one of its next meetings - on September 17 or October 28. The Fed on Wednesday said it "anticipates that it will be appropriate to raise the target range for the federal funds rate when it has seen some further improvement in the labour market and is reasonably confident that inflation will move back to its 2% objective over the medium term," repeating its past statements nearly word-for-word.
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Industrial output in Japan added a seasonally adjusted 0.8% on month in June, the Ministry of Economy, Trade and Industry said. That beat expectations for an increase of 0.3% following the 2.1% contraction in May. On a yearly basis, industrial output advanced 2.0% - also exceeding expectations for a gain of 1.3% following the 3.9% contraction in the previous month.
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Brazil's central bank lifted its key interest rate by 50 basis points despite seeing signs of recession in the economy. The Selic rate was raised to 14.25% from 13.75%.
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Malaysia Airlines said it was too early to tell whether a piece of plane debris found on an island off the eastern coast of Africa came from missing flight MH370. Beijing-bound flight MH370, with 239 people aboard, disappeared on March 8, 2014, about an hour after it took off from Kuala Lumpur International Airport. "With regards to the reports of the discovery of an aircraft flaperon at Reunion Island, Malaysia Airlines is working with the relevant authorities to confirm the matter," Malaysia Airlines said in a statement. The wreckage was washed up in Reunion Island, a French territory east of Madagascar.
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BROKER RATING CHANGES
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UBS RAISES GKN TO 'BUY' ('NEUTRAL') - TARGET 360 (370) PENCE
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BERENBERG CUTS ST JAMES'S PLACE TO 'HOLD' ('BUY') - TARGET 950 PENCE
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COMPANIES - FTSE 100
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Royal Dutch Shell reported a USD1.7 billion drop in earnings in the second quarter of 2015, as its upstream division continued to be hampered by lower oil prices, compounded by a fall in production. The oil and gas company also reaffirmed its commitment to its dividend alongside a share buyback as its merger with BG Group continues as planned. Shell reported current cost of supply earnings of USD3.4 billion in the second quarter of 2015, down from USD5.1 billion a year before, as revenue fell to USD73.95 billion from USD115.27 billion after being hit by lower oil prices. Shell will pay an interim dividend for the second quarter of 2015 of USD0.47 per share.
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Japanese oil refiner Idemitsu Kosan is understood to have agreed a GBP833 million deal to acquire Royal Dutch Shell's 33% stake in Showa Shell Sekiyu, a smaller Japanese refining company, according to Reuters citing a Nikkei report. The deal is expected to be announced on Friday.
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Centrica said it has completed its strategic review of the business which will see a shift in investment away from its upstream segment and toward its British Gas business as it reported a rise in pretax profit but a slight fall in earnings in the first half of 2015. The electricity and gas provider reported a GBP1.20 billion pretax profit in the first half of 2015, up from a GBP890 million profit a year earlier despite revenue experiencing a slight 2% drop to GBP15.45 billion from GBP15.74 billion. Centrica slashed its interim dividend by 30% to 3.57 pence from 5.10 pence following the decision earlier in the year to rebase the dividend.
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Diageo reported a rise in profit in its recently-ended financial year as sales grew and it increased its dividend for the year saying it believes it will continue to deliver a strong and sustained performance. The drinks giant reported a pretax profit in the year ended June 30 of GBP2.93 billion, up from the GBP2.71 billion it reported the year before, as revenue grew to GBP16 billion from GBP14 billion. Diageo will pay a total dividend of 56.4 pence for the year, an increase of 9% on the 51.7p it paid the year before.
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BT Group said it is on track to achieve its outlook for the full year, as it posted a rise in pretax profit for its first quarter. For the quarter to end-June, BT posted a pretax profit of GBP632 million, up from GBP546 million, as revenue was flat at GBP4.36 billion, compared to GBP4.35 billion.
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Royal Bank of Scotland Group said it doesn't expect to be able to return capital to shareholders until at least the opening quarter of 2017, as the bank reported an improvement in its capital position and 27% increase in second-quarter net profit. RBS said it wants to make progress in a number of areas before returning capital. "This is dependent on the achievement of certain strategic objectives, including sustained profitability, improved stress test results and resolving our major conduct and litigation issues," the bank said in a statement. RBS said it made a GBP293 million net profit in the three months to the end of June, compared with GBP230 million in the corresponding quarter the prior year. Its common equity tier one ratio, a key measure of financial strength, increased to 12.3% from 11.5% during the quarter.
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Lloyds Banking Group said it has agreed to sell a portfolio of Irish commercial loans to a consortium consisting of Goldman Sachs, CarVal Investors and Bank of Ireland for about GBP827 million, with the group's remaining exposure to commercial assets in Ireland to be minimal following the deal. Lloyds said the sale includes GBP2.6 billion in assets, with GBP2.3 billion of that amount considered to be impaired. In 2014, the loans generated a GBP130 million pretax loss.
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Schroders said it is preparing for high levels of volatility in the financial markets in the near term, as the asset manager reported increases in pretax profit and funds under management in the first half. The company said it made a GBP290.3 million pretax profit in the six months to the end of June, compared with GBP233.9 million in the corresponding period the prior year. It increased its interim dividend by 21% to 29.0 pence per share. Schroders generated GBP8.8 billion in net inflows, taking assets under management up by 14% to GBP309.9 billion in the six months.
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InterContinental Hotels Group reported growth in profit in the first half of 2015 as it achieved growth in revenue per available room in all of the regions in which it operates and said it remains confident in the outlook for the rest of the year. The hotel operator reported a 21.5% rise in pretax profit in the six months ended June 30 to USD458 million from USD377 million, as total revenue grew 0.8% to USD915 million from USD908 million. IHG will pay an interim dividend of 27.5 cents, a 10% increase on the 25.0 cents it paid in the first half of 2014.
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Support services company Babcock International Group said it is trading in line with its first-half and full-year expectations so far in its 2015 financial year. Babcock said it has seen strong demand for its services in the first half, both in its existing contract book and in new business wins. Since its full-year results were published in May, Babcock's order book has remained stable at GBP20 billion and continues to provide strong visibility, with 84% of its revenue for the 2016 financial year secured and 60% of its 2017 revenue in place.
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Aerospace and engineering group Rolls-Royce Holdings posted a sharp fall in first half profit on Thursday, hit by weakness in its offshore marine markets due to the slowdown in the oil and gas industry. Rolls-Royce said its pretax profit in the six months to the end of June fell to GBP310 million, down 57% from the GBP713 million it posted a year earlier. Revenue rose to GBP6.37 billion from GBP6.25 billion, but profitability is taking a heavy hit from the slowdown in the oil and gas industry, which has hit revenue in Rolls-Royce's offshore marine business, and by a margin squeeze related to the transition to new jet engine programmes. The company said it will pay a 9.27 pence interim dividend, up 3% from a year earlier.
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Defence contractor BAE Systems said its pretax profit fell in the first half of 2015 despite revenue increasing and said its order backlog has weakened since the end of 2014. FTSE 100-listed BAE said its pretax profit fell to GBP508 million from GBP541 million in the half to the end of June, thanks primarily to higher financing costs. Revenue increased to GBP8.47 billion from GBP7.61 billion. But BAE said its order backlog has weakened since the start of the year, falling to GBP37.3 billion at the end of June, from GBP39.7 billion at the end of December 2014. BAE said it will pay an interim dividend of 8.4 pence per share, up 2% from the 8.2 pence per share it paid a year earlier.
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Smith & Nephew reiterated its expectations for its full year and lifted its interim dividend, as it posted a rise in pretax profit for its first half. The medical devices maker posted a pretax profit of USD411 million for the half year to June 27, up from USD349 million a year before, on revenue of US2.27 billion, up from USD2.22 billion. In its second quarter, revenue rose 2%, hit by around 9% from the strength of sterling, which was offset by a 6% boost from acquisitions. Smith & Nephew proposed a dividend of 11.8 cents per share, up from 11.0 cents a year before.
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COMPANIES - FTSE 250
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Car distributor and retailer Inchcape said its pretax profit fell in the first half of 2015, thanks to adverse currency movements and higher costs, but shares in the group were trading higher as it said its underlying like-for-like revenue growth was robust in the period. Inchcape said its pretax profit in the first half fell to GBP153 million from GBP162.1 million a year earlier, despite revenue rising to GBP3.4 billion from GBP3.3 billion on a reported basis. Like-for-like revenue at constant currencies, however, rose by 7.8% in the half and the group's underlying operating profit was up by 5.6%, compared to a 5.2% decline on a reported basis. It said it will pay an interim dividend of 6.8 pence per share, up from 6.3 pence per share a year earlier.
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COMPANIES - LONDON MAIN MARKET AND AIM
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Sports marketing agency Chime Communications said it is in advanced talks to be acquired by advertising and marketing giant WPP and US buyout house Providence Equity Partners. In a short statement, Chime said it was in talks with WPP and Providence on a potential cash offer for the entire business for 365 pence per share, plus a 2.53 pence interim dividend. Chime closed Wednesday at 274.50p, so the offer would represent a 33% premium. The deal would value all of Chime at around GBP350 million. WPP already owns 20% of the company.
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Verdes Management said late Wednesday it has agreed to acquire REACT SC Holdings for Verdes shares worth GBP1.56 million and also has conditionally placed new shares to raise another GBP1.75 million. REACT is a specialist provider of rapid-response, deep-cleaning and emergency-decontamination services for the likes of Network Rail, HM Prison Service, and UK local authorities and police services. The acquisition, through the issue of 92.9 million new Verdes shares, constitutes a reverse takeover under AIM rules. Verdes has a market capitalisation of GBP1.44 million. It originally joined AIM in 2005 as an independent record label but sold its operating businesses in 2010 and became an investing company.
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COMPANIES - INTERNATIONAL
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Social networking giant Facebook said its second quarter profit fell 9% from last year, as higher costs and expenses more than offset a 39% increase in revenue. However, the company's quarterly earnings per share, excluding items, came in above analysts' expectations as did its quarterly revenue. This marks the company's twelfth quarterly results since going public through a much hyped IPO in May 2012. The company's advertising revenue for the second quarter surged 43% year-over-year to USD3.83 billion and constituted nearly 95% of total revenue. Facebook's mobile ad revenue represented about 76% of advertising revenue for the second quarter, up from about 73% in the prior quarter and 62% in the prior year quarter.
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MetLife reported second quarter net income of USD1.0 billion, compared to USD1.3 billion for the year-ago quarter. Total operating revenue for the second quarter fell to USD17.36 billion from USD17.80 billion a year ago.
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Marriott International reported a 25% jump in second-quarter profit as customers flocked to its hotel properties, driving up occupancy and room rates. Marriott's quarterly earnings topped Wall Street estimates by a cent, while revenue fell short of expectations.
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South Korean conglomerate Samsung Electronics reported a 9% year-over-year decline in second-quarter profit, reflecting continued weakness in its flagship handset business. However, sales for the quarter came in slightly above Samsung's guidance released earlier in the month, while operating profit was in line with the guidance. Looking ahead, Samsung said that while the second half of 2015 is expected to present "mounting challenges", it will try to improve earnings. Suwon, South Korea-based Samsung has now reported its seventh consecutive quarter of earnings drop amid the continued slowdown in its core smartphone business as it grapples with increased competition.
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German conglomerate Siemens reported that third-quarter net income attributable to shareholders of Siemens declined to EUR1.36 billion from EUR1.38 billion in the prior-year quarter. Revenue for the quarter grew 8% to EUR18.84 billion from EUR17.52 billion in the same quarter last year. Revenue was 3% lower on a comparable basis.
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Swiss Re reported that its group net income for the second quarter increased to USD820 million from the prior year's USD802 million, with all Business Units contributing positively to the result. Earnings per share grew to USD2.39 from USD2.34 in the previous year. But premiums earned and fee income for the quarter declined to USD7.144 billion from USD7.560 billion in the prior year.
The group said it is on track to achieve its 2011-2015 financial targets.
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Two of Germany's largest media businesses, Axel Springer and ProSiebenSat.1, said that they will not merge but will work together on digital projects. No further cooperation was planned, a ProSiebenSat.1 spokesman said while Axel Springer said, "Further changes under company law are not foreseen." People close to the talks said Axel Springer, the Berlin-based publisher, and the Munich-based broadcaster ProSiebenSat.1 had explored the possibility of merging.
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Thursday's Scheduled AGMs/EGMs

Pennon Group
Babcock International
Halfords Group
Altitude Group
Elektron Technology
Caffyns
Findel
IS Solutions
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By Tom Waite; thomaslwaite@alliancenews.com; @thomaslwaite

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