LONDON (Alliance News) - Vodafone Group is the best-performing stock in the FTSE 100 Tuesday after it narrowed its earnings before interest, tax, depreciation and amortisation guidance towards the top end of its previous range after the profit measure rose 5.5% in the first half of the year, driven partly by its investments in 4G networks.
The mobile giant reported 5.5% growth in Ebitda for the six months to end-Sepetmber, as revenue rose 8.9% to GBP20.75 billion, driven by its acquisition of Kabel Deutschland, Grupo Corporativo Ono SA and the full consolidation of its Italian operation.
It now expects Ebitda for the whole financial year to be between GBP11.6 billion and GBP11.9 billion, up from its previous guidance of between GBP11.4 billion and GBP11.9 billion.
Its organic service revenue continued to decline as its operations in southern Europe continued to be hit by the weak economic situation there, but the decline in the second quarter was a big improvement compared with the first quarter, partly due to the reduced impact of mobile termination rate cuts.
"There is growing evidence of stabilisation in a number of our European markets, supported by improvements in our commercial execution and very strong demand for data," Chief Executive Vittorio Colao said.
It said its multi-billion pound investment project is on track, with mobile network deployment 40% complete, European 4G coverage up to 59%, and 10.5 million 4G customers across the group.
Data traffic was up 77% in the first half, but that accelerated to 80% growth in the second quarter, driven by 4G in Europe and 3G in India.
Vodafone also announced plans to launch residential broadband services in the UK in spring 2015 and said it is planning to use the infrastructure it acquired with Cable & Wireless Worldwide to launch these UK services.
It also raised its interim dividend to 3.60 pence, up from 3.53 pence in the previous year.
Capita's move into outsourced mortgage servicing operations took a big step forward Tuesday after it said it is set to sign a GBP325 million, 10-year deal, to handle the Co-operative Bank's mortgage servicing operation in the UK.
The deal, on which it has been made preferred bidder, needs to be approved by the bank's board and regulators, but Capita is expecting it to start in the first quarter of 2015.
Capita already manages hundreds of billions of pounds of commercial loans for banks, and had started to push into mortgage management in May when it bought Crown Mortgage Management, now branded Capita Mortgage Services.
However, managing the Co-Operative Bank mortgage portfolio marks a big step up from providing administration services to institutions including Aldermore Bank and Skipton Building Society.
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Markets: UK shares are modestly higher again Tuesday, with some standout individual movers driven by corporate reports. Travel-related stocks are doing well while oil stocks are down after he price of Brent Oil hit its lowest level since October 2010, Tuesday morning. Brent hit a low of USD81.21 per barrel.
Futures indicate a higher open on Wall Street. The DJIA and Nasdaq Composite are pointed up 0.1%, while the S&P 500 is set to open up 0.2%.
FTSE 100: up 0.2% at 6,624.80
FTSE 250: up 0.2% at 15,633.30
AIM ALL-SHARE: down 0.2% at 722.07
GBP-USD: up at USD1.5859
EUR-USD: flat at USD1.2418
GOLD: down at USD1,154.20 an ounce
OIL (Brent): up at USD82.12 a barrel
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Other Top UK Corporate News
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Land Securities Group said the shift in its retail portfolio to better quality properties is paying off, as it reported higher net asset value per share and a 7.5% valuation surplus over the first half of its financial year. In a statement, the commercial property company reported a basic net asset value per share of 1,183 pence on September 30, up from 1,069 pence at the end of March, while its adjusted diluted net asset value per share rose to 1,129 pence, from 1,013 pence. It raised its interim dividend to 15.8 pence, from 15.2 pence a year ago.
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Building materials company CRH said its operating earnings and like-for-like sales grew in the third quarter, as growing demand in the US more than offset moderating markets in Europe, and it reiterated its forecast for earnings growth of about 10% in the whole of 2014. In a statement, the company said like-for-like sales, which exclude acquisitions and disposals and currency movements, grew 3% in the third quarter. That helped pushed up earnings before interest and tax by 6% on the year, driven by 10% growth in the Americas.
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Friends Life Group reported a fall in value of new business in the first nine months of its financial year, largely due to the reduction in retirement income value of new business. In a statement, Friends Life reported GBP94 million of value of new business from continuing operations in the first nine months of 2014, compared with GBP123 million in the corresponding period last year. Retirement income value of new business fell to GBP40 million from GBP64 million. However, corporate benefits annual premium equivalent rose by 14% to GBP465 million, while protection annual premium equivalent rose by 11% to GBP70 million.
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Healthcare company BTG reported higher pretax profit for the first half of its financial year, driven by acquisitions in its interventional medicine unit and strong growth in its specialty pharmaceuticals business, and said it now expects full-year revenue to be at the top end of its guidance range. It also said it expects the first-half momentum to continue into the second half, and it's on the look out for more acquisitions in both interventional medicine and specialty pharmaceuticals. The company reported a pretax profit of GBP37.6 million for the six months to end-September, up from GBP32.7 million a year earlier, as revenue grew by a quarter to GBP191.2 million, from GBP153.0 million.
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Renishaw said it has continued to see strong demand across its product lines and will up investment in manufacturing capacity in order to meet this demand. In a short trading statement, the company said its anticipates pretax profit for the full year to be GBP95 million to GBP105 million, on revenue of between GBP425 million and GBP445 million.
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Morgan Advanced Materials said it is trading in line with expectations and said it expects its revenue growth in the second half to be higher year-on-year. The FTSE 250-listed company said trading in the four months to the end of October was "encouraging" and said it was performing in line with its expectations.
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Oxford Instruments said it expects to see a performance at the lower end of market expectations for the full year, despite expecting second half results ahead of the previous year, due to a weaker first half to end-September. Oxford Instruments posted a pretax profit of GBP2.7 million in the half year, down from GBP17.7 million, despite seeing revenue rise to GBP178.5 million from GBP166.3 million, due to higher operating costs, and exceptional costs of GBP11.8 million.
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Afren said developments at its projects offshore Nigeria are on schedule and reiterated it is on track to deliver its production guidance for 2015. At the Ebok field in offshore Nigeria, Afren and its partner, Oriental Energy Resources Ltd, are expecting its work programme at the Ebok central fault block extension to be completed by the end of 2015, which is targeting both producing and undeveloped reservoirs, it said in a statement. Afren remains on track to deliver net production between 32,000 barrels of oil per day to 36,000 barrels of oil per day for 2015 from the Ebok field, which is at the lower end of its guidance, it said in a statement.
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Taylor Wimpey upgraded its operating margin growth forecast for 2014 and reiterated its medium-term forecasts, saying the recent slowdown in the UK housing market meant it is now growing at a steady and sustainable rate. In a statement, the housebuilder said it now expects its operating margin to grow 400 basis points in 2014.
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Fenner posted a big drop in pretax profit for the year on the back of a fall in revenue, as the company was hit by currency movements and weaker conditions in key markets. The reinforced polymer technology company said pretax profit for the year to August 31 was GBP29.2 million, sharply down from the GBP66.4 million posted a year earlier. Revenue in the period was down to GBP729.4 million from GBP820.6 million, hit by the strength of sterling over the year. At constant currencies, revenue fell 4%, Fenner said.
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TalkTalk Telecom Group said it was on track to deliver its financial targets for the financial year 2017 and upped its interim dividend as it swung to a pretax profit in the half year to end-September. The company raised its interim dividend to 4.6 pence from 4.0 pence in the previous year. TalkTalk posted a pretax profit of GBP20 million in the half year, swinging from a pretax loss of GBP9 million a year before, as revenue rose to GBP871 million from GBP843 million.
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Carillion said it had got financial close on a regeneration programme for Sunderland City Council that's potentially worth up to GBP800 million over the 20 year life of the project. Carillion was made preferred bidder on the project a year ago, but it has now agreed the terms of the joint venture with Sunderland City Council and achieved financial close.
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Kennedy Wilson Europe Real Estate said it has bought the corporate vehicle that owns 111 Buckingham Palace Road in London for GBP204.3 million in shares. The investor in real estate and real estate loans in Europe said the underlying real estate is valued at GBP207.5 million, reflecting a gross yield of 5.1% which is expected to rise to about 7% after it carries out its asset management plans.
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Galliford Try said it has been appointed to the Collaborative Delivery Framework programme by the Highways Agency. The company has secured a place on Lot 3a under the scheme, which involves construction work on individual schemes with values ranging from GBP25 million to GBP100 million, the FTSE 250-listed housebuilding and construction company said. Carillion, Costain and Morgan Sindall also all were appointed to the Highways Agency programme, as announced on Monday.
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The British High Court has rejected an appeal made by J Sainsbury against Tesco's "Price Promise" advertising campaign, Reuters reported. Sainsbury's complained to the Advertising Standards Authority earlier this year about the advertising campaign, which compared the cost of a basket of Tesco's branded, own-label and fresh food against what it considered the equivalent products from Sainsbury's and other rivals, Reuters said. Sainsbury's had argued that comparing own-brand items on price alone, excluding provenance and other ethical issues, was unfair.
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BP's attempt to have the administrator overseeing the payouts to businesses and individuals related to the Gulf of Mexico oil spill was rejected by a US federal court judge, Reuters reported. US District Judge Carl Barbier in New Orleans rejected several arguments entered by BP to remove Patrick Juneau, the claims administrator.
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AIM Movers
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Central Rand Gold has soared after it entered into a memorandum of understanding with Hiria Group Co Ltd to sell the entirety of its Dutch subsidiary which owns its assets for USD150 million. The parties are trying to finalise a deal by the end of next March, but the memorandum is not binding, and Central Rand said it is continuing talks with other parties interested in purchasing the assets and subsidiary. Amur Minerals Corp shares are up by a third after it said its exploration and production licence application for the Kun-Manie nickel copper sulphide project has been approved. Venn Life Sciences Holdings is doing well after it signed a deal worth over EUR1.4 million to conduct a European wide Phase II study for an undisclosed US based company. EU Supply is a big faller after it warned delays to the roll out of a Danish housing project would result in about GBP200,000 of revenue from the project being pushed into next year. IndigoVision Group is down after it warned that its operating profit is set to fall short of market expectations after sales came in below hopes in its most recent quarter. ZincOx Resources is another faller after it said its Korean recycling plant will not return to full production until next year following its suspension to be repaired, leaving it with lower cash reserves than usual.
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Top Economics And General
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UK retail sales were flat in October, defying expectations for a decline, a report from the British Retail Consortium showed. Retail sales on a like-for-like basis were unchanged year-over-year in October, defying the 0.5% drop expected by economists. In September, sales had declined 2.1%. Total retail sales rose 1.4% in October compared with the 2.6% growth a year earlier.
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Japan posted a current account surplus of JPY963.0 billion in September, the Ministry of Finance said on Tuesday. That topped forecasts for a surplus of JPY537.7 billion following the JPY287.1 billion in August. The trade balance showed a deficit of JPY714.5 billion versus forecasts for JPY782.5 billion after posting a shortfall of JPY831.8 billion in the previous month.
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A measure of people's assessment of the Japanese economy weakened in October, survey data from the Cabinet Office showed. The current index of the Economy Watchers Survey fell to 44 in October from 47.4 in September. The score was forecast to drop marginally to 47.2. A score above 50 indicates optimism and a reading below 50 suggests pessimism.
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Consumer confidence in Japan decreased unexpectedly in October, data from the Cabinet Office showed. The consumer confidence index fell to 38.9 in October from 39.9 in September. Economists had expected the index to rise to 40.5.
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An alleged Russian military presence on Ukrainian territory drew renewed condemnation Monday as officials in Kiev reported an ever-growing contingent of forces from Moscow in separatist-held areas in eastern Ukraine. "Significant numbers of armoured vehicles and personnel continue to arrive in the districts controlled by militants," Ukrainian National Security Council spokesman Andriy Lysenko said in Kiev. He said that Russian and separatist troops are being concentrated along the demarcation line separating them from government troops.
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US forces have for the first time re-entered Anbar province, which has become a stronghold of the Sunni militants, the Pentagon says. About 50 US military personnel are at al-Asad Air Base near Haditha "to conduct a site survey of facilities for potential future use as an advise-and-assist operation location" to support Iraqi government forces, Commander Elissa Smith, Pentagon spokeswoman, tells dpa. The group is armed only to protect itself, she said. US forces are not arming Sunni tribes in the region, which is up to the Iraqi government, Smith said.
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Two Palestinians stabbed and killed two Israelis in separate attacks in Tel Aviv and the West Bank on Monday, police said, amid heightened Israeli-Palestinian tensions. The dead were an Israeli soldier, 20, and an Israeli woman, 26.
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Syrian President Bashar al-Assad gave a cautious welcome Monday to a proposal from UN envoy Staffan de Mistura for local ceasefires in Syria, starting in the key northern city of Aleppo. Al-Assad, meeting de Mistura in the capital, Damascus, told the envoy that the proposal was "worth studying and attempting to work on...to achieve its objectives of restoring stability to Aleppo city," state news agency SANA reported. Aleppo has seen fierce fighting in recent months as regime forces seek to encircle the rebel-held eastern half of the city.
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The Ebola epidemic in West Africa could have long-term economic consequences locally and globally if appropriate action is not taken, experts warned on Monday. The USD6 billion in emergency relief funding that US President Barack Obama has asked Congress for is minimal compared to the potential economic impact, said Helene Gayle, president of the international humanitarian agency CARE USA.
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Afternoon Watchlist (all times in GMT)
13:55 US Redbook index
23:50 Japan Money Supply M2+CD
23:50 Japan Tertiary Industry Index
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Wednesday's Key UK Corporate Events
Capita - Interim Management Statement
Burberry Group - Interim Results
Punch Taverns - Full Year Results
J Sainsbury - Half Year Results
G4S - Interim Management Statement
Flybe Group - Half Year Results
MoneySupermarket.com - Interim Management Statement
Barratt Developments - Interim Management Statement
Bowleven - Full Year Results
Derwent London - Interim Management Statement
Interserve - Interim Management Statement
Novae Group - Interim Management Statement
Kier Group - Interim Management Statement
Safestore - Trading Statemnt
SSE - Half Year Results
Tullow Oil - Interim Management Statement
Tyman - Interim Management Statement
CSR - Q3 Results
Workspace Group - Half Year Results
SIG - Interim Management Statement
Brit Group - Interim Management Statement
Cape - Interim Management Statement
EnQuest - Interim Management Statement
Capital Gearing Trust - Interim Results
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Wednesday's Key Economic Events (all times in GMT)
01:00 J apan BoJ's Board Member Miyao's Speech
05:00 US Fed Minneapolis's Narayana Kocherlakota speech
07:00 Germany Wholesale Price Index
08:00 US Philadelphia Fed's Plosser speech
09:30 UK Claimant Count Change
09:30 UK ILO Unemployment Rate
10:00 EU Industrial Production
10:30 UK Bank of England Quarterly Inflation Report
12:00 US MBA Mortgage Applications
15:00 US Wholesale Inventories
23:50 Japan Domestic Corporate Goods Price Index
23:50 Japan Foreign bond/stock investment
23:50 Japan Machinery Orders
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10 Apr 2015 16:03
