GOG.L Share News (GOG)

LONDON (Alliance News) - Rolls-Royce Holdings Thursday moved to appease investors unhappy with the company's recent outlook downgrade, saying it will return cash to shareholders through a GBP1 billion share buyback once the planned sale of its energy gas turbine and compressor business to Siemens goes through.

It said the cash return reflects its strong balance sheet and because it isn't planning any material acquisitions.

The maker of aircraft and marine engines has had a tough few months. In February, its shares fell sharply after it surprised markets by warning that it expected a pause in overall profit and revenue growth in 2014 due to falling revenue in its defence businesses and lower marine unit revenue. It said it was confident growth will return in 2015. In May, it then cut the guidance for its marine unit, although kept its overall guidance for flat revenue and profit in 2014 and a return to growth in 2015. And earlier this month, it said about GBP2.6 billion, or about 3.5%, of its order book had been wiped out after airline Emirates cancelled an order for 70 airbus A350 planes that had been due to be equipped with Rolls-Royce engines.

In its statement Thursday, the company said it is still retaining its guidance for 2014 and 2015.

In a second piece of better news, Rolls-Royce also said it has signed a memorandum of understanding with Chinese nuclear reactor vendor CNNC to cooperate more closely on civil nuclear power projects in China, and also elsewhere.

The memorandum will explore possible collaboration in areas such as engineering support, provision of components and systems, emergency diesel generators, supply chain management and instrumentation and control technology, it said.

Rolls-Royce said it currently supplies safety-critical instrumentation and control technology to more than 70% of nuclear reactors in operation or under construction in China and emergency diesel generators to almost 40%.

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FTSE 100: up 0.7% at 6,828.34
FTSE 250: up 0.8% at 15,746.56
AIM ALL-SHARE: up 0.4% at 786.18
GBP-USD: up at 1.7087
EUR-USD: up at 1.3620
GOLD: up at USD1,286.65 an ounce
OIL (Brent): up at USD114.57 a barrel
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Other Top UK Corporate News
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Man Group has agreed to acquire Numeric Holdings LLC, a Boston quantitative equity manager that had USD14.7 billion in funds under management at the end of May, for up to USD494.0 million, as it looks to diversify its flagship AHL fund and expand in North America. News of the acquisition comes three weeks after Man Group confirmed it was in talks to buy Numeric from majority owners TA Associates and other shareholders, as well as from management and employees. Man Group has been seeking to diversify its AHL fund, which has suffered from investor outflows and weak performance in recent years.
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Carillion, Balfour Beatty, Costain Group and a joint venture including Morgan Sindall Group won a GBP184 million contract to upgrade the M60 and M62 motorways around Manchester, as Carillion also said it has now signed a GBP200 million support services contract with Nottingham University Hospitals NHS Trust.
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Lloyds Banking Group is set to value TSB Banking Group, the bank it must divest to meet European conditions of its state bailout in 2009, at GBP1.3 billion when it prices the offer, the Financial Times reported Wednesday, citing people familiar with the deal. The FT said that the order book was "well covered" at the midpoint of a 250p-270p per share price range. Lloyds is planning an initial sale of between 25% and 27.5% of TSB. Mark Carney's hint at an earlier interest rate rise than markets expected has served to buoy investor demand, the FT cited the people as saying. The paper added that Lloyds is now considering selling a bigger stake than first planned.
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Online sales retailer MySale Group said it was open to creating a joint venture in Australasia and Asia with its new investor Sports Direct International. The news comes just a day after Sports Direct, the UK's biggest sporting goods retailer by revenue, bought a 4.8% stake in MySale, and said it wants to work with the fledging online retailer on developing a Sports Direct offering in Australasia and Asia.
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Kier Group has won a GBP140 million, four-year deal to do planned maintenance work on a portfolio of 33,000 properties in London and the East of England for Genesis Housing Association. In a statement, the company said the deal, which has the potential to be extended for a further six years, includes the provision of responsive repairs for over 10,000 homes. It will start getting ready to start work this month, and expects to be fully operational by October.
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Micro Focus International raised its total dividend for the year to end-April, even though pretax profit declined slightly as higher operating costs offset revenue growth. The software company proposed a total dividend per share of 44.0 cents, up 10% from 40.0 cents in the previous year. The company reiterated that its core objective is to deliver long-term consistent returns to shareholders of at least 15% to 20% per year. Micro Focus posted a pretax profit of USD147.8 million, down slightly from a restated USD151.5 million in the previous year, despite seeing revenue rise to USD433.1 million from EUR412.2 million.
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Infinis Energy reported a lower profit for its last financial year due to refinancing costs and the costs of its initial public offering last November, although revenue rose 7.3% on the back of higher exports of wind power and higher average selling prices. The company reported a net loss of GBP11.8 million for the year to end-March, compared with the GBP8.9 million profit it made a year earlier. However, this was mainly due to a GBP59.2 million pretax charge for the listing costs and as it refinanced and consolidated ten of its wind projects last October. It said its earnings before interest, tax, depreciation and amortisation, excluding operation exceptional items, rose to GBP148.4 million, from GBP125.4 million, which beat the target it had set at its IPO.
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UK bus and rail operator Go-Ahead Group raised its guidance for its current financial year, after its rail unit performed better than expected in the fiscal fourth quarter, and said it is expecting strong growth rates to continue in its next year.
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The UK government awarded the West Coast Main Line rail franchise to existing operator Virgin Rail Group, a joint venture between Richard Branson's Virgin Group and transport operator Stagecoach Group. Stagecoach said the new franchise will start on June 22 and run until the end of March 2017. It said Virgin Rail had agreed to provide a multi-million-pound package of improvements on the route providing new services between Shrewsbury and Blackpool and London. The joint venture will pay the Department for Transport GBP433 million to run the franchise over the initial period.
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AIM MOVERS
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Venn Life Sciences Holdings is up after its innovation division, Innovenn, secured a patent from the European Patent Office for its anti-acne complex. The patent will allow it to develop a new commercial anti-acne brand later in the year. Venn has also begun commercial discussions on its human skin testing platform Labskin, and it expects to see the first revenues from the product later in the year. Velocys is up after it emerged that Russian billionaire Roman Abramovich had raised his stake in the business to 7.71% through his Ervington Investments vehicle and after Canaccord initiated coverage of the stock with a "Speculative Buy" and 400 pence price target. Abramovich's vehicle previously had nearly 7.8 million shares in the gas-to-liquids technology business, but now has just over 9.0 million shares, according to a filing to the London Stock Exchange late Wednesday. Publishing Technology has fallen sharply after it warned that its 2014 results will be below market expectations and broadly in line with its results for 2013. It said its first half would likely show a loss due to additional product development expenses and deferred revenue, as it attempts to rectify issues with some of its current contracts. Premier African Minerals is another faller after it said it was going to have to repeat metallurgical studies on its RHA tungsten project in Zimbabwe, delaying a mining study update for the site.
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Top Economics And General
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British retail sales declined in May largely due to a fall in food store sales, the Office for National Statistics said. Retail sales volume, including petrol, fell 0.5% in May from April. This was the second fall in last five months and matched economists' expectations. In April, sales were up 1%. Sales excluding auto fuel also fell 0.5%, reversing April's 1.7% rise. Economists had forecast a 0.6% drop for May.
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UK industrial order book picked up in June, reaching its strongest level since December's eighteen year high, the Industrial Trends Survey from the Confederation of British Industry showed. About 34% of firms reported order books were above normal, while 23% said they were below normal, giving a balance of 11%. This was the highest balance since the eighteen-year high reached in December 2013. Firms expect output to grow faster in the coming quarter, with 44% predicting growth, and 12% a decline, giving an overall balance of +32%.
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The Federal Open Market Committee on Wednesday reduced the pace of monthly asset purchases by USD10 billion to USD35 billion, as expected. The central bank will add to its holdings of agency mortgage-backed securities at a pace of USD15 billion per month, and will add to its holdings of longer-term Treasury securities at a pace of USD20 billion per month. Additional tapering is likely if the labor market continues to show improvement and inflation picks up, the Fed said in a statement accompanying its decision. Fed Chair Janet Yellen said a post-decision press conference that the Fed will look at a "range of indicators" on jobs before deciding to raise rates.
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The Federal Reserve also cut its forecast for US growth to a range of 2.1-2.3% for this year, slashed from a March projection of 2.8-3% after an economic contraction in the first quarter at an annualized pace of 1%. The central bank's projections remain stable for outlying years. The Fed sees growth of 3-3.2% in 2015, 2.5-3% in 2016 and 2.1-2.3% in the longer run.
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Workers were evacuated from Iraq's key Baiji refinery Thursday, local sources told dpa, as it remained unclear who was actually in control of the plant which accounts for almost a third of the country's refining capacity. Army spokesman General Qassem Ataa, in a press conference aired on state television, said the complex was fully under government control. According to reports from Dubai-based al-Arabiya television, fighters from the jihadist Islamic State in Iraq and the Levant (ISIL) were however still present inside the facility.
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US President Barack Obama huddled Wednesday with congressional leaders over the growing crisis in Iraq as the Sunni-led insurgency moved on Iraq's largest oil refinery. US defence officials confirmed that Iraq had asked Washington to mount airstrikes against the Islamic State in Iraq and the Levant.
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Iraq has asked the US to mount airstrikes against militants, Iraqi Foreign Minister Hohyar Zebari was quoted as saying as Sunni-led insurgents were pressing on with advances in the oil-rich country. "Iraq has formally asked for Washington's assistance under a security agreement to mount airstrikes against the terrorist groups," Dubai-based Al-Arabiya TV quoted Zebari as saying on the sidelines of an Islamic meeting in the Saudi city of Jeddah.
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US Treasury Secretary Jacob Lew has threatened there would be additional sanctions against Russia if Moscow did not cut off arms supplies to ethnic Russian rebels in Ukraine. The US Treasury department administers existing US sanctions that freeze assets of a list of senior individual Russians and top companies. Lew demanded Russia act in support of a peace plan unveiled by Ukraine President Petro Poroshenko.
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Israeli war jets carried out several airstrikes early Thursday, targeting training facilities that belong to the Islamic Hamas movement in northern Gaza Strip and Gaza city, security officials said. Officials in Gaza said several explosions damaged northern and central Gaza Strip as well as eastern and western Gaza city. Israeli jets hovered over the coastal enclave before carrying out the strikes. Training camps and bases that belong to Islamic Hamas movement's armed wing al-Qassam Brigades were targeted, officials said. Ambulances and firefighters rushed to the scenes.
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England captain Steven Gerrard believes the key to beating Uruguay in Sao Paulo on Thursday will be the team's ability to defend against the "genius" of Luis Suarez. The Liverpool midfielder faces his club team-mate in the must win second game of Group D and both he and England manager Roy Hodgson praised the attacking ability of the Uruguayan striker who is expected to start tomorrow's game after missing the team's opening defeat to Costa Rica.
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Afternoon Watchlist (all times British Summer Time)
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13:30 US Initial Jobless Claims
15:00 US CB Leading Indicator
15:00 US Philadelphia Fed Manufacturing Survey
15:30 US EIA Natural Gas Storage change
20:00 US American Petroleum Institute Monthly Report

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Friday's Key UK Corporate Events
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Polar Capital Holdings Full Year Results
JZ Capital Partners Interim Management Statement
Debenhams Interim Management Statement

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Friday's Key Economic Events (all times British Summer Time)
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All Day EU EcoFin Meeting
07:00 Germany Producer Price Index
07:35 Japan Bank of Japan Governor Kuroda Speech
09:00 EU Current Account
09:00 Italy Industrial Sales
09:30 UK Public Sector Net Borrowing
15:00 EU Consumer Confidence Preliminary

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