HSBC Holdings Share News (HSBA)

LONDON (Alliance News) - Marks & Spencer Group shares have hit a seven-year high Thursday after it reported UK sales growth that beat analysts' expectations, driven by strong online growth and the first rise in general merchandise sales for three years, although its international sales fell due to the crisis in Russia and Ukraine and issues in its Turkish franchise business.

The retailer reported 1.6% growth in group sales for the 13 weeks to March 28, as a 2.7% rise in UK sales offset a 3.8% decline in international sales. In the UK, food sales grew 3.7%, or 0.7% on a like-for-like sales basis, with record Valentine's Day sales. General merchandise sales, meanwhile, grew 1.3% and 0.7% on a like-for-like basis, the first growth in three years. Online sales grew 13.8%.

M&S has been struggling with its general merchandise business, which sells fashion and homewares, for a decade or more, with various chief executives trying to turn the business around by revamping stores and ranges, but with little success until recently. It has faced stiff competition from rivals like Next PLC, as well as criticism of its product ranges and its store and brand revamps.

The company said the improvement in general merchandise was driven by "continued focus on product quality and styling" and that its spring and summer ranges this year have been well received by customers. It had reported a 5.4% drop in general merchandise sales in the third quarter.

It said that in line with its plan for the year, the company promoted less and focused more on full price sales, although it admitted that this was partly offset by more stock going into the Christmas sale as a result of unseasonal autumn and winter conditions. The whole sector was affected by unseasonably warm weather last autumn which kept shoppers out of stores.

It also noted that good progress in the general merchandise gross margin was being made, with guidance unchanged at 150 to 200 basis points.

"Overall, this was a really good set of results and the increase in like-for-like sales in the general merchandise division was really unexpected," Brewin Dolphin Analyst Nicla Di Palma wrote in a note to clients, adding that consensus expectations were for a 0.4% decline in general merchandise sales.

"It is worth noting that M&S is still losing market share in general merchandise and it is too early to say whether this is the start of a new chapter in M&S’s history. On the other hand, we are more confident about the cost savings coming from direct sourcing and from the rationalisation of distribution centres," the analyst added.

Sterling is under pressure against other major currencies after data showed that the UK construction sector grew at a slower pace in March. However, the pound is also being hit due to fears about the outcome of May's General Election, with latest polls suggesting a hung parliament that will either lead to a weak minority government or a new poll in the autumn.

The latest poll from YouGov and The Sun, published on Wednesday, has the Conservatives winning 36% of the vote with Labour close behind on 34%, but it forecasts Labour will win 285 seats to 261 for the Conservatives, leading to a hung parliament. The poll forecasts UKIP winning 13% of the vote, with the Liberal Democrats wining 8% and the Green Party 4%.

Campaigning by the parties has focused on business for the past couple of days, with Labour moving to defend itself from criticism from key figures in the business community as the leaders of the seven main parties prepare for a televised debate Thursday night.

Labour has accused business critics of leader Ed Miliband of being self-interested Conservative Party backers, claiming a battle with some of the UK most senior executives "plays straight into our hands," the Financial Times reports. Miliband began the week with an attempt to woo business leaders with a pledge to ensure Britain stays in the European Union, but Wednesday pledged to stop the "epidemic" of zero-hours contracts, which could have a major impact on some businesses.

Miliband said a Labour government would pass a law that will give employees the right to a regular contract after 12 weeks of working regular hours. The Conservatives have claimed the move is a threat to jobs, an accusation denied by Miliband. The Liberal Democrats have said they would ban exclusivity clauses in contracts which prevent people from seeking additional work.

Chuka Umunna, the shadow business secretary, had earlier in the week said Labour would reverse the most recent cut in UK corporation tax to 20% from 21%, saying it would instead use the money to give a tax break to small businesses.

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Markets: London's main stock indices are mixed ahead of the long Easter weekend, but Marks and Spencer is the best-performing stock in the FTSE 100 after its UK general merchandise business returned to growth after three years. The pound weakened against the dollar after data showed that construction sector growth slowed more-than-expected in March.

US stock futures point to a lower open on Wall Street, with the DJIA and S&P 500 set to open down 0.3% and the Nasdaq 100 down 0.4%.

FTSE 100: up 0.1% at 6,817.70
FTSE 250: up 0.5% at 17,214.57
AIM ALL-SHARE: down 0.1% at 714.61
GBP-USD: down at 1.4786
EUR-USD: up at 1.0817
GOLD: flat at USD1,204.39 an ounce
OIL (Brent): down at USD56.02 a barrel
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Other Top Corporate News
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BTG raised its revenue guidance for the financial year that just ended for a second time, and also said it expects revenue to grow strongly at constant currency rates in the current year. The healthcare company said it now expects revenue for the year to March 31 to be above the previous guidance it gave of GBP345 million to GBP360 million, including revenue from the PneumRx acquisition that was completed in early January. It then expects revenue to grow strongly in the current financial year to between GBP410 million and GBP440 million on a constant currency basis.
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Premier Oil, Falkland Oil and Gas and Rockhopper Exploration all said an oil and gas discovery has been made at the Zebedee well in the Falkland Islands. Premier Oil holds a 36% stake in the Zebedee well, with Falkland Oil holding a 40% interest and Rockhopper holds a 25% stake. The Zebedee well is on License PL004b, and the companies said all seven of the reservoir targets at the well were encountered and three of the targets were oil bearing. Wireline logging and formation test data indicate that a total of 18.5 metres of net gas pay, and 27.9 metres of net oil pay were encountered in the well.
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Ferrexpo said pellet production rose in the first quarter of the year, and it is producing more high grade pellets compared with a year ago whilst costs are falling due to the increasing production and because of the devaluation of the Hryvnia. The iron ore miner produced 2.9 million tonnes of iron pellets in the first quarter, up 2.5% from a the comparable period a year earlier when production totalled 2.8 million tonnes. Ferrexpo said production in the first quarter was a record for the company.
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Playtech will buy a 91.1% stake in online contract for difference and options broker TradeFX Ltd For up to EUR458 million, a deal that will push it into a new area and that it expects to boost earnings immediately. The company also said it still has substantial resources with with to pursue further acquisitions. The gaming software development company, said it will pay EUR208 million in cash for the TradeFX stake initially and could then pay up to a further EUR250 million depending on the performance of the business, which also provides forex trading platforms.
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Electrocomponents expects its pretax profit in the financial year that ended on Tuesday, before reorganisation costs and pension credits, to meet market consensus forecasts, which it put at GBP79.3 million. The consensus forecast pretax profit range for the year to end-March is GBP77.6 million to GBP82.8 million, according to Electrocomponents. The electronics and maintenance products distributor expects its full year gross margin to decline by around 1.3%, after it saw an improvement in its gross margin in its fourth quarter.
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Alliance Trust has reiterated its opposition to the proposals tabled by activist investor Elliott Advisors (UK) Ltd and urged its shareholders to vote against Elliott's requisition to appoint three additional directors to the board. Alliance Trust's reiteration of its stance came after Elliott Advisors, which holds a 12% stake in the trust, on Tuesday escalated the war of words between the two parties, issuing stern words about the performance, charges and dividends of the trust.
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Tate & Lyle has reiterated its guidance for the financial year that just ended, after it was hit by operational and supply chain issues in the first half and its SPLENDA Sucralose sweetener business continued to face an extremely competitive market. The sugar and sweeteners company reiterated the guidance it provided in February, saying it still expects adjusted pretax profit for the year to the end of March to be below the GBP230 million to GBP245 million guidance it provided in September 2014.
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AIM Movers
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Arcontech Group shares have risen sharply after it signed a contract for its Excelerator product covering a minimum of 200 licences for the Microsoft Excel-based add-in product. Densitron Technologies is also doing well after it agreed to surrender its lease for a property in Newcastle for GBP400,000, financed from an unsecured loan from its largest shareholder Peter Gyllenhammer. The loan has a coupon rate of 9% per year, and a repayment date up to end-March 2016. Crimson Tide is up after it said pretax profit rose in 2014, as a higher number of subscribers led to improved margins, and it said it remains encouraged by its prospects. 21st Century Technology is up after its pretax loss widened in 2014, but it expressed cautious optimism for its future. Koovs has fallen sharply after it said it will spend more on marketing this year than anticipated and expects the trend to continue, even as it said it expects sales to have tripled in the year to the end of March. Forbidden Technologies is down after its pretax loss widened in 2014, mostly as a result of significant investments it made during the year including a thwarted attempt to expand into the US. Red Rock Resources is another faller after it liquidated and fully repaid its loan facilities with YA Global, while MG Partners II Ltd converted USD120,000 of its outstanding USD335,000 balance of unsecured convertible notes into 121.7 million shares at the conversion price of GBP0.000665.
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Top Economics And General
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UKIP leader Nigel Farage has emerged as the bookies' favourite to win the first live televised debate of the 2015 General Election campaign on Thursday night, as allies of Conservative Prime Minister David Cameron hope the debate will devolve into a political slanging match, illustrating his argument that the election could produce a messy and unstable result for the country. Bookmaker William Hill makes Farage the 13/8 favourite to come out on top in the snap polls which will be published immediately following the first debate, which will involve seven party leaders. The Financial Times said UKIP has been slipping down opinion polls in recent weeks but Farage's populist style may prove highly effective within a debate context.
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Labour has moved to defend itself from criticism from the business community and has made a further effort to woo Scottish voters away from the Scottish National Party as the leaders of the seven main parties prepare for the first televised debate of the campaign on Thursday night. With campaigning currently focused on business, Labour has accused business critics of leader Ed Miliband of being self-interested Conservative Party backers, claiming a battle with some of the UK most senior executives "plays straight into our hands," the Financial Times reports.
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UK construction sector growth slowed more-than-expected in March due to a slower increase in output and new orders, while confidence rose to the highest level for just over nine years, survey data from Markit Economics showed. The Chartered Institute of Procurement & Supply/Markit construction Purchasing Managers' Index fell to 57.8 in March from 60.1 in the previous month. It was forecast to drop to 59.8. However, any reading above 50 indicates expansion in the sector. The latest reading signaled a strong rate of overall construction output growth, but was below the average for 2014 as a whole.
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Afternoon Watchlist (all times in BST)

13:30 US Challenger Job Cuts
13:30 US Jobless Claims
13:30 US Trade Balance
14:45 US ISM New York index
15:00 US Factory Orders
15:30 US EIA Natural Gas Storage change
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Tuesday's Key UK Corporate Events

No Events Scheduled
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Friday's Key Economic Events (all times in BST)

02:35 Japan Markit Services PMI
02:45 China HSBC China Services PMI
13:30 US Nonfarm Payrolls
13:30 US Unemployment Rate

Monday's Key Economic Events (all times in BST)

09:30 EU Sentix Investor Confidence
14:45 US Markit PMI Composite
14:45 US Markit Services PMI
15:00 US ISM Non-Manufacturing PMI
15:00 US Labor Market Conditions Index

Tuesday's Key Economic Events (all times in BST)

00:50 Japan JP Foreign Reserves
08:30 Germany Markit PMI Composite
08:30 Germany Markit Services PMI
08:45 Italy Markit Services PMI
08:50 France Markit PMI Composite
08:50 France Markit Services PMI
09:00 EU Markit PMI Composite
09:00 EU Markit Services PMI
09:30 UK Markit Services PMI
10:00 EU Producer Price Index
13:55 US Redbook index
15:00 US IBD/TIPP Economic Optimism (MoM)
16:00 US JOLTS Job Openings
20:00 US Consumer Credit Change

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