HSBC Holdings Share News (HSBA)

LONDON (Alliance News) - Marks & Spencer Group and Burberry are experiencing contrasting fortunes Wednesday, with M&S shares hitting the highest level since December 2007 as it continued to show signs of a long overdue turnaround, while shares in luxury brand Burberry fell as it cut its guidance due to currency fluctuations.

M&S posted profits that beat analysts' expectations as it discounted less and improved its product sourcing, and it further sweetened the news for shareholders by announcing a GBP150 million share buyback.

The clothing and food retailer reported a pretax profit for the year ended March 28 of GBP600.0 million, up 3.4% from the GBP580.4 million reported the year before and the highest pretax profit for three years.

Excluding items including restructuring costs and charges for insurance mis-selling provisions at M&S Bank, its closely-watched underlying pretax profit was GBP661.2 million, beating analysts' expectations of GBP648 million and marking the first increase in underlying pretax profit for four years.

Revenue remained flat at GBP10.3 billion, with a 0.7% sales increase in the UK offset by a 5.7% decline in international sales that was partly down to the geopolitical issues in Russia, Ukraine and Turey. However, gross margin improved strongly in its general merchandise business and also rose in its food business.

"We are transforming M&S into a stronger, more agile business - putting the right infrastructure, capabilities and talent in place to drive our strategic priorities," Chief Executive Marc Bolland said.

M&S will pay a total dividend of 18 pence, up 5.9% from the 17p paid the prior year, and said it will initiate "an ongoing programme of enhanced returns for shareholders" with a GBP150 million return of cash in the current year through share buybacks. It cited a further increase in free cash flow, which rose GBP96.3 million to GBP524.2 million.

Great rival Next has been hit with a GBP22.4 million tax bill after a court found the company had diverted profits made in the UK offshore in order to avoid paying tax, the BBC reported.

The court ruled Next diverted profits made in the UK to foreign subsidiaries in order to claim tax relief on overseas profits, using a so-called "rate-booster" scheme.

Shares in Burberry took a hit after it lowered its retail and wholesale profit guidance for its current financial year due to movements in foreign exchange rates and also cautioned that it is seeing "increased uncertainty" in some markets.

The fashion retailer said that if exchange rates remain where they are, it expects retail and wholesale profit in the current financial year to be around GBP10 million higher than at the prevalent exchange rates in its last year. That is GBP40 million lower than the guidance it gave in its trading update in April. It left all its other guidance unchanged, including the expectation that licensing revenue will fall 40% at constant exchange rates due to the expiry of Japanese licences.

Burberry also said it expects its adjusted pretax profit at constant exchange rates to be more weighted to the second half in the current year.

"At this early stage of the year, we are seeing increased uncertainty in some markets. Against this background, we will continue to manage our business dynamically - capitalising on the significant opportunities we have by channel, region and product to create long-term shareholder value," Chief Executive Christopher Bailey said in a statement.

It reported a pretax profit of GBP445 million for the year ending March 31, up from GBP444 million the year before, as strong demand for its heritage trench coats, cashmere scarves and ponchos helped drive revenue up 8% to GBP2.5 billion from GBP2.3 billion.

Power company SSE will be breathing a sigh of relief that there wasn't a different outcome to the UK election, after a big jump in profits in its retail unit offset a drop in profit in its wholesale division.

The company reported a pretax profit before exceptional items and remeasurements of GBP1.56 billion for the year ended March 31, up 0.9% from GBP1.55 billion a year earlier, as revenue rose to GBP31.65 billion from GBP30.58 billion. The profit figure met analysts' expectations.

Operating profit in the retail unit rose to GBP456.8 million from GBP327.1 million a year earlier, a level the company said had restored it to the profit levels it achieved in 20-12/13. Operating profit in the energy supply part of the retail business rose to GBP368.7 million from GBP246.2 million, which the company put down to cost efficiencies as well as November's gas and electricity tariff increase.

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Markets: London stock indices are mixed as fears about Greece's finances continue amid a busy day on the UK corporate front. The pound is up against the dollar after the Bank of England said members of its Monetary Policy Committee voted unanimously to keep UK interest rates unchanged.

US Stock futures are pointing to a broadly higher open on Wall Street. The DJIA and Nasdaq 100 are currently indicated to open up 0.1%, while the S&P 500 is set to open flat.

FTSE 100: up 0.2% at 7,006.31
FTSE 250: down 0.3% at 18,125.07
AIM ALL-SHARE: flat at 762.59
GBP: up at USD1.5529
EUR: down at USD1.1124
GOLD: flat at USD1,209.88 an ounce
OIL (Brent): up at USD64.84 a barrel
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Other Top Corporate News
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Hargreaves Lansdown reported an increase in assets under administration in the opening four months of 2015, bolstered by net inflows of GBP2.75 billion in a period including the crucial end of the tax year in the UK. In a statement, the retail fund supermarket said assets under administration amounted to GBP55.3 billion at the end of April, an increase from the GBP49.1 billion recorded at the end of 2014.
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Antofagasta Chairman Jean-Paul Luksic reiterated the company is aiming to produce around 695,000 tonnes of copper in 2015 as it continues to focus on reducing costs following on from the company's fall in earnings in 2014 amid a drop in copper prices. Luksic is due to speak at the company's annual general meeting later Wednesday, and will announce the company is aiming to produce the 695,000 tonnes of copper at a cash cost of USD1.40 per pound of copper, which would be lower than in 2014 when its cash cost averaged USD1.43 per pound. Antofagasta said it will continue to try to reduce the cash cost. That 695,000 tonne figure was originally announced in April after the company reduced its guidance from its full-year results in March, when it had said it would aim to produce around 710,000 tonnes of copper.
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Swiss bank UBS is to pay USD545 million to authorities in the US to settle an investigation into the alleged rigging of foreign exchange benchmarks, the first of a slew of fines due to be handed down to banks in the probe. The fine includes a USD342 million payment to the Federal Reserve, UBS said, though it will not be paying any fine to the Department of Justice. Another USD203 million penalty has been imposed after the bank's role in the foreign exchange rigging scandal breached an earlier agreement it had made with prosecutors in the US over the alleged rigging of Libor. The new settlement means UBS will also plead guilty to rigging Libor. UBS is one of five banks due to reach settlements with regulators in the US on Wednesday over the foreign exchange rigging probe, with Citigroup, JPMorgan Chase, The Royal Bank of Scotland Group and Barclays also expected to announce settlements later.
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HSBC Holdings' plans to ring-fence its retail banking operations have hit a hitch after the Bank of England's Prudential Regulation Authority indicated that a possible candidate to chair the ring-fenced bank wouldn't be able to take on the role, Sky News reported. HSBC's indicated to the regulator that it could want the chief executive of HSBC Bank PLC, Alan Keir, to become the chairman of the ring-fenced bank, Sky News said.
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Meanwhile, HSBC is to begin charging clients on deposits in some European currencies, the Financial Times reported. The move comes as banks look to protect their profit margins amid low or even negative interest rates set by central banks.
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The Italian antitrust authority has placed under investigation the Lega Serie A, two pay TV networks and a marketing company over an alleged scheme to lower television broadcast rights, the ANSA news agency reported. Police searched the offices of the Lega, Sky Italia, Mediaset and its controlled company, and media marketing firm Infront Italy earlier in the day. The searches stemmed from an investigation that the antitrust authority launched into last June's bid, which was won by Sky Italia and Mediaset. Sky Italia is owned by the UK's Sky.
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Intermediate Capital Group said it will return GBP300 million in capital to shareholders through a special dividend, as it reported higher assets under management and profit over its last financial year. In a statement, the specialist asset manager said it made a GBP178.5 million pretax profit in the year ended March 31, compared with GBP164.4 million in the prior year. Assets under management increased to EUR18.0 billion from EUR12.98 billion as fundraising inflows more than offset the outflows from realisations.
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Thomas Cook Group reported a narrowed pretax loss in the first half of its financial year, even though revenue fell, although it said current trading is performing above the levels of this time last year. The travel operator reported a pretax loss of GBP303 million in the six months to March 31, narrower than the GBP366 million reported in the same period the prior year. Revenue fell to GBP2.7 billion from GBP3 billion, although it did increase on a like-for-like basis by 1.2% as a result of growing new product and long haul sales.
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Zoopla Property Group reported higher profit for the first half of its financial year, as revenue was buoyed by higher revenue per agent and higher advertising revenue, and the company said it had stemmed the loss in agents that had been caused by the opening of a new rival property portal. The company, which is set to expand from its property sales and rentals portal into utility and financial services price comparison by buying uSwitch for up to GBP190 million, reported a pretax profit of GBP18.4 million for the six months to end-March, up from GBP16.3 million a year earlier, as revenue rose to GBP42.0 million from GBP38.3 million. Zoopla declared a maiden interim dividend of 1.0 pence a share.
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Soft drinks company Britvic said its pretax profit improved in the first half of its financial year despite a fall in revenue following an improvement in its gross margin, and the group hiked its dividend on the back of a confident outlook for the year. Britvic said its pretax profit in the 28 weeks to April 12 was GBP51 million, up from GBP45.3 million in the 28 weeks to April 13, 2014. On the back of the rise in profit, the group hiked its interim dividend by 9.8% to 6.7 pence per share, up from 6.1% for the first half of 2014.
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Bank of Georgia Holdings, the holding company for JSC Bank of Georgia, reported higher first-quarter pretax profit, as higher revenue in its banking and healthcare operations more than offset lower contributions from insurance and real estate. The holding company said it made a GEL73.2 million pretax profit in the three months ended March 31, compared with GEL63.9 million in the corresponding period of the prior year, even as impairment charges for loans to customers jumped to GEL38.9 million from GEL9.1 million.
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Morgan Advanced Materials affirmed its full-year expectations after saying trading in the first four months has been in line with its forecasts. The company says its like-for-like revenue in the four months to the end of April rose 1.9%, with its year-to-date book-to-bill ratio at the end of April at 1.07. Its outstanding order book was around 8% higher than at the same time a year earlier on a constant currency basis.
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Invesco Asset Management confirmed that it sold more shares than expected in FTSE 250-listed science and technology development and commercialisation company Allied Minds. Invesco Asset Management said on Tuesday it intended to sell 13 million shares in Allied Minds, but on Wednesday said it has sold 16 million shares in the company at 565 pence per share, raising GBP90.4 million.
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Great Portland Estates joined its peers in the UK commercial property sector in reporting higher returns and profits for its last financial year as the booming property market drive up the value of its portfolio and rental values. The real estate investment trust, which is focused on the supply-constrained and booming London property market, reported EPRA net asset value per share of 709 pence at the end of March, up 24.6% from a year earlier, while EPRA pretax profit grew 17.4% to GBP45.1 million. The growth was driven by 18.0% growth in the value of its portfolio and rental value growth of 10.3%.
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Cable & Wireless Communications reported higher operating profits and revenue for its last financial year, as it saw growth across its mobile, business and video businesses and continue to strip out costs, but said it has much more to do if it is going to realise the full potential of the business. The company reported earnings before interest, tax, depreciation and amortisation of USD585 million for the year to end-March, up from USD546 million a year earlier, as revenue rose 4% to USD1.75 billion from USD1.27 billion, its gross margin improved and it cut operating costs by 2%
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AIM Movers
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Cyan Holdings shares are up by a fifth after it received a letter of intent from Egypt-based El Sewedy Electrometer Group to supply its CyLec smart metering product for a contract El Swedey has won in Western Africa. The letter of intent says El Sewedy intends to appoint Cyan to provide the smart metering products for up to 200,000 customers over three years, a deal worth up to USD3 million to Cyan. Proxama is up after winning a five-year deal to provide software services for the Navy Federal Credit Union's 4 million-strong debit card portfolio. The company also said its pretax loss widened in 2014 as revenue ticked lower and it invested in its technology. Praetorian Resources shares are down by a third after it completed a discounted share placing, issuing 90.2 million shares at 2.5 pence each to raise GBP2.3 million to be used for working capital.
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Other Top Economics And General
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Bank of England policymakers unanimously voted to maintain its monetary policy stance at the meeting held early this month, the minutes of the meeting showed. The Monetary Policy Committee voted 9-0 to hold the key interest rate at a record low of 0.50% and asset purchase programme at GBP 375 billion. For two members, the immediate policy decision remained finely balanced between voting to hold or raise the bank Rate.
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UK households' finance outlook worsened for the first time in eight months in May, while their financial woes eased to a record low, results of a survey by Markit Economics and financial information provider Ipsos Mori revealed. The seasonally adjusted Markit Household Finance Index rose slightly to 45.8 in May from 45.7 in the previous month. A score below 50 suggests pessimism regarding finances among the UK households. However, the latest data pointed to the weakest squeeze on UK household finances since the survey began in early 2009.
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The European Central Bank's Governing Council will meet Wednesday to discuss whether to raise the collateral requirements for the emergency loans it gives to the Bank of Greece. The 25-member council, led by ECB President Mario Draghi, is set to meet in Frankfurt to decide whether to tighten the rules for the Emergency Liquidity Assistance, or ELA, for Greece. However, analysts expect ECB policymakers not to any take decision that could trigger a crisis. That said, pressure is mounting on the bank to get tough with Greece as the country veers towards a default amid the ongoing political crisis.
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The Greek government's parliamentary speaker said the struggling nation will not be able to make a payment to the International Monetary Fund on June 5 if there is no deal with its creditors by then, Reuters reported. "Now is the moment that negotiations are coming to a head. Now is the moment of truth, on June 5," Nikos Filis told ANT1 television. "If there is no deal by then that will address the current funding problem, they won't get any money."
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Germany's producer prices declined at a slightly faster-than-expected pace in April, figures from Destatis showed. The producer price index fell 1.5% year-over-year in April, just above economists' expectations for a 1.4% decrease. In March, prices had fallen 1.7%. Producer prices have been falling since August 2013.
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EU leaders are set to meet with their counterparts from six eastern countries in Riga this week, amid concern that the meeting could further inflame tensions with Russia. Their last meeting, held in Vilnius in 2013, triggered the current crisis in Ukraine, after the country's former president Viktor Yanukovych backed out of a deal on closer ties with the European Union. On Tuesday, Russian Foreign Minister Sergei Lavrov warned the EU during a trip to Brussels against steps that could harm Russian interests, adding that the bloc's relations with its eastern neighbours must not have negative consequences for Moscow. The EU's Eastern Partnership programme aims to encourage six former Soviet states - Armenia, Azerbaijan, Belarus, Georgia, Moldova and Ukraine - to undertake reforms, in return for closer relations and economic benefits.
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Iraqi authorities bowed to pressure from leaders in the western al-Anbar province and agreed to allow thousands of families fleeing Islamic State to enter the capital Baghdad. A security source told dpa that a bridge across the Euphrates river near Baghdad, where refugees have camped out for days since the jihadists captured al-Anbar's provincial capital Ramadi, would be opened to all civilians. Security forces had imposed strict security checks at the crossing, limiting the numbers of fleeing residents who have been able to cross, for fear that militants might infiltrate the capital.
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Efforts to reach 16 million Yemenis in need of aid were faltering, the United Nations said, as the capital Sana'a was hit by Saudi-led airstrikes for the first time since a five-day truce with Houthi rebels ended. Aid organizations have had to "stop delivery of some assistance activities initiated during the pause due to increased insecurity and limited humanitarian access," the UN Office for the Coordination of Humanitarian Affairs (OCHA) said. The UN also said it was pushing for renewed talks between the warring parties, as Arab media reported a peace conference could take place in Geneva on May 28.
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Afternoon Watchlist (all times in BST)

15:30 US EIA Crude Oil Stocks change
19:00 US FOMC Minutes
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Thursday's UK Corporate Events

Caledonia Investments - Full Year Results
Qinetiq Group - Full Year Results
Royal Mail Group - Full Year Results
Shaftesbury - Half Year Results
Lomard Risk Management - Full Year Results
Bwin.Party Digital Entertainment - Q1 Interim Management Statement
Henry Boot - Trading Statement
National Grid - Full Year Results
Rank Group - Interim Management Statement
Shanks Group - Full Year Results
Inchcape - Q1 Interim Management Statement
HICL Infrastructure Company - Full Year Results
Amlin - Interim Management Statement
Daily Mail and General Trust - Half Year Results
Dairy Crest - Full Year Results
Darty - Trading Statement
Electrocomponents - Full Year Results
Investec - Full Year Results
Local Shopping REIT - Half Year Results
Mothercare - Full Year Results
United Utilities Group - Full Year Results
Assura - Full Year Results
Smiths Group - Trading Statement
Young & Co's Brewery - Full Year Results
SSP Group - Half Year Results
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Thursday's Key Economic Events (all times in BST)

00:50 Japan Foreign investment in Japan stocks/bonds
02:35 Japan Nomura/ JMMA Manufacturing PMI
02:45 China HSBC Manufacturing PMI Preliminary
08:00 France Markit PMI Composite Preliminary
08:30 Germany Markit PMI Composite Preliminary
09:00 EU Current Account
09:00 EU Markit PMI Composite Preliminary
09:30 UK Retail Sales
11:00 UK CBI Industrial Trends Survey - Orders
12:30 EU ECB Monetary Policy Meeting Accounts
13:30 US Chicago Fed National Activity Index
13:30 US Jobless Claims
15:00 US Existing Home Sales
15:00 US Philadelphia Fed Manufacturing Survey
15:00 US CB Leading Indicator
15:00 EU Consumer Confidence Preliminary
15:30 US EIA Natural Gas Storage change
16:00 US Kansas Fed manufacturing activity
18:30 US Fed's Stanley Fischer speech
18:30 EU ECB President Draghi's Speech
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