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LONDON (Alliance News) - GlaxoSmithKline Wednesday posted a drop in pretax profit for 2014, hit by lower revenue for asthma and chronic obstrucitve pulmonary disease treatment Advair, although it promised a GBP4 billion return to shareholders from its transaction with Novartis AG.

It also said it was continuing to evaluate the possibility of an initial public offering for a minority stake in its HIV joint venture ViiV Healthcare.

Glaxo posted a pretax profit of GBP2.97 billion for the three months to end-December, compared with GBP6.65 billion in 2013, as revenue fell to GBP23.01 billion from GBP26.51 billion. For its fourth quarter it posted a pretax profit of GBP531 million, down from GBP2.55 billion in the previous year.

Sales of Advair were down 25% in the US for the full year, including a 27% fall in the fourth quarter.

It posted core earnings per share of 95.4 pence at constant currency, compared with 112.2 pence in 2013. It had previously guided that its 2014 core earnings per share would be broadly similar to 2013 at constant currencies.

The pharmaceutical giant proposed a total dividend of 80 pence, up from 78 pence, and said it expects to maintain its dividend for 2015 at the same level. It also announced plans to return GBP4 billion of net proceeds from its transaction with Novartis to shareholders in 2015.

Glaxo expects the headwinds it faced in 2014 to continue into the first half of 2015, although it expects a stronger performance during the second half.

AIM-listed GW Pharmaceuticals, which also reported at 1200 GMT, reported a wider net loss for the first quarter of its financial year as it increased spending on research and development, but revenue rose on the back of bigger sales of its main product, and it said it was confident in its prospects given its pipeline of trials this year.

Sky posted a big increase in pretax profit for the first half of its financial year, boosted by a rise in revenue and exceptional gains from the sale of its stakes in ITV PLC and the National Geographic Channel.

In its first results incorporating its acquisitions of Sky Italia and a majority stake in Sky Deutschland, Sky posted a pretax profit of GBP1.21 billion for the half year to end-December, compared with GBP507 million a year before, as revenue rose to GBP4.30 billion from GBP3.67 billion.

Profit was boosted by a GBP492 million gain from the sale of its 6.4% stake in ITV and a GBP296 million gain from the sale of its stake in the National Geographic Channel.

The company added 204,000 new retail customers in the UK in its second quarter, which it said is its highest growth in nine years. Analysts had expected customer growth of 124,000 in the UK. Within this, Sky posted 106,000 net broadband additions. Analysts had expected 99,000 broadband additions.

Rival BT Group said last Friday that it had added 119,000 retail broadband customers during its third quarter, and 209,000 retail fibre customers, takings its customer base to over GBP2.7 million.

Sky cited strong growth from its over-the-top service NOW TV, although it did not detail what level of the customer additions came from this product. It did say that it had seen a "record quarter of growth" for NOW TV due to partnerships with retailers including Dixons Carphone and commercial partnerships with Google and Vodafone Group.

Hargreaves Lansdown is the worst-performing stock in the FTSE 100 after it reported a drop in first-half pretax profit despite a rise in assets under administration over the course of the six months, in what it described as a "muted" time for stocks and retail investors.

The investment management product provider said pretax profit declined to GBP101.9 million in the six months ended December 31 from GBP104.1 million in the corresponding period last year. Assets under administration rose to GBP49.1 billion at the end of 2014, from GBP46.9 billion six months earlier and GBP43.4 billion at the same stage last year.

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Markets: London stock indices trade lower, as a downturn in the price of oil offset the positive effect from the UK Markit Services Purchasing Managers' Index beating expectations. Stocks got a small boost from China's central bank, which cut its banks' reserve ratio by 0.5 percentage point to 19.5%. The pound is up against the dollar following data showing that UK service sector expanded more than expected in January led by acceleration in new business expansion.

US stocks are set for a lower open, with stock futures indicating the DJIA will open down 0.2%, and the S&P 500 and Nasdaq 100 down 0.4%.

FTSE 100: down 0.7% at 6,826.67
FTSE 250: down 0.4% at 16,508.87
AIM ALL-SHARE: flat at 693.41
GBP-USD: up at USD1.5232
EUR-USD: down at USD1.1454
GOLD: up at USD1,267.69 an ounce
OIL (Brent): down at USD56.60 a barrel
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Other Top Corporate News
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Vodafone Group is set to make its first move into the "multiplay" market of bundled telecoms and internet services in the next few weeks, the Financial Times reported. Vodafone will unveil plans in the next couple of weeks for a push into the UK consumer broadband market in a bid to counter the shift by rivals BT Group and Sky to add mobile to their fixed line services.
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GlaxoSmithKline has appointed banks as financial advisers on its HIV medicines joint venture ViiV Healthcare, Sky News reported. Sky News said it has learnt that Glaxo has hired Citigroup, Goldman Sachs and Morgan Stanley as financial advisers on the unit. It says the appointment of the banks will fuel the prospect of Glaxo floating the division, which analysts believe could be worth at least GBP17 billion. Glaxo owns 78% of the joint venture, with the remainder held by Pfizer Inc and Shionogi & Co.
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Standard & Poor's late Tuesday cut its long-term credit ratings on a number of European lenders, including Barclays, HSBC, Lloyds Banking Group, Royal Bank of Scotland Group and Standard Chartered, because the ratings agency thinks state aid in the event of a crisis is now unlikely due to measures taken by European and domestic authorities. S&P downgraded the long-term credit ratings of Barclays and Lloyds to BBB from A-, while RBS' long-term credit rating was downgraded by two notches to BBB-. HSBC's long-term credit rating was lowered to A from A+, while Standard Chartered's was downgraded to A- from A.
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No progress was made in negotiations between Royal Dutch Shell and union leaders in the US on Tuesday, Reuters reported, as they continued haggling over a new wage contract for US refinery workers who have been on strike since the weekend. The two camps have been at an impasse since the United Steelworkers union called for industrial action on Sunday for the first time since 1980 at nine plants, which represent a combined 10% of US refining capacity, after saying Shell had walked away from the negotiating table when the talks broke down.
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Interdealer broker ICAP said it will challenge the European Commission's decision to fine it EUR15 million for "participation in several cartels in Yen interest rate derivatives". According to the European Commission, the fine was due to a breach of antitrust rules by facilitating several cartels in the sector of Yen interest rate derivatives. "Today's decision to fine the broker ICAP sends a strong signal that assisting companies in their cartel activities has severe consequences. It marks the successful completion of our antitrust investigation in the Yen interest rate derivatives sector – but not the end to our efforts to fight anticompetitive practices in financial markets," Commissioner Margrethe Vestager, who is in charge of competition policy, said in a statement.
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Synergy Health said it is trading in line with its expectations for the year on the back of a rise in revenue in the first nine months. The FTSE 250-listed company, which provides outsourced support services to healthcare-related markets, said its revenue for the first nine months of its financial year to December 28 was up 5.7% to GBP303.1 million. It said its revenue was held back in part by sterling strength, with constant currency revenue for the period up 9.6%.
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Private equity firm Clayton, Dubilier & Rice has sold a further 12% stake in B&M European Value Retail, the discount retailer chaired by former Tesco Chief Executive Terry Leahy, taking its holding down to 17.4%, Bank of America Merrill Lynch said. Clayton, Dubilier & Rice and the Arora family listed the company on the London Stock Exchange in June last year, but retained a significant stake. According to Bank of America Merrill Lynch, which jointly conducted the new placing by the private equity firm alongside Deutsche Bank, it has now sold a further 120 million B&M shares for 320 pence a share, raising gross proceeds of GBP384 million. The sale means that B&M's free float will rise to above 50%, meaning that it is eligible to be included in a FTSE index.
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Wizz Air Holdings set out its intention to go public in the first quarter of this year after plans to list in London fell through last year, as window and door maker Eurocell and support services group Lakehouse also announced intentions to float on the main market. In addition, tool and equipment hire business HSS Hire Group, which last month set out plans to list on the main market, priced its initial public offering at the lower end of its previously disclosed range of 210 pence to 262 pence per share, meaning it will have a market capitalisation of GBP325 million when conditional dealings begin. Lakehouse shares are expected to begin trading in March.
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Ryanair Holdings reported strong growth in passenger numbers in January, and said its planes were more full than a year earlier, confirming a trend it reported on Monday when it reported its third quarter results. Europe's largest low-cost carrier said passenger numbers were up by 1.3 million on the year in January to over 5.98 million, while its load factor rose to 83%, from 71% a year earlier. Passenger numbers in the 12 months to the end of January were 87.8 million, up 8% on the previous 12 months.
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AIM Movers
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Camkids Group shares are up by more than a third even though it expects its results for the year to miss market expectations after a number of orders were cancelled in December, exacerbating existing problems the company was facing from the weaker economic environment in China. The company said it thought its shares were being undervalued. Dillistone Group is doing well after it said it expects its full year results for 2014, excluding acquisition related items, will be at a similar level to 2013, and said it enters 2015 with a stronger pipeline. The company said order intake in its Systems Division rose more than 20% in the fourth quarter of 2014, after it won more new business contracts in December than it had in any month of the last two years. Nostra Terra Oil and Gas Co is up after it said it placed four new wells into production during the fourth quarter which significantly increased production and said although its partners are cutting back on drilling activity, it will take advantage of the low oil price to try and secure further growth opportunities. Mosman Oil and Gas is also up after it started flow testing on the Crossroads-1 well at its Petroleum Creek project in New Zealand and received the technical report on the cores and cuttings from the 2014 drilling programme at Crestal-1 and Crestal-2. Craven House Capital shares are down after talks over a potential investment ended.
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Top Economics And General
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China's central bank lowered banks' reserve requirement ratio by 0.5 percentage point in order to support lending. The reserve requirement ratio of banks was reduced to 19.5% with effect from February 5, the People's Bank of China said in a statement. The ratio for the Agricultural Development Bank of China was reduced by 4 percentage points. The bank said it will continue to implement prudent monetary policy.
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Greek Finance Minister Yanis Varoufakis describes his hour-long meeting with European Central Bank chief Mario Draghi in Frankfurt as "constructive." He says he told Draghi the economic crisis in Greece could not be treated using the methods prescribed under the terms of the country's bailout programme. "The programme has fueled a deflation crisis in the country," says Varoufakis.
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The European Central Bank is showing resistance to a key element of the proposed funding plan tabled by the new Greek government, the Financial Times reported, potentially meaning Greece could be left with no source of outside funding when its international bailout expires at the end of this month. Greek Finance Minister Yanis Varoufakis has proposed to European officials that the country will raise EUR10 billion by issuing short-term Treasury bills as "bridge financing" in order to tide Greece over for the next three months while it works to agree a new bailout from its Eurozone partners. But the ECB is understood to be unwilling to approve the debt sale, resisting any move to raise a EUR15 billion ceiling on t-bill issuance to EUR25 billion, as has been requested by Athens, according to two officials involved in the talks.
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The UK service sector expanded more than expected in January as new business rose at a faster pace, survey data from Markit showed. The Markit/Chartered Institute of Purchasing & Supply Purchasing Managers' Index rose to 57.2 in January from 55.8 in December. The score was forecast to rise to 56.3. Growth has now been recorded for 25 months in succession. New business received by UK service sector companies increased at a marked and accelerated pace in January. Backlogs increased consecutively for 22 months, and some respondents blamed a lack of staff at their units as a reason for further backlog growth.
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The eurozone private sector expanded at the fastest pace since July last year as output expanded in Germany, Italy and Spain. But the downturn in the French economy extended into its ninth month. The final eurozone composite output index rose to 52.6 in January from 51.4 in December. It was also above the flash reading of 52.2. The headline eurozone index has now signalled expansion for 19 months running. Output rose across the manufacturing and service sectors. The final services PMI climbed to 52.7 from 51.6 in December. The flash estimate showed a reading of 52.3 for January.
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Shop prices in the UK were down 1.3% on year in January, the British Retail Consortium said. That was slower than the 1.7% drop in December and the forecasts for a decline of 1.6%. Food prices decreased 0.5%, marking the biggest decline in eight years.
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Eurozone retail sales grew at a slower pace in December, Eurostat showed. Retail sales grew 0.3% month-on-month in December, slower than November's 0.7% increase. Nonetheless, this was the third consecutive rise in sales and better than economists' forecast for a flat growth. Sales of food products and non-food products gained 0.3% each. On a yearly basis, retail sales growth accelerated to 2.8% from 1.6% in November. The growth rate exceeded a 2% rise forecast by economists.
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Afternoon Watchlist (all times in GMT)

12:00 US MBA Mortgage Applications
13:15 US ADP Employment Change
14:45 US Markit Services/Composite PMI
15:00 US ISM Non-Manufacturing PMI
15:30 US EIA Crude Oil Stocks change
17:45 US FOMC Member Mester speech
22:50 Japan Foreign bond/stock investment
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Thursday's Key UK Corporate Events

Fusionex International - Full Year Results
McBride - Interim Results
Compass Group - Interim Management Statement
Beazley - Full Year Results
AstraZeneca - Full Year Results
EasyJet - January Traffic Statistics
Dairy Crest Group - Interim Management Statement
Future - Interim Management Statement
Enterprise Inns - Interim Management Statement
Grainger - Interim Management Statement
Smith & Nephew - Full Year Results
Vodafone Group - Interim Management Statement
Avanti Communications Group - Half Year Results
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Thursday's Key Economic Events (all times in GMT)

07:00 Germany Factory Orders
08:00 EU Economic Bulletin
10:00 US Federal Reserve Bank of Boston President Rosengren Speech
12:00 UK BoE Interest Rate Decision
12:30 US Challenger Job Cuts
13:30 US Initial/Continuing Jobless Claims
13:30 US Trade Balance
13:30 US Nonfarm Productivity Preliminary
15:30 US EIA Natural Gas Storage change
23:50 Japan JP Foreign Reserves
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