IAE.L Share News (IAE)

LONDON (Alliance News) - Kingfisher shares have hit a nine-month high Tuesday after the company's new chief executive laid out her plans for the business, including a revamp of its UK portfolio towards Screwfix, and bringing together the company's supply chain and buying operations using a new central IT system.

Chief Executive Véronique Laury, who took the helm from Ian Cheshire in December, said her initial plans include shutting about 60 B&Q stores in the UK, opening the same number of Screwfix stores, closing its "few" unprofitable stores elsewhere in the business, revitalising other stores, rolling out a new IT platform based on SAP software, as well as putting a new management team in place.

Kingfisher reported a drop in sales and profit for its last financial year which it blamed on a slower French market and the strength of sterling. Pretax profit fell to GBP644 million for the year to end-January, down 15% from GBP759 million a year earlier, as revenue dropped to GBP10.97 billion from GBP11.13 billion. Its closely-watched adjusted pretax profit dropped to GBP675 million, from GBP730 million.

It said the strength of the pound knocked GBP34 million off earnings abroad once they were translated back to sterling, while it also booked GBP22 million in charges for development activities in Romania, Portugal and Germany.

It said total sales would have been up 2.9% if exchange rates had remained constant over the year, with 5.5% growth in the UK and Ireland and 5.0% growth in its international markets offsetting a 1.0% fall in France.

It sweetened the news of the profit fall by raising its full-year dividend and saying it will pay out a further GBP200 million to shareholders via a capital return in the current financial year. It had returned GBP100 million through a special dividend and GBP100 million through a share buyback in the last financial year.

Laury is planning a swathe of changes at the company, which Monday pulled out of a deal to expand its French operations by buying Mr Bricolage after running into opposition from the board and a major shareholder of the French company. The new CEO said she is "not worried" about the failure of the deal.

"This will involve taking what is essentially a locally managed set of businesses and creating instead a single, unified company where customer needs come first," Laury said.

Kingfisher said that out of the 393,000 products sold across the company, only 7,000 products or 7% of sales are currently sold in at least two operating companies. A large proportion of the total also relates to delisted and ex-promotional ranges.

"We believe our plans will drive an increase in the value of our business for shareholders, with improved financial metrics through higher sales and lower costs, whilst at the same time optimising the generation and use of cash," Chief Financial Officer Karen Witts said.

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Markets: London's stock indices opened higher, but have been on a gradual downward path since then as investor sentiment was again hit by concerns over whether Greece can reach an agreement with its European Union creditors. The pound is down against the dollar despite data showing that UK economy grew more than the prior estimate in the fourth quarter.

US stock futures point to a lower open, with the DJIA, S&P 500 and Nasdaq 100 set to open down 0.5%.

FTSE 100: down 1.4% at 6,795.40
FTSE 250: down 0.5% at 17,118.76
AIM ALL-SHARE: down 0.4% at 716.74
GBP-USD: up at 1.4806
EUR-USD: down at 1.0772
GOLD: up at USD1,186.82 an ounce
OIL (Brent): down at USD55.02 a barrel
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Other Top Corporate News
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Lloyds Banking Group said it has won permission from Bank of England regulators to redeem some of the enhanced capital notes issued to provide it with an important source of capital during the financial crisis, but has postponed the action to a later time. About GBP3.3 billion of the notes were left outstanding after GBP5.0 billion of the notes originally issued in 2009 and 2010 were exchanged into additional tier 1 securities and cash in March and April of 2014. The outstanding notes carry coupons ranging from as low as 6.4390% to as high as 16.1250% in an interest rate environment in which central banks have set rates at historic lows or even in negative territory. Some of the outstanding notes are due to mature as late as 2032.
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BT Group and Virgin Media have written a letter to media and communications regulator Ofcom, arguing any attempt to open up high-speed broadband networks to rivals will result in higher prices and lower investment in the UK, the Financial Times reported on Monday. The pair, in a letter seen by the FT and also signed by regional broadband company Kcom Group, warned any regulatory changes to the business broadband market may lead to higher prices and "significant regulatory uncertainty, undermining the return on sunk investments and therefore disincentivising future infrastructure investments".
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Marston's said it has struck a deal to acquire the beer division of Daniel Thwaites for GBP25.1 million in cash, an acquisition it expects to boost earnings right away. Marston's has been handling the brewing of Thwaites' beers since 2014, including its Wainwright and Lancaster Bomber ales. It estimates the division generated earnings before interest, taxation, depreciation and amortisation of around GBP7 million in the year to the end of December. Marston's expects the deal to earnings-enhancing in the first full year of ownership and expects the division to contribute GBP1.5 million to its pretax profit in the current financial year to October.
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Mitie Group expects its headline operating profit for the year end-March to be slightly below current market expectations, as a result of market pressures in its homecare and social housing businesses caused by local authority spending cuts. The outsourcing company expects its full year revenue to be broadly in line with market expectations, driven by a strong performance from its facilities management business which won a contract extension with Lloyds Banking Group last December, but its homecare and social housing businesses have faced further pricing pressures in the second half of the year.
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Thomas Cook said it is trading in line with management's expectations for its current financial year, having sold almost all the winter season holidays and more than half of the summer season. It said the UK business continues to trade ahead of last year, with "significant" bookings growth driven by robust demand particularly for its Winter Sun holidays, and while trading in Continental and Northern Europe is tough compared with last year's strong performance, it has improved since the first quarter.
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RPC Group expects its revenue and adjusted operating profit to be in line with its expectations and significantly ahead year-on-year despite the impact of the strength of sterling against the euro. It expects revenue to be boosted by organic growth, the conclusion of its short-term strategic programme and the contribution from acquisitions. RPC said the financial year benefited from the time lag in passing on declining polymer prices to its customer base, though this was offset by the strength of sterling against the euro.
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Amec Foster Wheeler has won a nine-year contract worth up to GBP15 million a year to provide project management services to all of EDF Energy's UK nuclear power stations as well as its technical offices in Gloucester and East Kilbride.
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John Wood Group has been awarded a five-year, multi-million dollar deal by Total SA to deliver engineering, procurement, construction and commissioning services to four offshore assets and two onshore facilities in the UK continental shelf. The contract, effective immediately, continues Wood Group PSN's 12 year history of providing these services to the Alywn, Dunbar, Elgin and Franklin platforms and the St Fergus Gas Terminal, Wood Group said in a statement. The new contract, which also covers support for the Shetland Gas Plant, the onshore receiving facility for Laggan Tormore that starts production later in 2015, includes the option for two one-year extensions, it added.
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Grainger said Chief Executive Andrew Cunningham will retire at the company's next Annual General Meeting in February 2016 after seven years in the role, and it is starting to search for suitable candidates to replace him. It added that incoming Chairman Ian Coull will also take a leave of absence from its board after taking further medical advice. Senior Independent Director Margaret Ford has been made permanent chairman with immediate effect.
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AIM Movers
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China New Energy shares are by more than a quarter after it said the fall in the oil price has had a negative impact on demand for biofuel and biorefineries, but its projects are proceeding broadly as planned. Richland Resources is up after it launched a new branding campaign for its gemstones and sapphires and sales will start in the second quarter, a move that it hopes will allow it to be able to provide customers with certainty over the origin of the stones. Premaitha Health is up after it signed a collaboration deal with Centrum Badan DNA Group in Poland for its non-invasive prenatal IONA test. Ithaca Energy is another gainer after it swung to a pretax loss in 2014 as its revenue was hit by the falling oil price in the second half of the year and as it booked a massive impairment charge, but its production increased to more than 12,500 barrels per day in the first quarter of 2015, in line with its full year production guidance of 12,000 per day. It added its operating costs have been brought down to around USD40 per barrel in the first quarter, with scope to further reduce these costs. Botswana Diamonds shares are down after it conditionally raised GBP282,500 via a share issue, money it will use to fund its development projects in Botswana. The company has issued 28.3 million shares at 1 pence per share. Azonto Petroleum is another faller after it said one of its Ivory Coast projects will be delayed, even as it made progress on other parts of its operations in the country, and its pretax loss for 2014 widened significantly due to an impairment charge on the Accra Block project in Ghana. Altona Energy is down by a quarter after it reached an agreement with Wintask Group Ltd and Sino-Aus Energy Group Ltd to alter the terms of their joint venture agreement. The main focus of the joint venture agreement will now move towards underground coal gasification, rather than coal-to-methanol, coal chemical and synthetic gas production. DDD Group is down after it said it will receive GBP25,000 less in proceeds from its share placing due to broker Hume Capital Securities having fallen into administration. Rose Petroleum is down sharply after it said the initial results from the Mancos Shale play in Utah have reiterated the strong potential of the prospect, although the conventional intervals at the site were not deemed commercially viable. Northern Petroleum is also down after it said it is working to ramp up production capacity at its Canadian operations, but is also conducting a technical review of the whole prospect in an effort to allow it to redevelop it economically in light of the oil price decline and said drilling of the latest well resulted in a flow with a high water cut meaning the well is currently uneconomic. Churchill Mining is down as it continues to be locked in a court case with the Indonesian government over assets in the country, with the next development not due to take place until August, and said it is also now in a regulatory spat after the London Stock Exchange accused the company of breaching AIM rules.
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Other Top Economics And General
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The UK economy grew more than the prior estimate in the fourth quarter, according to the latest report released. Gross domestic product grew 0.6% sequentially in the fourth quarter, revised up from 0.5% published on February 26, the Office for National Statistics said. The growth was thus unchanged from the 0.6% expansion seen in the third quarter. Similarly, the annual growth for the fourth quarter was revised to 3% from 2.7%. The growth rate accelerated from 2.8% in the prior quarter.
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Consumer confidence in the UK rose to a 12-year high in March, the latest survey from GfK revealed on Tuesday, with an index score of +4. That beat forecasts for +2 and was up from +1 in February. "If people warm to it over the next few weeks then we may well see a further increase in the index next month," said Nick Moon, GfK's managing director of social research.
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Germany's jobless rate fell to a record low in March, the Federal Labor Agency reported. The unemployment rate dropped to a seasonally adjusted 6.4% in March from 6.5% in February. The rate came in line with economists' expectations. The number of people out of work declined by seasonally adjusted 15,000, which was bigger than an expected fall of 12,000.
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Afternoon Watchlist (all times in GMT)

13:50 US Fed's Lockhart speech
13:55 US Redbook index
14:00 US FOMC Member Mester speech
14:00 US S&P/Case-Shiller Home Price Indices
14:45 US Chicago Purchasing Managers' Index
15:00 US Consumer Confidence
20:00 US Fed's George Speech
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Wednesday's Key UK Corporate Events

ASOS - Half Year Results
Evraz - Full Year Results
FirstGroup - Trading Update
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Wednesday's Key Economic Events (all times in GMT)

00:50 Japan Tankan Large Manufacturing Outlook
02:00 China NBS Manufacturing/Non-Manufacturing PMI
02:35 Japan Nomura/JMMA Manufacturing Purchasing Manager Index
02:45 China HSBC Manufacturing PMI
06:00 Ireland Purchasing Manager Index Manufacturing
06:00 Japan Vehicle Sales
08:45 Italy Markit Manufacturing PMI
08:50 France Markit Manufacturing PMI
08:55 Germany Markit Manufacturing PMI
09:00 EU Markit Manufacturing PMI
09:30 UK Markit Manufacturing PMI
12:07 US MBA Mortgage Applications
13:15 US ADP Employment Change
14:00 US FOMC Member Williams speech
14:45 US Markit Manufacturing PMI
15:00 US Construction Spending
15:00 US ISM Manufacturing PMI
15:30 US EIA Crude Oil Stocks change
15:30 US Fed's Lockhart speech
18:30 US Total Vehicle Sales
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