International Airlines Share News (IAG)

LONDON (Alliance News) - International Consolidated Airlines Group shares Friday hit their highest level since it was created in January 2011, after it reported strong growth in 2014 operating profit as fuel costs fell and its Spanish airline Iberia swung to a profit, and said profit would rise sharply in 2015.

The parent company of British Airways and Spanish airlines Iberia and Vueling, which is also trying to acquire Irish flag carrier Aer Lingus, reported a closely-watched operating profit excluding exceptional items of EUR1.39 billion for 2014, up from EUR770 million a year earlier, as revenue rose 8.0% to EUR20.17 billion. Its net profit rose to EUR1.00 billion, from just EUR147 million in 2013.

Spanish airline Iberia, which has been the focus of the group's non-fuel cost-cutting efforts, swung to an operating profit of EUR50 million, compared with a loss of EUR166 million in 2013. British Airways, which was restructured previously to bring down the cost base, powered ahead with operating profit rising to EUR1.22 billion, from EUR762 million in 2013. The only blot on the copy book was that Vueling's profit growth stalled, with operating profit up just slightly to EUR141 million, from EUR139 million.

Chief Executive Willie Walsh was at pains to stress that the improvement was mainly about the measures the group is taking to cut operating costs and grow, not just about the fall in oil prices. In fact, like peers, IAG is only feeling some of the benefit of the recent sharp fall in the oil price because of fuel price hedging it had previously done as well as due to shifts in foreign exchange rates.

Still, it now expects its 2015 operating profit to grow to more than EUR2.2 billion, driven partly by a 5.5% capacity increase and further unit operating cost reductions. Fuel costs for the year will only fall slightly, to about EUR5.9 billion from nearly EUR6.0 billion in 2014, partly because of the capacity increase.

IAG didn't say anything new about its takeover bid for Aer Lingus.

Lloyds Banking Group will return to paying dividends for the first time since it was rescued by UK taxpayers during the financial crisis, as a further improvement in the lender's profit and capital position cemented the evidence that the government can continue to return the lender to full private ownership.

Lloyds said it made a GBP1.8 billion pretax profit in 2014, compared with a GBP415 million pretax profit in the prior year, clearing the way for the bank to pay a symbolic dividend of 0.75 pence per share for 2014, amounting to GBP535 million. It said it is aiming to move to a dividend payout ratio of at least 50% of sustainable earnings in the medium term.

However, the list of regulatory and conduct costs that have been a source of shame for Lloyds and the wider banking sector continued to hold back progress last year, with a further GBP700 million provision set aside in the fourth quarter for the expected costs of payment protection insurance compensation.

While the overall provision for PPI was reduced by 28% to GBP2.2 billion in 2014, Lloyds has now set aside GBP12.03 billion to pay for the costs of the insurance mis-selling scandal. The bank said that companies managing claims have shown a "more sustained" activity level, meaning that complaints will decline at a slower pace than previously expected.

Lloyds' results also were marred by a GBP925 million provision for an assortment of fines and regulatory matters, including a GBP217 million settlement agreed in July with UK and US authorities over the manipulation of key benchmark rates.

But on an underlying basis, which also strips out the costs of carving out and supporting TSB Banking Group, as well as costs of asset sales and other items, profit rose by 26% to GBP7.8 billion.

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Markets: London stock indices are lower, with the focus again on the large amount of individual stock news.

Wall Street is set for a lower start, with stock futures indicating that the DJIA, S&P 500 and Nasdaq 100 will all open down 0.1%.

FTSE 100: down 0.2% at 6,936.04
FTSE 250: down 0.2% at 17,223.02
AIM ALL-SHARE: down 0.1% at 712.20
GBP-USD: up at 1.5439
EUR-USD: up at 1.1227
GOLD: down at USD1,208.95 an ounce
OIL (Brent): up at USD61.13 a barrel
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Other Top Corporate News
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Royal Bank of Scotland Group's Coutts private banking business is being investigated by German authorities over allegations of aiding client tax evasion, Sky News reported. Sky said Coutts has confirmed the investigation is focusing on its Swiss operation and was concentrating on both the wealth business and on current and former employees.
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Barclays is set to more than double its provision to cover allegations of foreign exchange market manipulation when it reports annual results next week, Sky News reported. According to the report, Barclays' current GBP500 million provision over the forex rigging scandal will be increased as a settlement with a number of US authorities draws nearer. Citing insiders, the report said that a settlement involving the Department of Justice, the New York State Department of Financial Services could arrive as early as the end of March. Separately, a Financial Times report said that a probe by New York’s Department of Financial Services is holding up settlement of the manipulation allegations.
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Old Mutual said its focus in 2015 will be on integrating a series of acquisitions as the Anglo-South African financial services company reported flat adjusted pretax operating profit as a result of a fall in the average rate of the rand against its sterling reporting currency last year. The company said its adjusted pretax operating profit was flat at GBP1.6 billion in 2014, but would have shown a 16% increase if exchange rates had remained constant. On an adjusted basis, each of Old Mutual's core operations reported pretax operating profit. Increases in emerging markets, wealth and institutional asset management more than offset a drop in Nedbank, the group's 52% owned banking subsidiary in South Africa.
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Publisher Pearson raised its dividend for 2014 as it posted earnings per share slightly ahead of its previous guidance, and announced that it will appoint Coram Williams, currently chief financial officer of its book publishing joint venture Penguin Random House, as its new chief financial officer. The Financial Times owner proposed a final dividend of 34.0 pence, taking its total dividend for the year to 51.0 pence, up from 48.0 pence a year before. It posted adjusted earnings per share of 66.7 pence, down from the 70.1 pence it posted in 2013, but ahead of its previous guidance of 66.0 pence.
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The United Steelworkers Union and representatives for several US-based refineries are understood to have held discussions on Thursday over a possible resumption of face-to-face talks with Royal Dutch Shell in order to bring a 26-day strike to an end, Reuters reports. No date had been set as of Thursday for resuming direct meeting with Shell Oil Co, Reuters said, citing two people familiar with the discussions. Shell Oil is representing the refiners in the talks.
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Royal Dutch Shell said its Pearl gas-to-liquids plant in Qatar has now entered planned maintenance, with one of the two trains at the plant set to be down for about two months. The plant produces cleaner-burning diesel and aviation fuel, oils for advanced lubricants, naphtha used to make plastics and paraffin for detergents. It makes enough diesel to fill over 160,000 cars a day and enough synthetic oil each year to make lubricants for more than 225 million cars, according to Shell.
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Mining giant Rio Tinto said it is streamlining its organisational structure as part of its efficiency and cost drive, resulting in the departure of the head of its energy business. Rio Tinto said Harry Kenyon-Slaney will leave the business as it condenses its assets into four product groups: Aluminium, Copper and Coal, Diamonds and Minerals, and Iron Ore. Copper chief executive Jean-Sébastien Jacques will lead the newly combined copper and coal product group. Uranium will be added to the Diamonds and Minerals product group, under the leadership of product group chief executive Alan Davies.
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Intu Properties reported growth in property valuations and total returns for 2014, although its underlying earnings per share fell due to a drop in like-for-like net rental income. The shopping centre and retail space owner and operator, which has the Trafford Centre, Lakeside the Metrocentre in its portfolio, said the valuations of its property rose 8.2% to GBP648 million in 2014, outperforming the IPD monthly retail index which increased 7.3%. Its net asset value per share rose to 379 pence, a total financial return of 17% over its pro-forma net asset value of 335p at the start of the year.
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Rightmove said its pretax profit was lifted in 2014 by higher revenue, driven by a growth in website traffic and an increase in its average revenue per advertiser. The online property portal said its pretax profit rose to GBP122 million from GBP97 million in the year to the end of December, boosted by an increase in revenue to GBP167 million from GBP139.9 million. The group hiked its final dividend to 22 pence per share from 17 pence, bringing its total dividend to 35 pence per share from 28 pence in 2013.
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Redefine International said it will launch a share placing to back its investment plans in the UK and Germany, as it said it is trading in line with expectations and said it has signed up Primark as a tenant in a German shopping centre. Redefine said it plans to issue up to 131.4 million shares in order to raise funds to back new investment opportunities in the UK and Germany, the funding of initiatives within its existing portfolio and to increase its ability to secure attractive debt funding.
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Rentokil Initial said its pretax profit increased in 2014 despite lower revenue as its cost-cutting measures improved its profit margins over the year. Pretax profit for the business services company rose to GBP163.2 million in 2014, compared to GBP112.2 million in 2013. Rentokil said it will pay a final dividend of 1.82 pence per share, bringing its total dividend to 2.59 pence, up 12% year-on-year.
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UBM posted a rise in pretax profit for 2014 as lower costs and exceptional gains helped offset a fall in revenue, and said it has made good progress with its so-called 'Events First' strategy in the first two months of 2015. The PR Newswire owner and events firm proposed a final dividend of 16.0 pence, taking its total dividend for the year to 21.3 pence, up from 21.1 pence a year before. UBM posted a pretax profit of GBP145.2 million, up from GBP109.5 million, despite seeing revenue fall 6% to GBP746.3 million from GBP793.9 million.
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Engineering company IMI reported a slight fall in pretax profit in 2014 amid lower revenue as the group was hit by the strength of sterling and by what it called challenging economic conditions in key markets. Pretax profit fell to GBP246 million from GBP249 million as revenue for the year fell to GBP1.69 billion from GBP1.74 billion in 2013. But IMI hiked its dividend for the year to 37.6 pence from 35.3 pence last year.
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UK bookmaker William Hill posted a lower profit for 2014, as a number of exceptional costs associated with higher taxes and store closure costs more than offset growth in revenue. William Hill reported a pretax profit of GBP233.9 million for 2014, 9% lower than the GBP257.0 million profit it made in 2013, having booked a total of GBP83.4 million in exceptional costs, compared with only GBP22.8 million last year. William Hill said it will pay a final dividend of 8.2p per share, taking its full year dividend for 2014 to 12.2 pence, a 5% increase on its pay out for 2013.
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Bank of America Merrill Lynch said the majority owners of Saga successfully sold a 6% stake in the business in a secondary placing, meaning they sold a further 10% stake in total, leaving them with a 62% stake. On Friday, the bank, which acted as sole bookrunner for the placing, said Acromas Bid Co had successfully sold the 66.0 million shares in the secondary placing at 185 pence, raising gross proceeds of GBP122 million.
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Berendsen reported higher profit for 2014 as its offset a currency-related hit on its revenue by cutting costs and improving margins, and said it expects good underlying progress in 2015 although the strength of the pound will continue to weigh on its results. The company reported a pretax profit of GBP117.0 million for 2014, up from GBP112.4 million in 2013, as a drop in administrative expenses and finance costs offset a slight drop in revenue to GBP1.04 billion, from GBP1.05 billion, due to the strength of sterling weighing on its translated overseas sales.
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Instrumentation and controls company Spectris reported a fall in pretax profit and sales in 2014, as its was hit by challenging market conditions in Europe and China, but said it should get a boost from acquisitions and new product investments in 2015. The company said its pretax profit for the year was GBP171.1 million, down 37% from GBP271.7 million in 2013, as sales fell 2% to GBP1.17 billion, from GBP1.20 billion. A strong year of trading in North America was offset by weakness in its European and Chinese markets, it said.
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AIM Movers
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Baobab Resources shares are up by a third after it agreed terms on a GBP20.5 million takeover by major shareholder Redbird Investments Ltd at 6.0 pence per share. Craven House Capital shares are down after it swung to a pretax loss for its first half, mostly as a result of the write down of its holding in Pressfit Holdings. Thor Mining is also down after it reported a slightly wider loss in the first half of its financial year as it continued work to progress its Molyhil and Pilot Mountain projects. Kea Petroleum is another faller after it reported a significantly wider pretax loss for 2014 due to a writedown on the Wingrove and Douglas wells in New Zealand.
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Top Economics And General
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An overwhelming majority of members of the German parliament voted to grant a four-month extension of Greece's bailout plan. While 542 of the 631 members of the Bundestag voted in favour of extending the aid programme, which is due to expire Saturday, 32 opposed it. Dutch lawmakers already approved the extension, but the vote in Berlin was seen as crucial because Germany, Europe's biggest economy, has been the main contributor to the Greek bailout. The Greek Parliament also has to consider the extension, which is considered vital to keeping the eurozone's most heavily indebted member state solvent and in the eurozone.
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Consumer confidence in the UK held fast in February, the latest survey from research firm GfK showed on Friday with an index score of +1. That was unchanged from the January reading, although it was shy of expectations for +2. The February score also matches the highest index reading since August.
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UK house prices rose by 1.3% in January from the month before and by 6.7% year-on-year, according to the Land Registry.
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Italy's EU measure of inflation rose for the first time in three months in February, defying expectations for a decline, preliminary data from the statistical office ISTAT showed. The harmonized index of consumer prices, or HICP, edged up 0.1% annually after a 0.5% fall in January. Economists had forecast a 0.3% slump. On a month-on-month basis, the HICP increased 0.3% in February, in contrast to economists' prediction for 0.3% decline. In January, the index dropped 2.5%.
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In a victory for open internet advocates, the US Federal Communications Commission imposed sweeping new rules to preserve net neutrality, the principle that all users should have equal access to the internet. "Today, history is being made," FCC Chairman Tom Wheeler said, "as we vote for a fast, fair and open internet." The FCC voted 3-2 on party lines on new rules that will treat the internet as a public utility under Title II of the 1934 Communications Act. It will prevent internet providers from charging some websites for faster service or slowing or blocking others.
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Ukraine said it has begun withdrawing heavy weapons from the front line in the country's east, injecting new hope into the latest peace agreement. Military spokesman Anatoliy Stelmakh said that the armed forces were withdrawing 100-millimetre artillery cannons along the entire front line, the Interfax Ukraine news agency reported. The move comes ten days later than stipulated in the peace agreement signed on February 12 in Minsk. Ukraine initially refused to carry out the withdrawal, pointing to ceasefire violations by the Russia-backed separatists.
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Afternoon Watchlist (all times in GMT)

13:00 Germany Consumer Price Index
13:30 US Gross Domestic Product Price Index Preliminary
13:30 US Personal Consumption Expenditures Prices
14:45 US Chicago Purchasing Managers' Index
15:00 US Pending Home Sales
15:00 US Reuters/Michigan Consumer Sentiment Index
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Monday's Key UK Corporate Events

Alent - Full Year Results
Amlin - Full Year Results
British Polythene Industries - Full Year Results
Intertek Group - Full Year Results
HellermanTyton - Full Year Results
Hiscox - Full Year Results
Keller - Full Year Results
Senior - Full Year Results
Ultra Electronics Holdings - Full Year Results
Thorntons - Half Year Results
Dialight - Full Year Results
Trinity Mirror - Full Year Results
FBD Holdings - Full Year Results
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Sunday's Key Economic Events (all times in GMT)

01:00 China Manufacturing/Non-Manufacturing PMI
23:50 Japan Capital Spending

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

01:35 Japan Nomura/ JMMA Manufacturing Purchasing Manager Index
01:45 China HSBC Manufacturing PMI
05:00 Japan Vehicle Sales
07:00 UK Nationwide Housing Prices
08:45 Italy Markit Manufacturing PMI
08:50 France Markit Manufacturing PMI
08:55 Germany Markit Manufacturing PMI
09:00 EU Markit Manufacturing PMI
09:00 Italy Unemployment
09:30 UK Markit Manufacturing PMI
09:30 UK Mortgage Approvals/Consumer Credit
10:00 EU Consumer Price Index
10:00 EU Unemployment Rate
12:30 US Personal Consumption Expenditures
13:30 US ISM Prices Paid
14:45 US Markit Manufacturing PMI
15:00 US Construction Spending
15:00 US Former Fed's Bernanke speech
15:00 US ISM Manufacturing PMI
15:00 US Philadelphia Fed's Plosser speech
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