3i Group Share News (III)

LONDON (Alliance News) - The FTSE 100 is up for a second day Thursday as the rebound from the heavy losses in equity markets in the previous five days continues, with positive reports from the likes of Vodafone and Smith & Nephew helping London's blue-chip index.

Vodafone confirmed its full-year operating profit guidance, despite a 4.8% decline in revenues in its fiscal third quarter. The company is still being hit by the weakness in its southern European operations, but it is managing to offset some of the impact through cost-cutting and improving its operational performance.

The company, which is going to plough a lot of the money from its recent Verizon Wireless stake sales into its 4G services, said it is still positive about the expected uptake of those services. It said it now has about 2 million 4G Red customers in Europe.

Smith & Nephew, meanwhile, reported a further decline in its pretax profit in 2013, as it spent more on research and development costs and selling costs and because last year's figure had been buoyed by disposal gains.

However, its revenues were up for the year as a whole, and growth accelerated to 6% in the fourth quarter, powered by continued growth in emerging markets and as the US market showed signs of improvement. The company has been hit hard in the last couple of years by lower health spending in the US and Europe.

Medical devices maker Smith & Nephew raised its dividend for 2013 by 5%.

Drugs giant AstraZeneca still hasn't fully emerged from its struggles of recent years. The UK's second-largest drugs company behind GlaxoSmithKline has been hit hard as several of its best-selling drugs lost, or face losing, exclusivity and therefore pressure from generic drugs produced by rivals.

AstraZeneca's revenues and pretax profit fell in 2013 as the so-called patent cliff effect continued, and it is expecting revenues and earnings to fall further this year.

It had previously said it expects to return to growth faster than analysts are currently predicting, with revenues returning to 2013 levels in 2017.

It expanded its cost-cutting programme - it now expects to lay off around 5,600 staff between 2013 and 2016 - but was keen to point out that its pipeline of potential new drugs is strengthening following recent acquisitions.

The Bank of England and European Central Bank have kept interest rates unchanged for another month, as expected, while the BOE also maintained its quantative easing programme.

ECB President Mario Draghi will start his press conference at 1330 GMT, with markets looking for his thought on the threat of deflation in the single currency area.

His counterpart at the BOE will have taken note of the latest UK house price data out Thursday, with the Halifax house price index up 7.3% in the three months to the end of January, slightly slower than the 7.5% rise seen in the previous three months. However, in the month of January alone, prices rose by 1.1%, compared with the 0.6% drop in December.

The 48-hour strike by London Underground workers is causing a second day of disruption for millions of commuters on Thursday, despite unions agreeing to fresh talks with management on Friday. The unions have so far refused to call off another 48-hour strike scheduled for next week.

In the US, the latest winter storm dropped more than 30 centimetres of snow Wednesday across a wide swath of the northern US, stretching from Kansas to Massachusetts, leaving more than 1 million people without electricity. Half of those without power were in Pennsylvania. The snow affected transportation, causing cancellations of more than 3,000 flights, according to flightaware.com.

The US government has warned airlines connecting to Russia during the Olympics to watch out for toothpaste tubes that could conceal materials to build a bomb aboard an airplane, broadcasters ABC and CNN reported. The Homeland Security Department declined to confirm specific warnings, saying only in an email that it "regularly shares relevant information" with airlines, including those involved in international events like the Winter Olympics, which opens Friday in the Russian resort of Sochi.

The bodies of eight miners have been found after fire erupted at a South African gold mine, the government said. One of the 18 workers who had been trapped underground was still missing, the news agency Sapa quoted the mineral resources ministry as saying. Eight others were rescued on Wednesday, while one had managed to get out himself. It was not clear what had caused the fire at a depth of 1.73 kilometres in the mine west of Johannesburg. Mine owner Harmony Gold said it could have been started by a seismic event that damaged electric cables.

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FTSE 100: up 0.9% at 6,516.45
FTSE 250: up 0.9% at 15,695.54
AIM ALL-SHARE: up 0.6% at 857.98
GBP-USD: 1.6289
EUR-USD: 1.3496
GOLD: USD1,261.60 an ounce
OIL (Brent): USD107.07 a barrel

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KEY UK CORPORATE NEWS:

FTSE 100: TUI Travel reported flat revenues for the first quarter of its new financial year, but managed to reduce its operating loss with the help of strong demand for its high-margin unique-holidays range. It cut costs further, stemmed losses in France. It added that current trading is strong. Compass Group said it has had a good first quarter, with organic revenues up about 4% at constant currencies, and its expectations for the full year remain positive and unchanged. Burberry has appointed British Sky Broadcasting Chief Executive Jeremy Darroch as a non-executive director. EasyJet carried 4.0 million passengers in January, up 3.7% on the year, pushing up its load factor by one percentage point to 85.4%.

FTSE 250: Imagination Technologies is the top gainer on the index after it said it has extended its multi-year, multi-use license agreement with Apple. Under the agreement, Apple can use Imagination's range of current and future PowerVR graphics and video IP cores in its smartphones, tablets and other devices. Beazley reported a 25% increase in pretax profit for its recent financial year, amidst an especially strong underwriting performance and a quiet year for catastrophe losses, allowing it to declare a higher special dividend. Londonmetric Property reported an "intense level of investment activity" between the start of October and February 5, as it acquired properties worth GBP201.9 million at an average yield of 7.9% and made commercial disposals of GBP129.7 million at an average yield of 6.1%. Investec income was flat over the first nine months of the year, as the depreciation of the rand continued to offset higher fund management, while it said it is also "exploring" a potential sale of its UK mortgage business, Kensington. Grainger sales more than doubled in the four months to end-January thanks to the house market recovery, and it plans to make investments to take advantage of the improving market. Supergroup says it is well placed to meet market expectations for the full year after the Superdry clothing-store chain owner reported another set of impressive trading results for the third quarter, with group sales up 22%. Enterprise Inns said trading has been encouraging in the first 18 weeks of the year, as like-for-like net income continued to improve. The holding company of JSC Bank of Georgia, Bank of Georgia Holdings, said the bank has secured a USD65 million subordinated loan facility from a fund managed by the International Finance Corporation as it looks to repay more expensive debt facilities and strengthen its capital position. 3i Group-backed SLR Management has acquired HFP Acoustical Consultants Inc in the US and HFP Acoustical Consultants Corp in Canada, in order to increase its expertise in acoustics and noise control.

AIM: JSJS Designs is a big gainer after the consumer electronics company launched a range of intelligent boiler and radiator controls that can be controlled by smart phones remotely. The products are similar to those of Nest, a maker of intelligent thermostats acquired by Google for USD3.2 billion last month. Coral Products is another gainer after it signed a number of new contracts for its containers and recycling boxes worth GBP875,000 in total. Rockhopper Exploration is up after it said it expects capital costs for Phase 1 of the Sea Lion development to reach USD5.2 billion and it expects the phase to recover 293 million barrels of oil over 25 years. Pittards is also doing well after the leather and luxury goods producer appointed Godfrey Davis, the chairman and former chief executive of luxury goods company Mulberry Group, as a non-executive director. That over shadowed a warning that its results had been hit by sterling's rise in the fourth quarter of last year. President Energy is down after it said it is planning a placing to raise a minimum of USD40 million and an open offer to raise a further USD7 million, to fund the development of its operations in Paraguay.

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AFTERNOON WATCHLIST: US Initial Jobless Claims, US Trade Balance, EIA Natural Gas Storage Change

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Friday's Key UK Corporate Events

Acal Interim Management Statement
SSE Interim Management Statement

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Friday's Key Economic Events

01:45 China HSBC China Services PMI
07:00 Germany Trade Balance
07:45 France Budget
07:45 France Trade Balance
09:30 UK Industrial Production
09:30 UK Manufacturing Production
09:30 UK Total Trade Balance
11:00 Germany Industrial Production
13:30 US Nonfarm Payrolls
13:30 US Unemployment Rate
15:00 UK NIESR GDP Estimate
19:00 US Consumer Credit Change

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By Steve McGrath; steve.mcgrath@alliancenews.com; @stevemcgrath1

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