LONDON (Alliance News) - Stocks in London started flat-to-higher Monday, with BT Group one of the best performers in the FTSE 100 after it reaffirmed its outlook for the full financial year in its current guise and outlined a new organisational structure following its acquisition of mobile network EE.
The telecommunications and pay-TV company traded up 1.4% as it reported a pretax profit rise to GBP862 million for the quarter to end-December, up from GBP694 million a year before, as revenue rose to GBP4.64 billion from GBP4.48 billion.
BT said that, following its acquisition of EE, it will have a new organisation structure with effect from April. Under the new structure, it will have six lines of business, Consumer, EE, Business and Public Sector, Global Services, Wholesale and Ventures and Openreach.
The FTSE 100 index traded flat at 6,084.82. The FTSE 250 was up 0.2% at 16,516.16, and the AIM All-Share was up 0.1% at 694.45.
European stocks were mixed, with the CAC 40 in Paris down 0.2% and the DAX 30 in Frankfurt up flat.
Asian markets ended mixed. The Nikkei 225 index in Tokyo closed up 2.0%, while the Shanghai Composite ended down 1.8% and the Hang Seng in Hong Kong down 0.5%.
Chinese manufacturers signalled deterioration in operating conditions at the start of 2016 but the pace of contraction slowed slightly from December, the results of the Caixin survey showed. The Caixin Purchasing Managers' Index rose to 48.4 in January from 48.2 in December but marked the eleventh successive month of contraction.
Official data released by the Chinese government showed that the manufacturing sector underwent a faster contraction than seen at the end of 2015. The official manufacturing PMI, released by the National Bureau of Statistics fell to 49.4 in January from 49.7 in December. According to the report, the sector contracted for the sixth straight month.
The official Chinese non-manufacturing PMI dropped to 53.5 from 54.4 in December but stayed in positive territory.
Elsewhere in the London stock market, Home Retail Group traded up 5.5% after the Financial Times reported that J Sainsbury is facing pressure to increase its bid in order to secure an agreement to buy the FTSE 250-listed owner of Argos and Homebase.
According to the newspaper, people close to the matter said Sainsbury's met with Schroders and Toscafund, the two biggest shareholders in Home Retail, last week, with the pair indicating Sainsbury's would have to pay at least 160 pence per share, or preferably close to 165p, to get their support.
A 160p per share deal would value Home Retail at around GBP1.3 billion. The stock traded at 144.05p Monday morning. Sainsbury's shares were up 0.4%.
Premier Oil's share price doubled as it resumed trading after the terms of its deal to acquire the UK North Sea assets of Germany energy group E.ON were changed, meaning the deal is no longer classified as a reverse takeover.
Premier Oil struck a deal in January to buy E.ON's assets for USD120.0 million net, plus completion adjustments. At the time, the value of the completion adjustments was sufficient for the deal to be classed as a reverse takeover.
The pair have now agreed to reduce the completion adjustment to USD15.0 million, meaning the aggregate consideration payable by Premier Oil is USD135.0 million. As a result, the deal is no longer classed as a reverse takeover and Premier's shares could be restored to trading.
Premier Oil also was upgraded by Nomura to Buy from Neutral.
Lakehouse was the worst performer in the FTSE All-Share, down 54% after the group said budget cuts within its housing association clients have resulted in it winning fewer contracts than expected.
The asset and energy support services company said it has seen good bidding success since the start of its financial year on October 1, but said it is currently operating in a backdrop of active cost reductions taking place across its housing association clients, in particular a requirement for social landlords to cut rents by 1.0% a year for the next four years.
In some cases, Lakehouse said, this is resulting in client spending commitments being held back until budgets are confirmed in April, which has meant the number of contracts it has been able to secure has failed to meet its expectations, hitting its Regeneration unit the hardest and forcing the group to trim its expectations for the division.
In the rest of the economic calendar, there are still a number of Markit manufacturing PMI readings ahead, with France at 0850 GMT, Germany at 0855 GMT, the eurozone as a whole at 0900 GMT, the UK at 0930 GMT and the US at 1445 GMT.
Also at 0930 GMT are UK consumer credit and mortgage approvals numbers. At 1330 GMT is US personal consumption expenditure, before ISM manufacturing PMI and construction spending both at 1500 GMT. European Central Bank President Mario Draghi will speak to the European Parliament at 1600 GMT.
By Neil Thakrar; neilthakrar@alliancenews.com; @NeilThakrar1
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