Marks & Spencer Share News (MKS)

LONDON (Alliance News) - Stocks were on the rise in London early Wednesday, following surging equities markets in the US and Asia and rising oil prices.

Hospitals group Mediclinic International, building materials firm CRH, and Royal Mail were top blue-chip gainers, up about 1.5% to 2%. Royal Mail got a reprieve from regulator Ofcom, which said it will not impose new price controls on the letter carrier.

Marks & Spencer was the worst of a small group of FTSE 100 decliners, off 7.1%. The retailer reported a fall in pretax profit in its recently-ended financial year as new Chief Executive Steve Rowe said his focus in his new role will be to try to bring the struggling clothing and homewares division back to growth.

Leading the FTSE 250, outsourcer Serco, up 7.5%, and payments firm Paysafe, up 6.5%, both said they expect to beat market expectations for 2016.

Here is what you need to know at the London market open:
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MARKETS
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FTSE 100: up 0.5% at 6,252.09
FTSE 250: up 0.3% at 17,194.68
AIM ALL-SHARE: up 0.1% at 734.01
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Hang Seng: up 2.5% at 20,333.62
Nikkei 225: closed up 1.6% at 16,757.35
DJIA: closed up 1.2% at 17,706.05
S&P 500: closed up 1.4% at 2,076.06
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GBP: flat at USD1.4609 (USD1.4615)
EUR: flat at USD1.1153 (USD1.1147)

GOLD: down at USD1,224.72 per ounce (USD1,230.78)
OIL (Brent): up at USD49.30 a barrel (USD48.75 )

(changes since previous London equities close)
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ECONOMICS AND GENERAL
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Wednesday's Key Economic Events still to come
(all times in BST)

EU EcoFin meeting

0900 Germany IFO survey
0900 Italy Industrial orders and sales
1000 Italy trade balance
1000 Switzerland ZEW survey
1130 EU ECB Vice President Vitor Constancio speech
1200 US MBA Mortgage Applications
1330 US goods trade balance
1400 US housing price index
1400 US FOMC member Harker speech
1445 US Markit services and composite PMI preliminary
1500 Bank of Canada interest rate decision
1530 US EIA crude oil stocks
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Britain could be forced to stomach two more years of austerity if it votes to leave the European Union, according to a report from the Institute for Fiscal Studies. The IFS has warned that the UK government may look to extend its austerity drive in the aftermath of a Brexit vote as it grapples with a fall in national income and a sharp rise in public sector borrowing. The respected think-tank said a vote to Leave could see public finances take a GBP20 billion to GBP40 billion hit in 2019-20, if gross domestic product is 2.1% to 3.5% lower over the period, as predicted by the National Institute of Economic and Social Research.
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Eurozone finance ministers struck a deal clearing the way for Greece to access a fresh round of bailout funds, while also laying out debt relief measures aimed at securing the involvement of the International Monetary Fund. The agreement, reached early Wednesday after 11 hours of talks in Brussels, should allow Greece to receive an overall EUR10.3 billion in the coming months, needed to prevent the cash-strapped nation from returning to the brink of bankruptcy. One of the thorniest issues was the question of debt relief. Wednesday's agreement includes short, medium and long-term measures to ensure that Athens is able to repay its debt, most of which are envisaged to come into play after Greece has completed its bailout, in 2018. The proposed measures include interest-rate reductions and the extension of debt maturities, as well as the use of almost EUR20 billion in unused bailout funds to trade in existing loans against ones with longer maturities.
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Luxembourg rejected media reports that it had started verbally offering companies beneficial tax arrangements, which raised concerns that the country may be trying to sidestep new EU tax transparency measures. Several Belgian newspapers had reported that the verbal practice may be meant to avoid written agreements and thus bypass new EU measures to be implemented next year that will require member states to share information about tax arrangements they offer to companies.
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German consumer confidence is set to strengthen in June as the economy is expected to grow over coming months, survey data published by the research group GfK showed. The forward-looking consumer sentiment index rose to 9.8 in June from 9.7 in May. It was forecast to remain unchanged in June.
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Republican front-runner Donald Trump chalked up another victory in a presidential primary in the western US state of Washington. Among Democrats, Hillary Clinton came out on top in a contest that had mostly symbolic meaning because both the Democratic and Republican races for the presidential nomination are all but settled. Trump won 76% of the vote, according to the official tally.
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The Afghan Taliban confirmed the death of their chief Mullah Akhtar Mansoor in a US drone strike, and appointed one of his two deputies as his successor. Mullah Haibatullah Akhunzada will replace Mansoor as the new head of the militia, the Taliban statement said.
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BROKER RATING CHANGES
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Investec Cuts Barclays To Hold From Buy, Keeps Target At 195p
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GOLDMAN RAISES COMPASS GROUP TO 'NEUTRAL' ('SELL') - TARGET 1269 (1020) PENCE
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JPMORGAN CUTS STAGECOACH TO 'NEUTRAL' ('OVERWEIGHT') - TARGET 256 (338) PENCE
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HSBC RAISES MITCHELLS & BUTLERS TO 'BUY' ('HOLD') - TARGET 340 (300) PENCE
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COMPANIES - FTSE 100
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Marks & Spencer Group reported a fall in pretax profit in its recently-ended financial year as new Chief Executive Steve Rowe said his focus in his new role will be to try to bring the struggling clothing and homewares division back to growth. The food, clothing and homewares retailer said its pretax profit in the year ended April 2 fell to GBP488.8 million from GBP600.0 million the year before, despite revenue rising slightly to GBP10.56 billion from GBP10.31 billion. M&S will pay total dividend of 18.7 pence, which is up 3.9% on the prior year, and a special dividend of 4.6p for the first half of the new financial year.
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UK media and communications regulator Ofcom said it will not impose new price controls on Royal Mail and will leave the current regulatory framework on the postal services provider intact. Ofcom said that, given the declining letters market in the UK and increased competition in the parcels market, it has not proposed any new price controls on wholesale or retail products sold by Royal Mail. The regulator added it intends to leave in place the framework introduced on Royal Mail in 2012, which provided it with greater commercial freedom. This includes a safeguard cap placed on stamp prices.
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HSBC Holdings said it will issue USD2.0 billion in contingent convertible securities, so-call CoCos. The bank said it will issue 6.875% perpetual subordinated contingent convertible securities on June 1, callable in June 2021 and every five years thereafter. HSBC said it intends to use the proceeds for general corporate purposes and to strengthen its capital base.
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Dixons Carphone said it anticipates to report headline pretax profit at the upper end of its previous guidance in its recent financial year, following solid like-for-like revenue growth. The electronics and mobile phone retailer said headline pretax profit for the year to the end of April was between GBP445.0 million and GBP450.0 million, at the upper end of its previous guidance. Group like-for-like revenue for the recent year rose 5.0% and grew by the same percentage in the four quarter, Dixons Carphone said.
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Mediclinic International said it had traded in line with its expectations in its most recently ended financial year and said its focus is now on the smooth integration of Al Noor Hospitals following the completion of its reverse takeover earlier this year. The company reported a pretax profit of GBP245 million for the year to end-March, compared to a restated pretax profit of GBP266 million the previous year, on revenue of GBP2.11 billion, up from GBP1.98 billion. The figures compare the combined group with Mediclinic alone the previous year, translated into sterling. Mediclinic proposed a final dividend of 5.24 pence, taking its total dividend for the year to 7.90p, down from 9.33p the year before.
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Babcock International Group said profit and revenue grew in the year to the end of March, and the defence and engineering support services company said it is confident on its outlook for the new year. Babcock said its pretax profit for the financial year to March 31 was GBP330.1 million, up 5.0% on the GBP313.1 million the group made a year earlier. Revenue grew to GBP4.16 billion, up 4.0% year-on-year from GBP4.0 billion. Babcock will pay a final dividend of 19.75 pence for financial 2016, up from 18.1p, meaning its total payout rises to 25.8p from 23.6p.
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Intertek Group said it achieved good revenue growth in the first four months of 2016, though its resource industry-facing businesses continued to see challenging market conditions. The testing, inspection and certification company said group revenue for the four months to the end of April was GBP774.0 million, up 13% year-on-year and growing 11% in constant currencies. Organic revenue, stripping out acquisition contributions, grew 2.3% in the period, while constant currency growth was 0.5%.
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Anheuser-Busch InBev on Tuesday welcomed the European Commission's approval of its takeover of SABMiller, after agreeing the sale of a number of assets to Japan's Asahi Breweries. To secure approval, AB InBev has proposed the sale of its Peroni, Grolsch and Meantime brands and their associated businesses in Italy, the Netherlands, the UK and internationally to Asahi. It also proposed the sale of SABMiller's businesses in Central and Eastern Europe, which can be sold to one or two purchasers and can be completed after the closing of the deal.
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COMPANIES - FTSE 250
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Zoopla Property Group said its revenue more than doubled in its first half, largely thanks to the additional revenue stream coming from its Comparison Services division, which was not part of the group a year earlier. Zoopla reported revenue of GBP96.4 million for the six months ended March 31, more than double the GBP42.0 million it posted for the same period a year earlier, on the back of an additional GBP57.7 million coming from its Comparison Services division. The Comparison Services was born out of Zoopla's acquisition of home services comparison platform USwitch. Revenue from Zoopla's other division, Property Services, dropped slightly to GBP38.7 million for the period, down from GBP42.0 million. Zoopla will pay an interim dividend of 1.5 pence per share, up from 1.0p per share a year earlier.
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Pennon Group said its pretax profit grew thanks to efficiencies in the business which offset a slight decline in revenue, while the group hiked its annual payout. Pennon, which owns South West Water and waste management business Viridor, along with the recently-acquired Bournemouth Water unit, said pretax profit for the year to the end of March grew to GBP206.3 million from GBP197.0 million a year earlier, despite revenue dipping to GBP1.35 billion from GBP1.36 billion. It will pay a dividend for the year of 33.58 pence, up from 31.80p a year earlier.
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Online payments company Paysafe Group said its full-year revenue and earnings are set to outpace market expectations as the good momentum seen in the early months of 2016 has continued. Paysafe said revenue for 2016 is now expected to be USD950 million to USD670 million, ahead of the current market consensus of USD911 million.
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Outsourcer Serco Group said it anticipates underlying trading profit for 2016 will be ahead of current market expectations. Serco said its financial performance in the first four months of 2016 has been stronger than anticipated, primarily due to good outcomes on a number of commercial negotiations. The group said the outcome of those talks will sharply increase first half profit, though this will not repeat in the future.
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COMPANIES - INTERNATIONAL
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Monsanto said its board views the Bayer proposal as incomplete and financially inadequate, but is open to continued conversations to assess whether a transaction in the best interest of Monsanto shareholders can be achieved. Responding to Monsanto, Bayer said it is confident that it can address any potential financing or regulatory matters related to the transaction. On Monday, German conglomerate Bayer said it made an all-cash offer to acquire agricultural products giant Monsanto for USD122 per share or an aggregate value of USD62 billion.
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The next iPhone to come out in 2017 may have a much clearer screen. As per reports, the iPhone 7 will use AMOLED technology in their new model, which also will sport a bigger 5.8-inch screen. It was also reported that the suppliers are already preparing for a huge jump in display orders. Apple, which recently reported lower quarterly sales for the first time in 13 years, needs new features to rekindle growth in demand for the iPhone.
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Hewlett Packard Enterprise announced plans for a tax-free spin-off and merger of its Enterprise Services business with CSC. Immediately following the transaction, currently targeted to be completed by March 31, 2017, HPE shareholders will own shares of both HPE and approximately 50% of the new company.
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Wednesday's Scheduled AGMs/EGMs

Travis Perkins
Paysafe Group
Intertek Group
NAHL Group
Electric Word
Igas Energy
Immupharma
Lidco Group
e-Therapeutics
Dunedin Income Growth Investment Trust
F&C Private Equity Trust
Hilton Food Group
Judges Scientific
Mercantile Investment Trust
Highland Gold Mining
Polypipe Group
SQS Software Quality Systems
Alliance Pharma
Total Produce
Northern Petroleum
WANdisco
Hastings Group Holdings
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By Tom Waite; thomaslwaite@alliancenews.com; @thomaslwaite

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