Marks & Spencer Share News (MKS)

LONDON (Alliance News) - The following is a summary of top news stories Tuesday.
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COMPANIES
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Marks and Spencer Group PLC reported its third consecutive annual drop in a closely-watched profit measure, as the retailer continued to struggle to entice customers to buy its clothing range and general merchandise offering against better performing rivals such as Next PLC despite heavy promotional activity. Underlying pretax profit, which strips out exceptional items and fair value movements, fell to GBP623 million, from GBP648.1 million. That was slightly above analysts expectations for up to GBP620 million. The retailer said it remained cautious about the outlook for the business due to competition and promotional pricing in the UK retail sector, although it has seen some improvement in consumer confidence. The retailer has now come to the end of a three-year plan to turnaround the business. However, it has failed to resuscitate its general merchandise business despite the success of its food offering.
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BP PLC has suffered a decisive setback in its court battle to limit the cost of its settlement for victims of the 2010 Deepwater Horizon disaster, leaving it with the option only of going to the US Supreme Court as a last chance to avoid billions of dollars of additional liabilities, the Financial Times reports Tuesday. The Fifth Circuit appeals court in New Orleans on Monday rejected BP’s request for a full review of the company’s case, as it seeks to establish that the compensation settlement it agreed with plaintiffs’ lawyers in 2012 is being interpreted unfairly, the paper says. The ruling means BP has now nearly run out of road in its attempt to stop the cost of the settlement soaring far above the USD7.8 billion that it originally predicted, the FT said, quoting BP saying it was disappointed.
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RSA Insurance Group PLC said it has agreed to sell its shareholding in its Canadian insurance brokerage business to a subsidiary of Arthur J Gallagher & Co, as the FTSE 100 insurer continues to sell non-core assets as part of its plans to beef up its balance sheet and recover from its losses in 2013. In a statement, RSA said risk management business Arthur J Gallagher & Co has agreed to acquire Noraxis Capital Corp for CAD500.0 million. RSA said it expects to receive CAD441.0 million in cash for selling its majority stake in the business, subject to adjustments on completion. RSA said the transaction is expected to result in a gain on sale of about GBP140.0 million, as well as adding GBP225.0 million to its net tangible assets, which it said will improve its capital strength.
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Greencore Group PLC raised its interim dividend 16% after reporting a good first half of the year driven by strong growth in the UK food-to-go market, although its pretax profit took a hit due to restructuring costs. The Irish convenience food business said it had outperformed a buoyant food-to-go market in the UK, and also benefited from the first full year of supply to a major new customer in the US. It cautioned that, although UK economic conditions are steadily improving, the country's grocery market continues to face pricing pressure and uncertainty.
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London Stock Exchange Group PLC confirmed it has entered into exclusive discussions for potential deal to acquire US index and asset management business Russell Investments. Last week, the London Stock Exchange had said it was in ongoing discussions with The Northwestern Mutual Life Insurance Company, Russell Investments' parent company, over a potential acquisition. Media reports had indicated that there would be stiff competition for Russell Investments, but a report published in the Financial Times earlier said the London Stock Exchange's talks with The Northwestern Mutual Life Insurance Company have since become exclusive.
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Vodafone Group PLC tried to appease investors with the promise of higher dividends, after warning that cash flow will be hit by its huge investment programme in the next few years, and as it reported falling service revenue due to continued weakness in some of its European markets. The wireless company, which is going through a major transformation after selling its stake in Verizon Wireless late last year, reported earnings before interest, tax, depreciation and amortisation of GBP11.08 billion for the year to end-March, down from GBP11.47 billion a year earlier as customer costs rose. Revenue was GBP38.35 billion on a statutory basis, up from GBP38.04 billion, although fell to GBP43.62 billion, from GBP44.45 billion, when contributions from joint ventures are consolidated
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Carnival Corp PLC shares rose after the company said it would add two ships to its Australian fleet in 2015 to meet surging demand for cruises in the country. In a statement, the cruise company said Australian cruise passenger numbers have more than doubled in the past five years and are projected to grow to one million by 2016, from 800,000 in 2013. "P&O Cruises (Australia), one of Carnival Corporation's 10 brands, will add two ships to its fleet in 2015. With a total of five ships, P&O Cruises will establish Australia's largest year-round fleet and be well-positioned to continue meeting Australians' surging demand for cruise vacations," it said.
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Shares in Afren PLC dropped after the oil and gas production company reported a drop in profits for the first quarter as revenue fell by 30%. The oil and gas exploration and production company, which operates in Africa and the Middle East, reported a pretax profit of USD55.8 million for the three months ended March 31, down from GBP138.8 million a year earlier, on the back of a 30% drop in revenues and higher finance costs. Its profit after tax however was USD73 million, compared with only USD28 million the prior year, primarily due to a tax income credit in the period, compared with a USD111 million charge last year.
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Defence and aerospace products supplier Cobham PLC said it will buy US-based test systems and wireless communications business Aeroflex Holding Corp for about GBP869 million in cash, including debt, a deal that will further grow Cobham's connectivity business and boost its earnings. Cobham bought similar businesses Thrane & Thrane in 2012 and Axell Wireless in 2013, but this deal is bigger, with Aeroflex expected to contribute about 17% of the combined company's revenue. It is expecting to eke about GBP50 million of annual cost synergies out of the deal, for a total investment of about GBP128 million.
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Paragon Group of Companies PLC reported a 19% increase in first-half pretax profit, supported by buy-to-let lending and its debt purchase business, Idem Capital. In a statement, the specialist lender said it made a GBP58.2 million pretax profit in the six months ended March 31, compared with GBP48.8 million in the corresponding period a year earlier.
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Plumbing and heating products distributor Wolseley PLC said it is in talks with subsidiaries of Frauenthal Holding AG about the sale of its Austrian plumbing and heating business ÖAG. "This disposal is in line with our resource allocation strategy of focusing on our core operations where we can build significant scale and generate attractive returns. I would like to thank the staff of ÖAG for their commitment to the business and wish them every success for the future," Wolseley Chief Executive Ian Meakins said in a statement.
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UBC Media Group PLC lost over half its value, after it said it intends to raise GBP6 million through a placing and share subscription so that it can acquire digital music services company 7digital Group Inc for GBP16.5 million, as it homes in on the digital music market. The multimedia content and services company said the acquisition, via its Delaware subsidiary, constitutes a reverse takeover, and said it plans to change the company's name to 7digital Group. The deal is subject to shareholder approval. "The acquisition will create a global digital music and radio services business operating in 42 countries with at least 95 B2B customers," the company said in a statement. It said the enlarged company will have a valuation of GBP29 million.
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MARKETS
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UK stocks are trading mixed, with the the FTSE 100 being held back by some if its biggest constituents for the second consecutive day.
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FTSE 100: down 0.5% at 6810.23
FTSE 250: up 0.3% at 15422.33
AIM ALL-SHARE: down 0.1% at 790.58
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The pound has jumped to a four-day high against the dollar after UK inflation data showed prices rising faster than expected.
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GBP-USD: up at USD1.6828
EUR-USD: down at USD1.37

GOLD: down at USD1292.37per ounce
OIL (Brent): up at USD109.42 a barrel

(changes since end of previous GMT day)
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ECONOMICS AND GENERAL
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UK inflation accelerated more than expected on higher transport costs in April, official figures showed. Inflation rose to 1.8% in April from 1.6% in March, which was the lowest since October 2009, the Office for National Statistics said. The rate exceeded the consensus of 1.7%. Month-on-month, the increase in consumer prices doubled to 0.4% from 0.2% in March. Excluding energy, food, alcoholic beverages and tobacco, core inflation increased to 2% in April from 1.6% in March.
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The chief of the Thai army declared martial law, in what he said was a bid to stem violence in the country following six months of anti-government protests. "There are some groups with bad intentions to create unrest, and threatening to use weapons on the people," General Prayuth Chan-ocha said. Martial law gives the army control over security, but leaves the government in command of other tasks. Prayuth denied that the army was carrying out a coup.
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Germany's producer prices fell for the ninth consecutive month in April, Destatis reported. Producer prices fell 0.9% on a yearly basis, the same rate as seen in March and February. The annual decline also matched economists' expectations. On a monthly basis, producer prices fell 0.1%, slightly slower than the 0.3% drop seen in March. Excluding energy, producer prices slid 0.2% from last April and remained unchanged from March.
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NATO said Monday that it saw no evidence of Russian troops pulling back from the border with Ukraine, despite such an order by Russian President Vladimir Putin. NATO Secretary General Anders Fogh Rasmussen said: "Unfortunately...we haven't seen any evidence at all that the Russians have started withdrawal of troops from the Ukrainian borders." The US also said it had seen no evidence of troop movement.
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Chinese President Xi Jinping held talks with Russian President Vladimir Putin before the planned signing of deals on gas and infrastructure projects. Putin arrived in the eastern Chinese city of Shanghai Tuesday for a two-day visit amid expectation that the two sides will announce a major deal to bring Russian gas to China. Xi and Putin were scheduled to attend the launch of a seven-day joint drill by Russian and Chinese naval vessels off Shanghai.
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Thousands of people in Bosnia, Serbia and Croatia were evacuated late Monday and early Tuesday as rising floodwaters swallowed homes and farmland after last week's record rains. Croatia reported a second death from the flooding, bringing the overall death toll to at least 42 as the river Sava submerged several villages and threatened to spill into the eastern city of Slavonski Brod. Just across the border in northern Bosnia, more than 11,000 people fled their homes in the areas of Orasje and Bijeljina as an estimated one-quarter of Bosnia's 3.8 million people have been affected by the flooding.
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