Marks & Spencer Share News (MKS)

LONDON (Alliance News) - The following is a summary of top news stories Wednesday.
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COMPANIES
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Marks & Spencer Group warned on its profit in the short-term, as new Chief Executive Steve Rowe revealed his plans to try to revive the struggling Clothing & Home division. Rowe said his priority as the retailer's new head is to recover the Clothing & Home division and bring it back to profitability. In order to do this, M&S will invest to re-establish its price position by cutting prices. It also will enhance service by putting more employees into its stores and improve the style of its products, but the costs of doing this will hit profit this year and next, Rowe warned. M&S 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.
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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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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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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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MARKETS
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UK stock indices were in the green with banks and travel companies leading the blue-chips. Oil was higher, edging closer to the USD50 a barrel mark. Wall Street was pointed to a higher open.
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FTSE 100: up 0.8% at 6,265.65
FTSE 250: up 0.4% at 17,201.10
AIM ALL-SHARE: up 0.1% at 734.09

GBP: flat at USD1.4624 (USD1.4615)
EUR: flat at USD1.1143 (USD1.1147)

GOLD: down at USD1,220.88 per ounce (USD1,230.78)
OIL (Brent): up at USD49.15 a barrel (USD48.75)

(changes since previous London equities close)
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ECONOMICS AND GENERAL
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The governor of the Bank of England and a prominent think tank both were forced to defend themselves against accusations they were peddling pro-Remain propaganda, while a Remain advert attracted social media mockery. BoE Governor Mark Carney told the Treasury Select Committee it was his job to "come straight with the British people" over the risks posed by a potential Brexit, as he defended the central bank against accusations of anti-Brexit rhetoric. The warnings were backed by think tank the Institute of Fiscal Studies, which said Britain could be forced to stomach two more years of austerity if it votes to leave the European Union. The IFS was then forced to reject claims it was acting as the EU's "propaganda arm". Elsewhere, boyband Five pulled out of a gig organised by the Leave.EU campaign after discovering it was a political rally
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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. Meanwhile, German business confidence strengthened more than expected in May, reports said citing survey results from Ifo Institute. The Ifo Business Climate indicator rose to 107.7 in May from revised 106.7 in April. It was forecast to rise to 106.8.
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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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By Arvind Bhunjun; arvindbhunjun@alliancenews.com; @ArvindBhunjun

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