Next Share News (NXT)

LONDON (Alliance News) - Lloyds Banking Group led a rally by blue-chip banks and insurers early Thursday after pleasing investors by declaring a special dividend on top of a big increase to its normal annual dividend. Lloyds was up 9.8%, followed by RSA Insurance, RBS and Prudential.

RSA reported a 43% jump in annual operating profit, beating analyst expectations, and raised its full-year dividend to 10.5 pence from 2.0p the prior year.

Meanwhile, BT Group shares were up 2.8%, after UK telecoms regulator Ofcom said that BT Group's Openreach division must be reformed to better serve customers and businesses and that BT "must open up" its network. But importantly Ofcom didn't demand Openreach be spun off immediately, though it kept that open as a future possibility.

Here is what you need to know at the London market open:
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MARKETS
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FTSE 100: up 1.6% at 5,960.46
FTSE 250: up 0.8% at 16,250.97
AIM ALL-SHARE: up 0.2% at 688.26
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Hang Seng: down 1.6% at 18,888.75
Nikkei 225: closed up 1.4% at 16,140.34
DJIA: closed up 0.3% at 16,484.99
S&P 500: closed up 0.4% at 1,929.80
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GBP: flat at USD1.3940 (USD1.3944)
EUR: soft at USD1.1015 (USD1.1034)

GOLD: down at USD1,239.10 per ounce (USD1,248.40)
OIL (Brent): up at USD34.02 a barrel (USD32.91)

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

09:00 Italy Consumer and Business Confidence
09:00 EU M3 Money Supply and Private Loans
09:30 UK Gross Domestic Product, Business Investment, Index of Services
10:00 Italy Retail Sales
10:00 EU Consumer Price Index
11:00 Italy Trade Balance
13:15 US Fed's Lockhart speech
13:30 US Initial and Continuing Jobless Claims
13:30 US Durable Goods Orders
14:00 US Housing Price Index
15:30 US EIA Natural Gas Storage
16:00 US Kansas Fed manufacturing activity
17:00 US FOMC Member Williams speech
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China and the US agreed that stronger sanctions were needed against North Korea after Pyongyang's nuclear and missile tests in the past two months. The move comes as the UN Security Council was expected to tighten sanctions against the country "in the coming days," according to a senior council diplomat. The resolution was dependent on negotiations between the US and China, he said, speaking anonymously.
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US President Barack Obama signed a measure into law Wednesday that extends US privacy protections to European citizens and allows them to take legal action in US courts. Obama praised the law for ensuring "everybody's data is protected in the strongest possible way with our privacy laws - not only American citizens, but also foreign citizens."
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Republican Nevada Governor Brian Sandoval is reportedly among the candidates being considered as Obama's nominee to replace the late US Supreme Court Justice Antonin Scalia. The Washington Post was the first to report on the vetting of Sandoval, with other media sources later confirming the news. A former federal judge, Sandoval is described as a centrist, and his nomination would likely be seen as an effort to win over recalcitrant Republicans. Senate Republicans have recently said they will not hold hearings on any Supreme Court nomination made by Obama. The GOP has argued the nomination should be made by the next president, but Obama has stressed he will fulfill his constitutional duty.
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Obama said he is "very cautious about raising expectations" on a Syrian ceasefire due to go into effect this week. "If, over the next several weeks, we can see some lessening of the violence that's been wracking that country, then that provides us a basis to build a longer-term ceasefire both in the north and the south," Obama said after discussing the matter in the Oval Office with Jordan's King Abdullah.
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Brazil's economy took another blow as Moody's downgraded the country's debt rating and changed the outlook to negative. Moody's dropped the rating two notches from Baa3 to Ba2, which is considered junk. The move is more bad news for Brazil, whose bonds already had been downgraded by Fitch and Standard & Poor's. Moody's cited the difficulties the government has had in getting austerity measures through parliament as its reason.
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BROKER RATING CHANGES
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TRADERS: JEFFERIES RAISES PETROFAC TO 'BUY' ('HOLD')
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BERENBERG CUTS NEXT TO 'HOLD' ('BUY') - TARGET 7300 (7600) PENCE
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EXANE BNP CUTS SEGRO TO 'NEUTRAL' ('OUTPERFORM') - TARGET 490 PENCE
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COMPANIES - FTSE 100
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UK telecoms regulator Ofcom said BT Group's Openreach division must be reformed to better serve customers and businesses, and that BT "must open up" its network. Although the regulator has not enforced a structural separation of the division, it said that "if necessary", it reserves the right to require BT to spin off Openreach as an entirely separate legal entity with its own shareholders, as part of plans to reform Openreach's governance. The comments were made as part of Ofcom's initial findings from its extensive review of the UK digital communications market, and said that it is announcing a new strategy to promote the large-scale rollout of new ultrafast broadband networks, based on cable and fibre lines, as an alternative to the partly copper-based technologies currently being planned by BT.
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Lloyds Banking Group lifted its payout to shareholders and declared a special dividend in a return of capital, even as the bank's 2015 profit took a dent from a new GBP2.1 billion charge for the payment protection insurance scandal. The bank raised its dividend for the year to 2.25 pence per share from 0.75p in 2014, and declared a special payment of 0.5p in addition. Pretax profit fell to GBP1.64 billion in 2015 from GBP1.76 billion in 2014. Underlying profit, which excludes asset sales and the cost of PPI provisions, rose to GBP8.11 billion from GBP7.76 billion. The total PPI provision for the year was GBP4.0 billion, up from GBP2.2 billion in 2014, including a fourth-quarter charge of GBP2.1 billion.
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RSA Insurance Group reported a 43% jump in annual operating profit, beating analyst expectations, and raised its full-year dividend to 10.5 pence from 2.0p the prior year. Operating profit before tax rose to GBP523 million in 2015, the London-listed insurer said, up from GBP365 million at actual exchange rates and from GBP334 million at constant currency. Analysts had expected operating profit of GBP481.0 million for the year, according to company-compiled consensus estimates.
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Merlin Entertainments reported growth in profit and revenue in its recently-ended financial year, despite a tough summer when a rollercoaster crashed at Alton Towers, and said it has signed a partnership deal with Big Bus Tours. The theme park and attractions operator said pretax profit in the year ended December 26 rose to GBP237 million from GBP226 million the year before, as revenue increased by 2.3% to GBP1.28 billion from GBP1.25 billion. Merlin will pay a total dividend of 6.5 pence per share, a 4.8% increase on the 6.2p paid the year before.
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Anglo-Dutch business information group RELX expressed confidence for a further growth in 2016, as it reported a rise in pretax profit for 2015. It reported a pretax profit of GBP1.31 billion, up from GBP1.23 billion in 2014, as revenue rose to GBP5.97 billion from GBP5.77 billion. It proposed a full year dividend of 29.7 pence, up from 26.0 pence in 2014 for RELX PLC. RELX said it had completed GBP500 million in share buybacks in 2015, and expects to undertake share buybacks of GBP700 million in 2016.
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St James's Place lifted its full-year dividend by 20% as the wealth manager's operating profit beat analyst expectations. Operating profit, stated on an embedded value basis, rose to GBP660.2 million in 2015 from GBP596.4 million, beating analyst expectations of GBP553.4 million, though IFRS profit before shareholder tax fell to GBP151.3 million from GBP182.9 million. St James's Place said it will pay a dividend of to 27.96 pence per share, up 20% year-on-year.
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South African paper and packaging group Mondi said its pretax profit rose 29% in 2015 thanks to strong and profitable trading across its operations, prompting a 24% hike to its dividend payout. Mondi said its pretax profit for the year to the end of December rose to GBP796.0 million from GBP619.0 million a year earlier, as revenue grew to GBP6.82 billion from GBP6.40 billion, a 7.0% rise. The group will pay a final dividend of 37.62 euro cents per share, taking its total dividend to 52.0 cents, up 24% year-on-year. Mondi added it has agreed a deal to sell its uncoated fine paper operations in Austria to a joint venture subsidiary, Mondi SCP. Mondi owns 51% of the SCP business, with the rest owned by Eco-Invest AS, and the unit owned its uncoated fine paper mill in Slovakia.
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Capita said it is looking for organic revenue growth of at least 4.0% in 2016, as the outsourcer reported lower pretax profit in 2015. Pretax profit fell to GBP112.1 million in 2015, from GBP292.4 million in 2014. On an underlying basis, which is stated before the cost of business exits and other items, pretax profit rose to GBP585.5 million from GBP535.7 million. Capita lifted its dividend for the year as a whole to 31.7 pence from 29.2p.
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British American Tobacco reported growth in profit in 2015 but a decline in revenue as it continued to be hit by negative currency movements throughout the year. The tobacco giant said pretax profit in 2015 grew to GBP5.86 billion from GBP4.85 billion in 2014, even though revenue fell by 6.2% to GBP13.10 billion from GBP13.97 billion. BAT said revenue declined as a result of adverse movements in foreign exchange rates, and that revenue would have risen by 5.4% to GBP14.72 billion if currencies had remained constant. BAT will pay a dividend of 154.0 pence per share for the year, which is a 4% increase on the 148.1p paid the year before.
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Personal care and household products company Unilever late Wednesday said Marijn Dekkers will succeed Michael Treschow as the company's chairman. Dekkers is currently chief executive of German pharmaceutical company Bayer but will step down from that role at the end of April. He will be nominated for election to the Unilever board at the annual general meeting in April, and Treschow will retire at the same time.
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The legal troubles facing miner BHP Billiton deepened after it emerged that executives at its Brazilian joint venture are facing murder charges over the Samarco tailings dam burst, The Times reported. The allegations, which may lead to criminal charges being brought against the executives, came after BHP warned it may take years to draw a line under the liabilities arising from the dam burst. Police in the Minas Gerais state in Brazil, where the mine disaster took place, ordered the arrest of six Samarco executives, including its chief executive, accusing them of "aggravated homicide".
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COMPANIES - INTERNATIONAL
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Sharp's board decided to accept JPY700 billion, or USD6.25 billion, takeover offer from Taiwanese Foxconn Technology Group, according to media reports, citing people familiar with the situation. Details of the arrangement have yet to be announced. Sharp's board approved the bid from Foxconn, which is formally known as Hon Hai Precision Industry, reports specified. Sharp had faced a choice between Hon Hai's takeover bid and support from the Innovation Network of Japan, a state-backed fund.
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HP reported a drop in profit for the first quarter hurt largely by a 12% drop in revenues as the company continues to struggle with weak demand for PCs and printers. The computer and printer maker reporting its first quarterly results after splitting into an independent company reaffirmed its full-year financial guidance. HP's first-quarter profit dropped to USD592 million from USD1.37 billion the year before. Revenues for the quarter dropped 12% to USD12.2 billion from USD13.9 billion previously. On a constant currency basis, revenues were down 5%. Hewlett Packard Enterprise is scheduled to report its quarterly earnings on March 3.
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Belgian-American brewer Anheuser-Busch InBev posted lower profit for the fourth quarter, with a decline in revenue. However, organic revenue grew 7.5%, with revenue per hl growth of 7.7% in the quarter. For the quarter, AB InBev reported profit attributable to equity holders of the company slid to USD2.287 billion from USD2.527 billion. However, normalized profit attributable to equity holders of AB InBev rose slightly to USD2.561 billion from USD2.520 billion. Revenue for the quarter slid to USD10.723 billion from USD12.018 billion a year ago.
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German conglomerate Bayer reported its fourth-quarter net income climbed to EUR613 million from last year's EUR224 million. Sales rose 4.9% in the fourth quarter to EUR11.319 billion from EUR10.792 billion a year ago. HealthCare and CropScience contributed to this performance, while sales were down at Covestro.
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Deutsche Telekom reported that its 2015 net profit increased 11.3% year-over-year to EUR3.25 billion from EUR2.92 billion in the prior year. Adjusted net profit increased by almost 70% to EUR4.1 billion. Revenue increased 10.5% to EUR69.2 billion from the prior year. Deutsche Telekom expects revenue to increase further in 2016.
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AXA reported fiscal 2015 net income of EUR5.617 billion, up 3% from EUR5.024 billion last year. Underlying earnings increased to EUR5.574 billion from EUR5.06 billion in the previous year. Total revenue for the year rose 1% to EUR98.534 billion from EUR91.99 billion in the prior year. On a reported basis, revenues were up 7%.
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Thursday's Scheduled AGMs/EGMs

Zytronic
Home Retail Group (re sale of Homebase to Bunnings)
Zoopla
IDOX
Ebiquity
Banker Investment Trust
APC Technology
GLI Finance (EGM re Golf Investments proposals)
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By Tom Waite; thomaslwaite@alliancenews.com; @thomaslwaite

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