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LONDON (Alliance News) - The following is a summary of top news stories Thursday.
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COMPANIES
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Next PLC reported higher profits and revenues for the financial year ended January 2014 driven by its online business, raised its dividend by 23%, and said it expects the UK consumer environment to remain far from buoyant. Although the retailer said the consumer economy steadily improved over the course of the last year, it remained fairly cautious on the UK consumer spending outlook, targeting brand sales growth of between 4% and 8% in the current financial year, with a pretax profit of between GBP730 million and GBP770 million. For the year ended January 24, Next increased its full year dividend by 23% to 129 pence, in line with earnings per share growth, as revenue excluding VAT increased 5.4% to GBP3.74 billion, up from GBP3.55 billion the prior year, and profits excluding exceptional costs rose 12% to GBP695.2 million, up from GBP621.6 million a year earlier, when excluding a GBP44.9 million profit gain.
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Resolution Ltd joined peers in trying to allay fears caused by Chancellor of the Exchequer George Osborne's annuities shake-up, under which people are to be given greater flexibility and choice in how they manage their pension pots. Shares in UK annuity providers have plummeted since Osborne on Wednesday unveiled as part of his Budget presentation plans to remove the current requirement for most people to buy annuities in order to turn their pensions pots into income in retirement. Although people will still be able to take out annuities, they will also be able to take out their pension savings in a lump sum or draw them down over time. The government has published a consultation on how to implement the changes.
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Lloyds Banking Group PLC said it has sold a portfolio of European commercial real estate loans for about EUR280 million as part of its strategy to scale down its non-core run-off portfolio. Separately, Lloyds said the exchange offer it recently made to bondholders it tapped for much-needed capital in 2009 will be larger than previously expected as a result of "substantial" demand.
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Testing company Exova Group Ltd said it intends to proceed with an initial public offering on the London Stock Exchange main market in April, adding to a growing pipeline of upcoming new issues as the London IPO market continues to recover after several years of weak activity. The company said new and existing shares will be offered in the IPO, with the new shares set to raise gross proceeds of about GBP110 million for the company. That will be used to repay some outstanding borrowings it has under existing financing arrangements, including redeeming its publicly traded bonds.
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United Utilities Group PLC said it expects to report revenue and underlying profit in its upcoming full-year results that are higher than the year before. The major water firm said trading is currently in line with the group's expectations for the year ending March 31. It said customer service continues to improve, and it remains ahead of schedule in delivering its 2010-15 regulatory outperformance targets.
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GlaxoSmithKline PLC said that a late stage trial of its MAGE-A3 cancer immunotherapeutic for patients with non-small-cell lung cancer did not meet two of its co-primary endpoints, as it failed to extend disease-free survival compared to a placebo.
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Mitie Group PLC said its expects to deliver results for the current financial year that are in line with market expectations after it continued to perform strongly in recent weeks, particularly in facilities management. In a trading update, the outsourcing company said it won a new contract in February with the UK Home Office to manage and maintain two immigration removal centres, valued at GBP180 million over eight years, with a potential further three year extension that would take the total value to GBP250 million. It also said it successfully re-tendered for its Network Rail facilities management contract, a deal valued at GBP75 million over five years. It said this contract was its biggest re-bid for 2014.
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Cable tying and protection company HellermannTyton Group PLC saw its shares fall after Doughty Hanson sold its remaining stake in the business. Doughty was joined by some members of the HellermannTyton management team in selling 46.9 million shares, or a 21.8% stake in the business, at GBP3.05 pence a share, raising gross proceeds of about GBP143.0 million.
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Betting firm William Hill PLC said the UK government's decision to increase the tax rate on high-speed, high-stake gambling machines to 25% next year will cost the business GBP22 million, worse than its previous estimate of GBP16 million. William Hill said the cost is calculated against its 2013 results. UK Chancellor of Exchequer George Osborne said in his annual budget statement on Wednesday that the government will raise duty on gambling machines, also known as fixed-odds betting terminals, to 25% from 20%.
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British luxury brand Mulberry Group PLC said that Chief Executive Officer Bruno Guillon is stepping down with immediate effect, after only two years at the helm. Mulberry said that Godfrey Davis, who is currently non-executive chairman and was previously chief executive officer, will become executive chairman until a successor is found.
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MARKETS
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UK stock indices were down after Federal Reserve Chair Janet Yellen suggested on Wednesday that the period of time between the end of the US central bank's tapering of its bond purchases and its first rate hike could be as little as six months.
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FTSE 100: down 1.2% at 6494.38
FTSE 250: down 1.1% at 16104.81
AIM ALL-SHARE: down 0.9% at 861.38
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The dollar has strengthened against the pound and euro on Yellen's hawkish comments.
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GBP-USD: down at USD1.6517
EUR-USD: down at USD1.3770
GOLD: down at USD1326.35 per ounce
OIL (Brent): down at USD105.64 a barrel
(changes since end of previous GMT day)
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ECONOMICS AND GENERAL
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The US central bank could end its buying spree of government-backed bonds by late this year and begin tightening its near-zero benchmark interest rate in the first half of 2015, Federal Reserve Chairwoman Janet Yellen said Wednesday. The Fed's monetary policy committee on Wednesday further reduced the pace of bond buying to USD55 billion a month starting in April, and said that its unprecedented interest rate target would likely remain near zero "for a considerable time" after the end of bond buying. Yellen noted later that "if we continued to reduce the pace of our asset purchases in the manner that we have in measured steps," bond purchases were on a path to conclude in autumn 2014, though not predetermined. She said the "considerable time" before raising interest rates was "hard to define, but, you know, probably means something on the order of around six months or that type of thing." Yellen noted that the labour market and inflation will be fluid and complicated factors: "It depends what conditions are like."
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Confidence among British households regarding their personal finances eased modestly in March, but hovered near February's record high signalling that the squeeze on finances remained less marked than seen over the past five years, survey data published by Markit Economics revealed. The seasonally adjusted household finance index, which measures the overall perception of financial well-being, dropped to 41.9 in March from 42.1 in February, which was the highest score in the history of the survey. Index readings below 50 suggest weakness in confidence.
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Germany's producer prices fell for the seventh successive month in February, and the rate of decline matched economists' forecast, latest data revealed. The industrial producer price index decreased 0.9% in February from the same month of last year, the Federal Statistical Office said. This followed a 1.1% contraction in January. The February outcome matched economists' expectations. Prices have now fallen for the seventh consecutive month.
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Representatives from the European Parliament and EU governments reached a provisional deal on a scheme to shield taxpayers from bank bailouts. The mechanism to wind down troubled eurozone banks is to become the second element of a crisis-thwarting banking union, considered key to restoring trust in the currency bloc. Details of the deal, which was reached after 16 hours of talks, were not immediately available. It still requires the support of the heads of the respective political groups in parliament, who were to meet later Thursday.
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Economic sanctions are on the table as EU leaders meet Thursday to try to ratchet up pressure on Moscow, diplomats said, while Russia prepares to complete the legal process of annexing Crimea by the end of the week.
Europe needs a "determined and united response" to the developments in Crimea, German Chancellor Angela Merkel told parliament in Berlin before travelling to Brussels for talks with her 27 EU counterparts. Merkel announced that new names would be added to a list of 21 Russians and Crimeans hit this week with EU asset freezes and travel bans, but it was unclear whether the bloc's leaders would expand the measures from individual sanctions to those having national economic effects.
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Ukraine is drawing up plans to withdraw its military forces from Russian-controlled Crimea, a top government official said Wednesday. National Security and Defence Council chief Andriy Parubiy said the government was preparing a plan to relocate troops from the peninsula to mainland Ukraine, local media reported. He added that Ukraine would ask the United Nations to declare Crimea a demilitarised zone. The Council also ordered a plan to evacuate Ukrainian citizens who do not want to remain in Crimea.
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Objects possibly related to the missing Malaysia Airlines plane have been spotted in the southern Indian Ocean, Australian officials said. "Following specialist analysis of this satellite imagery, two possible objects related to the search have been identified," Prime Minister Tony Abbott told parliament. One of the objects floating 2,500 kilometres south-west of Perth was 24 metres long, an official of the Australian Maritime Safety Authority (AMSA) told reporters.
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The Dutch grand coalition of liberals and social democrats suffered wide losses in Wednesday's local elections amid resistance to austerity measures, with left-leaning opposition parties making gains, according to news reports. The social-democratic Labour Party, PvdA, lost the cities of The Hague and Amsterdam to the centre-left party Democrats 66 (D66), as well as Rotterdam to a green party, according to a report on DutchNews.nl, with more than 90% of the votes counted.
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Greek banks may require more capital than the Bank of Greece estimated this month, the European Commission, European Central Bank and International Monetary Fund said in a joint statement. The lenders, known as Troika, on Wednesday reached a preliminary agreement to unlock the next tranche of bailout funds. Authorities observed that the economy is beginning to stabilize and is poised for a gradual resumption of growth.
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Syria has removed almost half of its chemical arsenal, an international watchdog overseeing the process said.
It has scrapped 45.6% of its Category 1 chemicals, considered the most hazardous, along with less dangerous Category 2 chemicals, the Organization for the Prohibition of Chemical Weapons said. Syria remains committed to the destruction of its entire arsenal by June 30, The Hague-based watchdog said in a statement late Wednesday.
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