Next Share News (NXT)

LONDON (Alliance News) - Retailers Marks & Spencer and WH Smith Thursday reported better performances than of late, but still saw their shares decline as analysts worried that they still have a lot to do to fix their long-standing issues.

Marks & Spencer, struggling with falling womenswear sales for decades, reported a 1.9% increase in sales in the last quarter of its financial year, driven mainly by food and online sales. However, sales at its general merchandise unit, which include clothes and home products, also rose 0.2%.

That masked a host of issues however. Like-for-like sales at the merchandising unit were still down 0.6%, and the retailer had to heavily discount to shift stock, meaning profit margins came under pressure.

Chief Executive Marc Bolland said clothing sales had been better than expected during the period. However, the company remained cautious, saying that while consumer confidence had improved, the UK retail sector remains highly competitive, keeping a lid on prices.

Next Chief Executive Simon Wolfson sent a clear message to his rival when he said he would hand his share bonus of just under GBP4 million to 20,000 of the retailer's employees, handing them about GBP200 each. Next has just overtaken Marks & Spencer in terms of pretax profit for the first time, having already overtaken its market value.

WH Smith, meanwhile, raised its interim dividend by 15% after it reported a slight increase in pretax profit for the first of its financial year. However, the improvement was again down to cost cutting and sales continued to decline.

The book seller and stationer has been retrenching from the UK high street for many years, and some of its best stores are now at airports and railway stations. High street sales were down 7%, while travel sales were up 2%.

It said it will continue opening travel stores and more internationally. It wants to achieve cost cuts of GBP14 million for the full year, after GBP9 million in the first half.

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FTSE 100: Up 0.2% at 6,650.00
FTSE 250: Up 0.3% at 16,205.63
AIM ALL-SHARE: Up 0.1% at 847.50
GBP-USD: Down at 1.6768
EUR-USD: Up at 1.3867
GOLD: Up at USD1,323.00 an ounce
OIL (Brent): Down at USD107.37 a barrel

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Key UK Corporate News

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FTSE 100: Centrica-owned British Gas has been forced to make GBP5.6 million in payments following errors in its switching and renewal process for small businesses. UK energy regulator Ofgem found that the energy supplier wrongly blocked businesses from switching and failed to give some businesses notice that their contract was due to end. Resolution's insurance and pensions provider Friends Life is scrapping active member discounts, just two weeks after the UK government described the charges as "unfair" to deferred members. In a statement, Resolution said Friends Life will offer all its AMD schemes the chance to move to a single charge at the current active member rate, with immediate effect. Mumbai-headquartered Piramal Enterprises Ltd will sell its entire 11% stake in Vodafone India Ltd to Vodafone.

FTSE 250: Cairn Energy Deputy Chief Executive Mike Watts and Managing Director and Chief Financial Officer Jann Brown will not seek re-election to the board at its AGM in May, part of the company's "long-term succession planning" and will spend their notice periods trying to resolve the company's Indian tax issues. James Smith will take over the role of Finance Director. Greene King Chief Financial Officer Matthew Fearn has taken a temporary leave of absence to undergo urgent and important medical treatment. Oxford Instruments said that its performance for the full year to end-March was in line with the previous year. Ashmore Group suffered a decline in assets under management in its fiscal third-quarter, as a USD1.0 billion positive investment performance failed to offset USD6.2 billion in net outflows. Vedanta Resources said it failed to reach its revised mined metal production estimate at Zinc India, but posted strong full year production of oil and gas due to the ramp-up of operations at its Rajasthan Block. Hays expects full-year operating profit to be towards the top of the current range of market estimates, based on a good start to the second half overall and strong performances in key markets such as the UK and Germany. RPS Group has acquired UK-based wastewater consultancy Clear Environmental Consultants Ltd for up to GBP8.3 million, a deal aimed at developing its European business. 888 Holdings said group revenues rose 11% in the first quarter of its new financial year, as its core casino and poker products continue to drive the business forward. PZ Cussons said it has been trading in line with management expectations over the past few months, boosted by its personal care brands in Europe and despite challenging trading conditions in many of its markets.

AIM All-Share: Faroe Petroleum is a big gainer after it made a new gas discovery at its Solberg site and successfully drill stem tested an exploration well at its Njord production facility in the Norwegian Sea. Frontera Resources Corporation is also doing well after it has signed a farmout agreement with Varang Exploration Ltd to sell up to a 50% interest in its Taribani Field Complex in Georgia in return for a drilling programme at the site worth up to USD36 million. Physiomics is up after it said it will be demonstrating a new validation of its Virtual Tumour Clinical Platform at a workshop in France, with a study that shows the platform can be used to make accurate predictions of clinical outcomes. Mariana Resources is another gainer after it received a USD600,000 value added tax refund from the Argentinian Tax Authorities, and said it will use the money to to advance its gold and silver exploration, with its main focus in 2014 being to complete drill target definition at its Los Cisnes project. TrakM8 Holdings is up after it said pretax profit in its last financial year, excluding costs related to the acquisition of BOX Telematics Ltd, will be above its previous expectations after new projects boosted the margin in its engineering services business in the final quarter of the year. Motive Television is up after it said testing of its technology for Freeview Tablet TV will begin April 28. The Digital Technology Group testing the technology next month needs to approve it to be certified as Freeview compliant. Motive said it is seeking to have testing and approval completed in time to have the product on the store shelves in time for the World Cup in June. Strategic Minerals is a big faller after it raised roughly GBP1 million from new investors through a share subscription, issued shares to mining giant Glencore AG to pay off an obligation, and said it had identified about GBP650,000 of annual cost cuts.

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Top Economics And General

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The Federal Reserve held a special meeting on March 4, according to the minutes of the regularly scheduled meeting held a few weeks later. At the first meeting, policy makers discussed whether to change its communication on forward guidance, including its unemployment threshold. Then on March 19, the Fed officially voted to drop its 6.5% unemployment target for tightening monetary policy, calling the metric "outdated."
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UK house price rises accelerated in March and sales reached a six-year high, a latest survey showed. The house price balance in the UK climbed to +57 in March, the Royal Institution of Chartered Surveyors said. That was well above forecasts for +44, and it was up from the upwardly revised +47 in February (originally +45). House prices moved higher in every region of the country - led by sharp gains in London and the South East.
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House prices in the euro area sustained their falling trend in the final three months of 2014, data from Eurostat showed. The house price index for the 18-nation bloc dropped 1.4% year-on-year, after a 1.3% decline in the third quarter. In the June quarter of 2013, prices fell 2.2%
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EU harmonized inflation in France slowed in March largely due to a fall in petroleum prices, data from the statistical office Insee showed. The harmonized inflation rate fell more-than-expected to 0.7% in March from 1.1% in February. The rate was seen at 0.8%. Similarly, consumer price annual inflation eased to 0.6% from 0.9% in the prior month and stayed below the expected 0.7%.
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China's exports and imports declined unexpectedly in March, adding to evidence that suggests that the economy is struggling to achieve its targeted growth. Shipments dropped 6.6% year-over-year in March, confounding expectations for a 4.8% increase. However, the rate of decline slowed from the 18% slump in February, figures from the General Administration of Customs showed.
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Ukrainian interim President Oleksandr Turchynov offered pro-Russian protesters in the east amnesty from prosecution and more regional autonomy. Turchynov added that any amnesty would be conditional on the protesters laying down arms and vacating occupied buildings. "We will guarantee that the there will be no criminal investigation into those who hand over arms and give up buildings. I am ready to carry this out as a presidential decree," Turchynov told the parliament in Kiev, the Interfax Ukraine news agency reported.
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The Basel Committee published a final standard for calculating regulatory capital for banks’ exposures to central counterparties, moving to replace the interim capital requirements published in July 2012. The Basel Committee, a group of central banks, worked with the Committee on Payment and Settlement Systems and the International Organization of Securities Commissions in developing the final standard. It had a target of simplifying the underlying policy framework when developing the changes.
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Afternoon Watchlist (all times British Summer Time)

13:30 US Import Price Index
13:30 US Export Price Index
13:30 US Jobless Claims
15:30 US EIA Natural Gas Storage change
19:00 US Monthly Budget Statement

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Friday's Key UK Corporate Events

XP Power Interim Management Statement
Jupiter Fund Management Interim Management Statement
International Biotechnology Trust Full Year Results

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Friday's Key Economic Events (all times British Summer Time)

00:50 Japan BoJ Monetary Policy Meeting Minutes
00:50 Japan Domestic Corporate Goods Price Index
All Day IMF Meeting
02:30 China Consumer Price Index
02:30 China Producer Price Index
07:00 Germany Consumer Price Index
07:45 France Current Account
13:30 US Producer Price Index
14:55 US Reuters/Michigan Consumer Sentiment Index Preliminary

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By Steve McGrath; steve.mcgrath@alliancenews.com; @stevemcgrath1

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