Ocado Share News (OCDO)

LONDON (Alliance News) - The following is a summary of top news stories Tuesday.
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COMPANIES
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BP and BG Group joined Royal Dutch Shell in slashing their capital expenditure budgets for 2015 and booking impairments and writedowns on assets in 2014, in response to the recent slide in oil prices. The moves by the big UK oil players are being reflected across the industry. US oil major Chevron Corp has cut its 2015 capital budget by 13% compared with 2014, while peer ExxonMobil Corp, which plans to reveal its 2015 spending plans in early March, slashed its share buyback programme in the first quarter by more than half to USD1 billion. The world's fifth oil major, Total SA of France, has indicated it will cut capital expenditure by 10% this year and put two oilsands projects on the back burner for a long time.
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BP reported a drop in earnings during the fourth quarter of 2014, and reacted to the recent steep fall in oil prices by announcing further cuts to its capital expenditure budget for 2015 and significant impairment charges. Underlying cost replacement profit for the fourth quarter ended December 31 was USD2.2 billion, significantly lower than the USD2.8 billion reported a year earlier, but higher than analysts' expectations of around USD1.57 billion. Full year underlying replacement cost profit totalled USD12.1 billion, down from the USD13.4 billion reported in 2013. BP has slashed its capital expenditure for 2015 to USD20 billion compared with its previous budget of USD24 billion to USD26 billion. The reduction reflects BP's decision to postpone "marginal projects" in its upstream division and to reduce exploration expenditure.
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BG Group reported significant impairment charges driven by low commodity prices and said it will slash its capital expenditure budget by up to USD7 billion in 2015, as it reported fourth-quarter earnings that outperformed analysts' expectations. The company reported profit excluding impairment charges of USD915 million in the fourth quarter ended December 31, down 19% from the USD1.13 billion reported a year earlier, but higher than analysts' estimations of only USD576 million. The company booked a USD2.33 billion pretax loss for the full year, which includes significant impairment charges, compared to a USD3.88 billion profit in 2013. Revenue for the full-year remained fairly flat at USD19.28 billion.
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Royal Dutch Shell said it will launch a first public consultation regarding plans to decommission the company's Brent oil and gas field in the UK North Sea, which will potentially pave the way for further consultations to decommission the entirety of the field. The first consultation will last for 30 days and will begin on February 16 and will discuss the decommissioning of the Brent Delta platform, which is one of four installations on the Brent oil and gas field and in which Shell holds a 50% stake in alongside Esso Exploration and Production UK, part of the US's ExxonMobil.
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Capita has agreed to buy customer contact management services company avocis for EUR210 million on a cash-free, debt-free basis. The FTSE 100-listed outsourcing company said it was buying the company from an unnamed private equity owner and said avocis has a leading position in the customer contact management sectors in Germany, Switzerland and Austria.
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Aberdeen Asset Management said assets under management dropped slightly in the first quarter of its financial year as weak investor sentiment hit inflows in December, although it said flows returned to more normal levels in January. The asset manager said assets under management stood at GBP323.3 billion at the end of December, down from GBP324.4 billion at the end of September, after it booked gross inflows if GBP11.3 billion for the fiscal first quarter as a whole but outflows also increased as the emerging market backdrop remained tough.
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Associated British Foods said it will write down its investment in wheat-fed bioethanol joint venture Vivergo Fuels, and will book an exceptional charge of GBP98 million in its first-half results as a result. The joint venture is with BP and DuPont in the UK. It has been hit by the steep fall in crude oil and bioethanol prices, and the further weakening of the euro against sterling.
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Inspection and testing services company Intertek Group said it has acquired Adelaide Inspection Services for AUD12 million in cash. AIS provides non-destructive testing services primarily to the power generation sector, along with support services to construction, oil, gas and mining industries.
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Ocado Group said it swung to its first ever annual profit on the back of surging revenue over the year, as higher customer numbers offset a fall in the average price of a shopping basket. Shares in the online grocery delivery service rose after it said its statutory pretax profit for the 52 weeks to November 30 was GBP7.2 million, compared to a GBP12.5 million loss posted a year earlier. It is the first time Ocado has posted an annual pretax profit since it was founded in 2000. The company said its revenue for the year rose 20% to GBP948.9 million from GBP792.1 million in 2013, while gross sales increased 15% to GBP972.4 million from GBP843 million.
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TalkTalk Telecom Group said it expects its full-year earnings before interest, tax, depreciation and amortisation to be at the lower end of market expectations as a result of buying Tesco's loss-making Blinkbox business, and due to lower cost savings than planned. The telecommunications firm said its revenue was up 4.2% to GBP449 million in its third quarter to end-December from GBP431 million a year before. TalkTalk said that cost savings in its current year are likely to be GBP10 million to GBP15 million lower than it had previously planned.
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ICAP faces an EU fine this week for allegedly facilitating cartels on yen-denominated inter-rate benchmarks, as Brussels tackles the holdouts in rate-rigging probes that have already resulted in about EUR1.7 billion in penalties, the Financial Times reported. The world’s largest interdealer broker has strongly denied wrongdoing, refused to settle, and has informed the European Commission that it will appeal any fine as wrong in fact and law, the FT said, citing people involved in the case.
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Melrose Industries confirmed it will return GBP200 million, or 18.7 pence a share, to its shareholders, using part of the net proceeds it received when it sold its Bridon business for GBP365 million. The company had already indicated it would return some of the proceeds to its investors, using the rest to pay down borrowings. Its shareholders will get one B share or one C share for every existing share they hold, as well as 13 new shares for every 14 existing shares in an associated share capital consolidation.
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St Modwen Properties reported a surge in pretax profit for its recent financial year, prompting a hike to its dividend as its net asset value and property profits both rose over the period. The FTSE 250-listed property company said its pretax profit for the year to November 30 was GBP138.1 million, up 68% from the GBP82.2 million reported last year. The group hiked its total dividend for the year to 4.6 pence per share, up from 4 pence per share last year.
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MARKETS
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London stocks are trading higher after the UK Markit construction Purchasing Managers' Index came in above economists' expectations and the Financial Times reported that the newly-elected Greek government outlined proposals for ending the confrontation with its creditors by swapping outstanding debt for new growth-linked bonds, running a permanent budget surplus, and targeting wealthy tax-evaders.
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FTSE 100: up 1.1% at 6,859.22
FTSE 250: up 1,1% at 16,534.73
AIM ALL-SHARE: up 0.2% at 692.59
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The pound is up against the dollar after UK construction PMI unexpectedly rebounded in January.
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GBP-USD: up at USD1.5057
EUR-USD: up at USD1.1351

GOLD: up at USD1281.72 per ounce
OIL (Brent): up at USD56.41 a barrel

(changes since end of previous GMT day)
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ECONOMICS AND GENERAL
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The expansion in the UK construction sector quickened unexpectedly in January, survey data from Markit Economics showed. The Markit/Chartered Institute of Procurement & Supply Purchasing Managers' Index rose to 59.1 in January from the seventeen month low of 57.6 in December. The score was forecast to fall to 57 in January. This marked the twenty first month of expansion, though the latest reading indicated the second slowest rate of growth since September 2013. A reading above 50 signals expansion. Residential building activity rose for the twenty fourth successive month in January.
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Eurozone producer prices declined at the fastest pace in five years during December, figures from Eurostat showed. Producer prices fell 2.7% year-on-year in December, faster than 1.6% decline in the previous month. Economists had forecast a 2.5% fall for the month. The latest decline in producer prices was the biggest since December 2009, when they fell 3%.
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Italy's harmonized consumer prices dropped for the second straight month in January due to falling energy prices, preliminary data from Istat showed. The harmonized index of consumer prices fell 0.4% from last year, following a 0.1% drop in December. The rate of decline matched economists' expectations. On a monthly basis, the HICP was down 2.4% in January versus flat growth a month ago. The monthly fall also came in line with expectations.
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The newly-elected Greek government outlined proposals for ending the confrontation with its creditors by swapping outstanding debt for new growth-linked bonds, running a permanent budget surplus and targeting wealthy tax-evaders, the Financial Times reported. The country's new finance minister, Yanis Varoufakis, told the FT the government will no longer call for a headline write-off of Greece's EUR315 billion foreign debt and would instead request a "menu of debt swaps" in order to ease the burden on its finances.
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Australia's first cut in interest rates in some 17 months took the cost of borrowing to a low last seen in the 1990s. The Reserve Bank announced a cut of 25 basis points, which brings the interest rate to 2.25%. Glenn Stevens, head of monetary policy at the central bank, said the cut came in light of the Australian dollar's poor performance against the US dollar.
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The Reserve Bank of India retained its key benchmark rates unchanged as widely expected but lowered its statutory liquidity ratio to create space for banks to expand credit. The central bank retained its key repo rate at 7.75% and its reverse repo rate at 6.75% at its sixth bi-monthly monetary policy review on Tuesday. The RBI lowered its key rate by a quarter basis point in an unscheduled review last month.
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US President Barack Obama confronted the opposition-controlled Congress with a proposal Monday for a USD4 trillion dollar budget. The 10-year measure proposes tax increases on businesses and the highest-earning individuals and boosts spending on infrastructure and social programmes without eliminating the federal budget deficit. The presidential budget proposes higher defence spending but has few other provisions that would garner support from Republican legislators.
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The top leader of pro-Russian separatists in eastern Ukraine announced an all-out mobilization, after the latest efforts for peace talks foundered. Alexander Zakharchenko said that the separatists would mobilize "as many people as necessary" to boost their forces to 100,000 in both the Luhansk and Donetsk regions, according to video of his comments released on the self-declared Donetsk People's Republic website. The New York Times reported Monday that the US was now "edging toward" supplying weapons to Kiev, but a White House spokesman denied weapons would be delivered "in the near future."
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