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LONDON (Alliance News) - GlaxoSmithKline Thursday confirmed that it will appoint Royal Bank of Scotland Group Chairman Philip Hampton as non-executive chairman from September 1, 2015, or at an earlier date if released from his other commitments.
The pharmaceutical company said Hampton will succeed current Chairman Christopher Gent, initially joining the board as a non-executive director at the start of 2015, before taking on the role of deputy chairman April 1, 2015.
Hampton became the chairman of RBS in February 2009, replacing Tom McKillop, as the bank turned to his stewardship at what was the beginning of its restructuring process in the wake of the financial crisis and its bailout by the UK government.
Together with former Chief Executive Stephen Hester, who succeeded Fred Goodwin, Hampton led the bank as it sold off numerous assets in order to shore up its balance sheet. Current Chief Executive Ross McEwan has focused the bank's activities on UK lending, a significant departure from the bold expansion strategy pursued by Goodwin in the years leading up to the crisis.
Hampton has previously served as chairman of J Sainsbury PLC and group finance director at Lloyds TSB Group, BT Group PLC, British Gas and British Steel PLC.
Sports Direct International continued its record of taking stakes, or options to buy stakes, in struggling retailers as it entered into a put option agreement to acquire a 0.28% stake in Tesco.
Sports Direct said its maximum exposure under the put option is limited to around GBP43 million. The 0.28% stake represents 23 million Tesco shares.
The news comes as Tesco's woes continue. This week the UK's biggest supermarket chain saw GBP2 billion wiped off its market capitalisation after it said it had overstated its first-half pretax profit guidance by GBP250 million. Tesco has now cut its outlook and suspended four executives while it undertakes a thorough investigation into the profit overstatement.
Sports Direct, however, remains confident in its prospects, "This investment reflects Sports Direct's growing relationship with Tesco and belief in Tesco's long-term future," the company said in a statement.
Ryanair saw its shares rise after raising its passenger numbers forecast for the current financial year and said it now expects its net profit to come in towards the top end of its previous guidance.
The low-cost airline said the recent launch of its new service for business travellers and the efforts it is making to improve its customer relations are paying off and it now expects to fly 87 million customers in the year to March 31, 2015, up from its previous forecast of 86 million, and expects its net profit for the fiscal year to be towards the top end of its previously guided EUR620 million to EUR650 million range.
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Markets: The FTSE 100 gave up slim early gains, and is now flat with the mining sector providing a big drag. Major European markets are holding on to early strength, supported by comments from European Central Bank President Mario Draghi, which have simultaneously pushed the euro to a 22-month low against the dollar.
Ahead of US initial jobless claims data at 1330 BST, US stock markets look set to open a little lower following strong gains on Wednesday. Apple shares may be in focus following the news that the US technology giant has been forced to pull its latest operating system in light of numerous complaints, just days after launching its two new iPhone models
Futures markets currently show the DJIA flat, while the S&P 500 and Nasdaq Composite are both set to open 0.1% lower.
FTSE 100: flat at 6,704.20
FTSE 250: flat at 15,536.36
AIM ALL-SHARE: up 0.1% at 754.33
GBP-USD: down at 1.6294
EUR-USD: down at 1.2715
GOLD: down at USD1,210.05 an ounce
OIL (Brent): up at USD97.17 a barrel
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Other Top UK Corporate News
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Direct Line Insurance Group said it has agreed to sell its international division, which is comprised of its Italian and German operations, for EUR550.0 million to Mapfre SA, and said it expects to return substantially all of the net proceeds to shareholders. Direct Line said it expects the sale to result in a pretax gain on disposal of about GBP160.0 million. It said further details of the capital return will be disclosed upon completion of the deal, but noted that its "strong capital position" was the reason it expects to make the return.
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Hammerson said it will conduct a share placing to raise about GBP400 million to help fund the GBP180 million acquisition of the rest of the Highcross shopping centre in Leicester that it doesn't already own, a GBP100 million investment in a new outlet shopping centre venture, and GBP120 million to fund existing developments. In a statement, the retail-focused real estate investment trust said it will place 71.3 million new shares, which is 9.99% of its existing issued share capital.
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Vodafone Group has sealed a partnership with Dresden University of Technology under which the pair will research and develop 5G technology. Vodafone said the partnership is part of a programme to partner with universities, technology companies and industry groups on developing the next generation of wireless technology. Dresden University has recently opened a 5G lab, which will offer specific facilities for researchers to test and evaluated a wide range of 5G technologies, Vodafone said. Vodafone has separately admitted it will delay decisions on entering the home broadband and television market until BT Group launches its consumer mobile offering, the Telegraph reported. BT is looking to re-enter the consumer mobile market early next year, a move that is expected to significantly undercut rivals who offer package deals for households.
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BHP Billiton Chief Executive Andrew Mackenzie has earned a pay package of USD8 million in his first year at the company's helm, about half the amount his predecessor Marius Kloppers earned in his final year. BHP Billiton, which is grappling with falling commodity prices, has also put a freeze on the remuneration to be paid to Mackenzie and other members of the company's senior management team for fiscal 2015.
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A federal judge in New Orleans rejected BP's request for recouping millions of dollars of overpayments made to some claimants under the 2010 Gulf of Mexico oil spill settlement. The oil giant found that it ended up overpaying the victims of the oil spill after the court revised the method for calculating the damages. It claimed that the families and companies were reportedly allowed to inflate their losses by the administrator in charge of processing the claims. At a court hearing in New Orleans, US District Court Judge Carl Barbier earlier in the day heard out attorneys for BP and claimants before reaching the decision. BP will reportedly appeal the decision.
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Irish drug company Shire said it will pay USD56.5 million to settle a probe into its US sales and marketing practices for Adderall XR, Vyvanse Daytrana, Lialda and Pentasa for a period up to 2010. Its also paying USD2.9 million to resolve a similar complaint in Louisiana.
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CSR shares topped the FTSE 250 after the group said the Takeover Panel has granted an extension to the deadline for Microchip Technology to make bid for the company. Shares in CSR were up 5.3% to 767 pence in early trade after the chipmaker said the deadline for the US semiconductor maker to make a bid for the company had been extended to October 15 in order to allow the two companies more time to conclude their discussions. CSR rejected a takeover bid from Microchip on August 28 as it felt the original bid was too low.
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UK Mail Group, one of the smaller competitors to Royal Mail Group, saw its shares slide early Thursday after it warned that parcels volumes had been below expectations in the three months to end-September, particularly in the latter weeks. In a trading update, the letters and parcels handling company said overall revenue for the six months to end-September, the first half of its financial year, are expected to be some 1% below the year-earlier period. Adjusted for one less working day in the period this year, underlying revenue will be flat, it said.
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The Real Good Food Co it will now take up its pricing complaint about the sugar subsidiary of Associated British Foods with the European Competition Authorities in Brussels, and said it has now negotiated two new supply contracts, which it hopes will stabilise its sugar business going forward.
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Micro Focus International said Deputy Chairman and non-Executive Senior Independent Director David Maloney has stepped down with immediate effect, in a statement ahead of its annual general meeting. The company said that, as it has continued to trade in line with guidance since its last update in August, it will provide no further trading update at the annual general meeting.
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UK pubs and restaurant operator Mitchells & Butlers said total sales in the 51 weeks of its financial year grew by 3.8%, helped by better food and drink sales, but said that after strong demand in July following the World Cup, trading conditions in August slumped. In a pre-close trading update, the company known for brands including Harvester, Toby Carvery and O'Neill's bar, said like-for-like sales in the 51 weeks to September 20 were up 0.6%, however it said growth in the nine weeks to September 20 was minimal, up only 0.1% as food sales grew by 0.1% and drink sales declined by 0.2%.
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Cairn Energy said it has signed a deal to farm-out a 10% interest in the Catcher oil field and adjacent acreage in the UK North Sea in return for Dyas UK Ltd funding exploration and development costs up to a cap of USD182 million, cutting its own development bill for the field by about USD380 million.
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AIM Movers
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Surface Transforms is the best-performing AIM stock after it signed a pre-production contract with an unnamed international aerospace system supplier for the supply of its carbon ceramic brake discs to a US military aircraft. Shares in Cellcast are up after the company said it swung to a pretax profit in the first-half of the year, as it cut costs and booked a one-off payment of nearly GBP3.0 million from Sony subsidiary Entertainment Networks after it agreed the early termination of Cellcast's rights to manage the Freeview channel Movie Mix. SyQic is also up after it expressed confidence for the future and posted a rise in pretax profit in the half year to end-June, with a more than quadrupling in revenue driven by the recovery of its Indonesian business. Proteome Sciences is doing well after its PS Biomarker Services arm won a contract with Genting TauRx Diagnostic Centre Sdn Bhd to develop diagnostic products. At the other end of the market, Inditherm is the worst-performing company on AIM after reporting that it swung to a pretax loss in the first-half of the year as its margins were hit by a shift towards exports and its neonatal intensive care product distribution business, and it warned that the situation was likely to continue. Falanx Group is lower, even though the consultancy reported its first pretax profit driven by the continued turmoil in the Middle East and predicted that it will grow significantly over the next five years. Its profit was small, however, as it spent on recruiting new staff, establishing its cyber defence operations, and doing due diligence on potential acquisition targets. Clean Air Power is down after it had to withdraw its US Genesis EDGE Dual-Fuel test engine from the testing process until it has sorted out issues that were found with the selective catalytic reduction after-treatment system on the base diesel engine. Havelock Europa is another faller after it posted a flat loss in the first-half, but reported a decline in revenue amid a challenging business environment and said its full-year results will be dependent on the fourth quarter.
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Top Economics And General
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Eurozone money supply growth accelerated in August while lending to private sector continued to decline, data from the European Central Bank showed. M3 money supply increased 2% year-on-year in August, faster than the 1.8% rise in July. Likewise, M1 growth improved to 5.8% from 5.6% in July. The three-month average of the annual growth rates of M3 from June to August increased to 1.8% from 1.5% in the period from May to July.
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Ukraine wants to apply for EU membership in 2020, President Petro Poroshenko said, after the implementation of a reform programme. Earlier this month, Ukraine ratified a far-reaching association and trade agreement with the bloc. The EU says the agreement is a necessary step for membership, but does not automatically guarantee it. Poroshenko told a conference of judges in Kiev that the Strategy 2020 programme contains 60 reforms, according to local media reports.
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Airstrikes carried out late Wednesday against Islamic State targets in Syria hit oil refineries that the US says provide a revenue stream for the militants, the Pentagon says. The oil refineries provide about USD2 million a day in revenue for the Islamic State, Rear Admiral John Kirby says. Kirby spoke after the raids ended and all aircraft returned safely. The US was joined by Saudi Arabia and the United Arab Emirites in carrying out the strikes, Kirby says.
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US President Barack Obama called Wednesday for the global community to join the fight against Islamic State militants in Iraq and Syria. Obama also told the United Nations General Assembly in New York that the world should unite against pressing global challenges, including Russian aggression in Europe and the Ebola outbreak in West Africa. But he stressed the greatest challenge to peace and prosperity was posed by Islamist extremism.
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China is debating whether to oust the head of its central bank due to disagreements over financial policy, The Wall Street Journal reported. The departure of People's Bank of China Governor Zhou Xiaochuan would be justified on the grounds of the 66-year-old's age, the report said, citing party officials. But disagreements over financial policy in the world's second-largest economy would be the real reason for his ouster, the report said. Zhou is pressing for market reforms including a liberalization of interest rates but the party leadership fears the impact on an economy whose growth has slowed recently.
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US President Obama also vowed Wednesday to continue pursuing a two-state solution to the Middle East conflict, even as he directly called on Israelis to continue striving for peace. "The violence engulfing the region today has made too many Israelis ready to abandon the hard work of peace," he said in his address to the United Nations General Assembly. Veering from the text of his prepared speech, Obama added: "That's something worthy of reflection within Israel." Returning to his text, he continued: "Let's be clear: The status quo in the West Bank and Gaza is not sustainable."
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Afternoon Watchlist (all times British Summer Time)
13:30 US Durable Goods Orders
13:30 US Jobless Claims
13:40 UK BOE's Governor Carney speech
14:45 US Markit Services PMI Preliminary
14:45 US Markit PMI Composite Preliminary
15:30 US EIA Natural Gas Storage change
16:00 US Kansas Fed manufacturing activity
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Friday's Key UK Corporate Events
Digital Globe Services - Full Year Results
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Friday's Key Economic Events (all times British Summer Time)
00:30 Japan National Consumer Price Index
00:30 Japan Tokyo Consumer Price Index
03:00 China CB Leading Economic Index
07:00 Germany Gfk Consumer Confidence Survey
07:00 Germany Import Price Index
07:45 France Consumer Confidence
13:30 US Gross Domestic Product
13:30 US Personal Consumption Expenditures Prices
13:30 US Core Personal Consumption Expenditures
14:55 US Reuters/Michigan Consumer Sentiment Index
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