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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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Dixons Carphone said its like-for-like sales grew in the first quarter, driven by a strong performance in the UK and Ireland which offset mixed conditions in Southern Europe. The electricals retailer, created by the merger of Dixons Retail and Carphone Warehouse last year, said its group like-for-like revenue growth in the 13 weeks to August 1 was 8%, driven by 10% growth in the UK and Ireland. Like-for-like revenue from its Nordics operations was up by 4% in the quarter, but Southern Europe revenue was flat, as an improvement in Spain and growth in Greece was offset by challenging markets elsewhere.
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Wm Morrison Supermarkets reported a sharp drop in profit in the first half of its financial year, as its revenue and like-for-like sales continued to decline in a deflationary UK food market and as it competes on price with other supermarkets in the face of discounters Aldi and Lidl. The grocer reported a drop in pretax profit in the half year ended August 2 to GBP126 million from GBP239 million in the first half of the prior year, as total revenue fell 5.1% to GBP8.1 billion from GBP8.5 billion, and like-for-like sales excluding fuel declined 2.7%. Morrisons will pay an interim dividend of 1.50 pence, down from the 4.03p it paid the year before. It confirmed that its full-year dividend will be no less than 5.00p. The company said it will close 11 further stores which are loss-making.
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Next said its pretax profit and revenue both rose in the first half of its financial year, driven by higher-than-expected full-price brand sales growth and a robust performance in its directory business, while retail sales rose only marginally. The fashion retailer said its pretax profit for the 26 weeks to July 25 was GBP347.1 million, up from GBP324.2 million, as its total sales revenue for the period rose to GBP1.89 billion from GBP1.85 billion a year earlier. Next said it will hike its interim dividend to 53.0 pence per share, up 6.0% year-on-year and in line with its expectations for the full year.
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Royal Dutch Shell Chief Executive Ben van Beurden has private told investors that only "something cataclysmic" could derail the company's takeover of rival BG Group, The Wall Street Journal reported. Van Beurden, speaking at a lunch hosted by Shell last week for a small group of investors, was asked at the event what he meant by "cataclysmic", to which van Beurden replied: "If people stopped using energy."
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The Royal Bank of Scotland Group said it has agreed to sell a portfolio of corporate loan commitments related to its banking business in China to China Construction Bank Corp, as the bank looks to focus its corporate and institutional banking business on UK and Western European customers. RBS expects to receive about GBP498.0 million for the portfolio, an amount which would generate a GBP4 million profit on completion of the disposal.
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Dunelm Group said its pretax profit rose in its last financial year on the back of stronger sales, and it left the door open for further special dividends in the current year as it increased its final payout. The FTSE 250-listed homewares retailer said its pretax profit for the 53 weeks to July 4 was up to GBP122.6 million, while its pretax profit for the 52 weeks to June 7 was GBP121.4 million. This compares to a pretax profit of GBP116.0 million for the 52 weeks to June 8, 2014.
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Home Retail Group said its total sales for Argos and Homebase both declined in the second quarter and said the outcome for the full year is less predictable than in the past. The company, which owns catalogue retailer Argos and home improvement retailer and garden centre Homebase, said total sales for Argos in the second quarter were down 0.4% year-on-year to GBP897.0 million, while like-for-like sales in the business fell 2.8%. Total sales at Homebase were down 2.8% to GBP378.0 million as a result of its ongoing store closure programme. Like-for-like sales were higher, however, up 5.9% with broad-based growth across product categories, but particularly in big ticket items.
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MARKETS
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UK stock indices were lower after weak economic data from China. In the FTSE-100 housebuilders were trading higher after UK house prices logged their biggest monthly increase in 15 months, according to data from Lloyds Banking Group's Halifax division.
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FTSE 100: down 0.5% at 6,200.21
FTSE 250: down 0.4% at 17,081.48
AIM ALL-SHARE: down 0.3% at 734.12
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The pound is higher against the dollar ahead of the latest Bank of England interest rate announcement and policy-maker vote, scheduled for 1200 BST.
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GBP: up at USD1.5372
EUR: down at USD1.1187

GOLD: flat at USD1107.43 per ounce
OIL (Brent): up at USD47.83 a barrel

(changes since end of previous GMT day)
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ECONOMICS AND GENERAL
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Britain's economic growth softened slightly in three months to August, according to a report released by the National Institute of Economic and Social Research. The think tank said that the monthly estimates of gross domestic product suggested a 0.5% rise in output during three months ended August. This was slower than the 0.6% expansion seen in three months to July. "Despite the slight softening, growth remains close to the estimated long run potential of the economy, but below the average rate of growth (0.7% per quarter) observed since the start of 2013," the think tank said. The NIESR earlier projected the UK economy to grow 2.5% in 2015 and 2.4% next year.
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UK house prices logged their biggest monthly increase in 15 months, data from Lloyds Banking Group's Halifax division revealed. House prices advanced 2.7% in August from July, which was the fastest increase since May 2014. Economists had forecast prices to climb 0.5% after falling 0.4% in July. In three months to August, house prices growth came in at 3%, compared to 2.5% seen in three months to July. Year-on-year, house prices advanced 9%, faster than the expected growth of 7.9%.
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Separately, the Royal Institution of Chartered Surveyors said its UK house price balance surged to 53% in August. That topped forecasts for an increase of 46% and was up sharply from 44% in July. "There is good reason for this trend to be sustained into next year, however uncomfortable that may be for those looking to enter the market, given that so many of our members are telling us that they are struggling to replace the stock they have sold," said Simon Rubinsohn, chief economist at RICS.
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Consumer inflation in China reached its highest point for a year, driven by the cost of pork and other food, while producer prices dropped sharply, officials said. The divergence complicates matters for China's wavering economy, experts said. The consumer price index was up 2% year-on-year in August, while the producer price index was down 5.9%, the biggest drop in more than five years, the National Bureau of Statistics (NBS) said.
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Chinese premier Li Keqiang promised to relax restrictions on foreign capital in financial markets and said the country would meet its economic targets. "We are speeding up structural reform," Li told delegates to the World Economic Forum's event in Dalian, known as the Summer Davos. China faces a "painful and treacherous" transition from overreliance on manufacturing toward a "growth model driven by consumption and investment," Li said. "It's true that the economy has come under downward pressure...but the Chinese economy will not have a hard landing," he said in a speech on policy direction.
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The Reserve Bank of New Zealand lowered its Official Cash Rate by 25 basis points, to 2.75% from 3.00%. That was in line with expectations and marked the third straight meeting with a rate cut. That followed seven consecutive months with no change.
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Standard & Poor's Ratings Services downgraded the sovereign ratings of Brazil to junk status citing political challenges and increased execution risks to its corrective policy changes. The long-term foreign and local currency sovereign ratings on Brazil was lowered to 'BB+' and 'BBB-', with negative outlook.
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By Arvind Bhunjun; arvindbhunjun@alliancenews.com; @ArvindBhunjun

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