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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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Royal Dutch Shell reported a dramatic fall in earnings during 2015, but the results did meet expectations. The oil and gas major said current cost of supply (CSS) earnings excluding items more than halved year-on-year in 2015 to USD10.67 billion from USD22.56 billion, which is at the top end of Shell's guidance provided last month. CSS earnings including items fell 80% during the year to USD3.84 billion from USD19.04 billion a year earlier, whilst income attributable to shareholders fell at an even steeper rate to USD1.93 billion from USD14.87 billion, representing an 87% fall. That USD1.93 billion result also was at the top end of Shell's guidance range of USD1.60 billion to USD2.00 billion. Shell, as expected, maintained its dividend for the year of USD1.88 per share and has also said its dividend next year will remain flat.
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AstraZeneca forecast a fall in revenue and its closely watched earnings per share for 2016, including dilutive effects from recent acquisitions, as it reported a rise in pretax profit for 2015. The pharmaceutical company said pretax profit rose to USD3.07 billion in 2015 from USD1.25 billion a year before, despite seeing revenue fall to USD24.71 billion from USD26.55 billion, with the improved profit mostly the result of lower cost of sales and of selling, general and administrative costs. AstraZeneca reported core earnings per share for the year of USD4.26, flat on the previous year at actual exchange rates, although up 7% at constant currency. AstraZeneca declared a second interim dividend of USD1.90 per share, taking its total dividend for the year to USD2.80, maintained from the previous year.
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Vodafone Group confirmed its full-year guidance, as the mobile operator saw its group organic service revenue rise 1.4% in its financial third quarter and it cited continued recovery in Europe. For the quarter to end-December, Vodafone reported a 5.5% decline in total revenue, hit by foreign exchange rate movements. However, on an organic basis, at constant currency and adjusting for merger and acquisition activity, service revenue was up 1.4%. Vodafone highlighted continued recovery in services revenue in Europe, saying its organic service revenue fell only 0.6% in the quarter, compared to a 1.0% fall in the second quarter.
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Medical devices maker Smith & Nephew reported a fall in pretax profit for 2015 on higher costs, but saw earnings per share come in ahead of both 2014 and market expectations. Smith & Nephew reported a pretax profit of USD559 million for 2015, down from USD714 million a year before, as a rise in revenue to USD4.63 billion from USD4.62 billion was offset by higher selling, general and administrative costs. The company said it has taken an accounting charge of USD203 million in relation to settlements for legal claims related to metal-on-metal hip replacements. Smith & Nephew proposed a final dividend of 19.0 cents per share, which takes its full-year dividend to 30.8 cents, up 4% from the 29.6 cents it paid in 2014.
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easyJet reported growth in passengers carried in January but a small decline in load factor, while rival budget carrier Ryanair Holdings posted an increase in both customer traffic and load factor. easyJet said the number of passengers carried rose 6.3% to 4.3 million in January from 4.0 million in the same month the year before, but load factor decreased very slightly by 0.1 of a percentage point to 85.0% from 85.1%. Ryanair said customer traffic grew by a quarter in January to 7.5 million from 6.0 million, as load factor increased by 5 percentage points to 88.0% from 83.0%.
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Compass Group said its outlook for 2016 remains positive after reporting a rise in revenue during the first quarter of the financial year. The catering and support services business said organic revenue grew 5.9% year-on-year in its financial first quarter ended December 31, with like-for-like revenue also increasing thanks to modest pricing and some volume improvement.
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Legal & General Group said Chief Financial Officer Mark Gregory will retire from the group on January 31, 2017. Gregory will remain in the role until a successor is appointed and will ensure a smooth handover, the insurer company said.
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Stagecoach Group and FirstGroup were shortlisted by the UK Department of Transport to compete for the next South Western rail franchise. Both FTSE 250-listed companies said they would be bidding for the new franchise, due to start in 2017 when the current contract with Stagecoach comes to an end. Stagecoach currently operates the network under the South West Trains brand. The franchise, which FirstGroup is bidding for under the name First South Western Trains, covers routes and stations between London Waterloo, Reading, Bristol, Exeter, Weymouth and Portsmouth. The Department for Transport said it has started consulting passengers, businesses and local councils on the specification for the new franchise. The consultation runs until February 9.
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AA said its full year results are expected to meet market expectations as the company continues to strengthen its position as the UK's pre-eminent motoring organisation. The company said its marketing activities have continued to successfully slow the decline in personal member numbers, which is being exacerbated by the adverse price impact of the recent increase in insurance premium tax.
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Beazley said it had performed "very strongly" in 2015, seeing pretax profit rise and proposing both a higher regular dividend and a special dividend. The specialist risk insurance and reinsurance business reported a pretax profit of USD284.0 million for 2015, up from USD261.9 million a year before, as revenue rose to USD2.08 billion from USD2.02 billion. Beazley proposed a second interim dividend of 6.6 pence, taking its total dividends for the year to 9.9p, up from 9.3p a year before. It also proposed a special dividend of 18.4p, up from the 11.8p special dividend it paid in 2014.
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MARKETS
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UK indices were in the green, led by miners. After a flurry of UK company news in the morning, investors in London are looking ahead to the Bank of England's interest rate decision at noon. Oil prices bounced back to around USD35 a barrel. Wall Street was pointed to a higher open.
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FTSE 100: up 1.3% at 5,908.59
FTSE 250: up 0.6% at 16,093.58
AIM ALL-SHARE: up 0.5% at 693.28

GBP: up at USD1.4660 (USD1.4580)
EUR: up at USD1.1180 (USD1.1052)

GOLD: up at USD1,146.69 per ounce (USD1,138.90)
OIL (Brent): up at USD35.29 a barrel (USD34.34)

(changes since previous London equities close)
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ECONOMICS AND GENERAL
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UK house price growth increased unexpectedly in January, data published by Lloyds Banking Group's Halifax division showed. House prices advanced 9.7% year-on-year in three months to January, following a 9.5% increase in the preceding three months. Prices were expected to rise 9%. On a sequential basis, house prices gained 2.2% in three months ended January after rising 1.6% in prior period.
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Britain has pledged another GBP1.2 billion in aid to Syria and the region, the UK government said Thursday ahead of an international donors' conference in London. The promise came as representatives from 70 countries and organizations were scheduled to meet to discuss ways to ease a humanitarian and migration crisis caused by four-and-a-half years of conflict and civil war in Syria. The latest pledge will take Britain's total for the region to more than GBP2.3 billion.
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WikiLeaks founder Julian Assange said he would hand himself in to British police on Friday in the event of an unfavourable decision from a UN investigation. "I will accept arrest by British police on Friday if UN rules against me," the 44-year-old Australian said on Twitter. A UN working group is set to publish a determination on whether Assange, who has been holed up in the Ecuadorian embassy in London since 2012 to avoid extradition to Sweden, is in effect illegally detained there.
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Thousands of protesters caused traffic chaos in the streets of Auckland as trade ministers from 12 Pacific Rim countries, including the US and Japan, met to sign the Trans-Pacific Partnership free trade deal. The trade pact will see the elimination and reduction of about 18,000 tariffs on the trade of industrial and agricultural goods between Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, the US and Vietnam. Opponents claim the agreement undermines domestic sovereignty.
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The field of Republicans seeking to become the next US president got a little less crowded, while the candidates jockeying for top position slung mud over allegations against Ted Cruz's campaign. Kentucky Senator Rand Paul announced he is dropping out of the Republican presidential race and former Pennsylvania Senator Rick Santorum was expected to do the same later Wednesday. The campaign has been dominated by the antics of billionaire businessman Donald Trump, who came in second to Texas Senator Ted Cruz in Iowa, and on Wednesday accused his rival of campaign fraud.
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By Arvind Bhunjun; arvindbhunjun@alliancenews.com; @ArvindBhunjun

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