LONDON (Alliance News) - The following is a summary of top news stories Monday.
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COMPANIES
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CRH said it has agreed a deal with Lafarge and Holcim under which the Irish building materials company will buy a range of assets being sold by its French and Swiss rivals as part of the conditions for their merger to be given regulatory approval. Under the deal, CRH will pay EUR6.5 billion to buy assets from the companies primarily in Europe, Canada, Brazil and the Philippines. It will use EUR2.0 billion of cash from its balance sheet, new bank debt, and the proceeds of a share placing to fund the deal, which it expects to result in EUR90 million of synergies by year three after completion. It also expects the deal to boost earnings per share by about 25% in the first full year of ownership of the assets.
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Standard Life confirmed it intends to return about GBP1.75 billion, or 73 pence a share, to its shareholders after it completed its sale of its Canadian units to a subsidiary of Manulife Financial Corp for CAD4.0 billion, or about GBP2.2 billion in cash. The shareholder return will be done by way of a B/C share scheme accompanied by a share consolidation, a move expected to take place before April 6. Its final dividend will be paid on the resulting number of ordinary shares after the consolidation.
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Ryanair Holdings announced a EUR400 million share buyback, as it raised its full-year guidance for a fourth time on the back of falling fuel prices and said it swung to a profit in the third quarter of the financial year compared with a loss a year earlier. Europe's low-cost carrier said it had already noticed some softening in prices on forward bookings during the first few weeks of January, but it is now expecting a 5% decline in unit costs for the financial year as a whole. It is therefore raising its net profit guidance for the year to end-March to between EUR840 million and EUR850 million, from its previous guidance of between EUR810 million and EUR830 million.
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Randgold Resources said it is looking at developing a third underground mine at its Loulo-Gounkoto gold mining complex in Mali, a move that would bolster rising production from the site. Randgold Chief Executive Mark Bristow, who is leading a group of international investors on Randgold's annual tour of its West and Central African operations, said a feasibility study on an underground mine at Gounkoto had been completed and its findings would be made known when the company publishes its 2014 results later this month. As things stand, Loulo-Gounkoto has reserves in excess of 8 million ounces of gold.
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Tesco is understood to be closing in on the appointment of John Allan as its new chairman, The Daily Telegraph reported. Allan, currently the deputy chairman of Dixons Carphone, is believed to be the only candidate still in the frame after Ian Cheshire, the former chief executive of Kingfisher, withdrew from the race.
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RPS Group said it expects its 2014 results to be at the top end of market expectations. The company said its energy business has grown profits significantly since June 2014, in spite of the drop in the oil price over the period.
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Grainger said it has exchanged contracts to buy a regional tenanted residential property portfolio for about GBP58 million from Sarunas Properties Ltd, a deal that will take its total investment into residential assets in the UK regions to about GBP76 million over recent months. The residential property owner and manager said the portfolio comprises 614 residential properties, which are predominantly tenanted and subject to Assured Shorthold Tenancies, located in Cambridgeshire, Greater Manchester, Lancashire, Cheshire, Derbyshire, Merseyside and Nottinghamshire, as well as a small proportion of properties in Scotland.
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Balfour Beatty said its joint venture with Skanska and MWH Treatment has signed a GBP800 million five-year contract with Thames Water, to help build and maintain the water company's pipe, pumping stations and water treatment plant network. In a statement, Balfour said the initial deal is worth about GBP265 million to it, as it is a one-third partner in the joint venture.
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MARKETS
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UK shares trade slightly lower, after disappointing German, French and Chinese manufacturing purchasing managers' index readings outweighed a better-than-expected UK manufacturing performance.
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FTSE 100: down 0.1% at 6,740.22
FTSE 250: down 0.2% at 16,285.54
AIM ALL-SHARE: down 0.0% at 690.03
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The pound rose against the dollar immediately after the PMI release, reaching USD1.5089, but fell sharply shortly thereafter.
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GBP-USD: down at USD1.5023
EUR-USD: up at USD1.1346
GOLD: down at USD1274.28 per ounce
OIL (Brent): up at USD52.91 a barrel
(changes since end of previous GMT day)
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ECONOMICS AND GENERAL
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The UK manufacturing sector growth remained strong in January, data from Markit Economics showed. The Markit/Chartered Institute of Procurement & Supply Purchasing Managers' Index rose to 53 in January from a revised score of 52.7 in December. The score also exceeded the expected level of 52.8. The index has remained above the neutral 50 mark in each month since April 2013. Manufacturing output expanded for the twenty-third consecutive month underpinned by a further increase in incoming new orders.
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Eurozone's manufacturing activity grew at a faster rate in January, confirming the flash estimate, final figures from Markit Economics showed. The final Eurozone Manufacturing Purchasing Managers' Index, or PMI, rose to 51 in January from 50.6 in December. This was unrevised from the flash estimate. Production increased at the fastest rate in six months. New orders rose marginally in January. Employment levels rose for the fifth successive month and the rate of job creation was unchanged from the eight-month high in December.
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Ireland's manufacturing sector continued to expand at a solid pace in January, though at the slowest rate since May. The seasonally adjusted Investec purchasing managers' index, or PMI, fell to 55.1 in January from 56.9 in December. This marked the slowest pace of expansion in eight months and the twentieth consecutive month of increase.
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The Chinese manufacturing sector contracted slightly more than the initially estimated in January, although the contraction slowed from the previous month, the results of the latest survey from HSBC revealed. Revised estimates based on the final survey showed that the manufacturing purchasing managers' index, or PMI, came in at 49.7 in January, slightly less than the flash estimate of 49.8. However, the score was marginally more than the 49.6 reading in December. This marked the second consecutive month of contraction. A reading above 50 signals expansion in activity while that below 50 indicates contraction.
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Japan's manufacturing sector continued to expand at a steady pace in January, the latest survey from Markit Economics showed. The manufacturing purchasing managers' index edged up to 52.2 in January from 50 in February. It marked the eight consecutive month of expansion.
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Greece's finance minister kicked off a European roadshow in Paris on Sunday as the country's newly elected prime minister showed willingness to negotiate on Greek debt repayment ahead of talks with EU Commission President Jean-Claude Juncker. A telephone conversation between Greek Prime Minister Alexis Tsipras and Juncker went smoothly on Saturday, sources close to the commission president said. The two agreed to hold face-to-face talks on Wednesday, when Tsipras will also meet French President Francois Hollande in Paris.
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Constitutional Court Judge Sergio Mattarella was elected as Italy's new head of state, sealing a presidential election that was expertly steered by Prime Minister Matteo Renzi to the detriment of opposition leader Silvio Berlusconi. The incoming president, 73, is a former Christian Democrat minister from Sicily, active in politics from 1983 to 2008, who was promoted to the top court in 2011. He has a reputation for moral integrity and solid anti-Mafia credentials but little international recognition.
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The top leader of the pro-Russian separatists in eastern Ukraine announced an all-out mobilisation and claimed that 100,000 fighters would be recruited. Alexander Zakharchenko's call came after another effort to set up peace talks to resolve the conflict foundered over the weekend. "In 10 days, we will begin a general mobilization," Zakharchenko said, according to the semi-official Donetsk News Agency. "We plan to mobilize up to 100,000 people."
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Iraqi Kurdish troops retook a major oilfield from the Islamic State on Saturday, almost a day after the militant group seized it, an Iraqi security official said. The troops, backed by allied warplanes, launched an attack and drove the jihadists out of the Khbaz oil complex west of the oil-rich city of Kirkuk, Brigadier Sarhad Qader, a senior police officer in Kirkuk, told dpa. He said that around 40 militants were killed in the operation and two armoured vehicles belonging to Islamic State were seized. On Friday, Islamic State fighters overran the complex and held 24 of its employees hostage.
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Japan will stand firm in its support for international anti-terrorism operations, Prime Minister Shinzo Abe said, after the Islamic State posted a video at the weekend showing the beheading of a second Japanese hostage. "Japan will never yield to terrorists. We will ensure the safety of Japanese nationals with a unified effort," Abe told a meeting of lawmakers from the ruling Liberal Democratic Party and coalition allies the New Komeito Party.
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