Last checked at 
LONDON (Alliance News) - ITV reported higher profits and revenues for 2013 and gave a bullish outlook for 2014, but has seen its shares punished Wednesday after it failed to increase its special dividend.
The television company raised its total dividend for 2013 to 3.5 pence, from 2.6 pence in 2012, and it said it would pay another special dividend of 4.0 pence, the same level as 2012, as it continued to return a chunk of its cash pile to its shareholders.
However, that wasn't enough for investors who had been hoping for an even bigger payout, and it was one of the biggest decliners on the FTSE 100. Analysts at Liberum, who had expected a higher cash return, said ITV's full-year normal dividend also came in below forecasts, which it said "may raise questions as to whether ITV is planning more spending on acquisitions."
Chief Executive Adam Crozier said ITV has "always tried to balance the requirement to invest and progressive returns to shareholders."
ITV reported a 30% increase in pretax profit in 2013, driven by higher revenues, particularly in its growing studio production business, and as cost cutting lifted its margin. The company made four sudio acquisitions in the UK and US during the year.
ITV also epressed confidence for 2014, saying it expects to see further growth across all parts of its businesses, and citing signs of improvement in the television advertising market.
Liberum later turned bullish on ITV after meeting management, saying ITV made it clear that it is pushing for the right to charge Pay-TV platform operators for ITV1.
The biggest riser on the blue-chip index is Weir Group, which increased its total dividend 11% after predicting that it will return to growth in 2014. Its profits and revenues declined in 2013 as it worked on the lower level of orders it had at the start of the year, particularly in its oil and gas division.
It was the one of the heaviest days of the earnings season so far. Builders merchants Travis Perkins reported an increase in profit for the full-year, and said it thinks the recovery in the building market is still in its early days, signalling further growth, while FTSE 250-listed housebuilder Taylor Wimpey joined Persimmon and Bovis in reporting a jump in profits due to the recovery in the UK house market. Like Persimmon Tuesday, Taylor Wimpey saw its shares fall in the wake of the positive results.
Tesco, meanwhile, saw its shares decline after leaving investors unimpressed after an investor day Tuesday. The UK's biggest retailer announced a new GBP200 million price-cutting programme, but was immediately trumped by big rival Asda which said it would add another GBP100 million to its existing GBP200 million programme. Sainsbury and Wm Morrison are also lower as another supermarket price war looms.
The re-ignited London IPO market flared Wednesday as four companies either announced an intention to float or details of upcoming listings.
Online domestic appliances retailer AO World saw its share rise in conditional dealing as it set the price of next week's IPO at 285 pence, giving it a market capitalistaion of GBP1.2 billion, well above earlier estimates.
At that level, it has a price to earnings ratio - a key metric used by analysts to measure company value - above the ratios of ASOS and Ocado. It would also potentially go straight into the FTSE 250 at the next index review.
Valuations for some of the retailers coming to the market this year have been soaring as the IPO market has recovered strongly over the past year, leading some analysts to suggest that some companies may be being over-valued.
Also joining the IPO fray, German commercial real estate company Summit Germany Ltd rose in early trade after listing on AIM, while allergy treatments company Circassia Pharmaceuticals PLC said it would seek to raise GBP200 million in its upcoming listing as it set an indicative price range.
Meanwhile, rare and antiquarian book dealer Scholium Group said it intends to IPO on AIM in the near future. The company trades through its Shapero Rare Books dealership in Mayfair and a bookshop in South Kensington specialising in illustrated books.
Shares in Imperial Tobacco and British American Tobacco have shrugged off news that the European Parliament has approved new rules aimed at curbing smoking, including larger graphic warnings on tobacco products, a phase-out of menthol cigarettes, and new regulations on e-cigarettes.
The new legislation will require tobacco companies to cover 65% of the front and back of their packages with health warnings, including graphic photos, for instance, of diseases caused by smoking. Countries wishing to introduce plain packaging could do so.
In its second reading of 2013 UK gross domestic product, the Office for National Statistics said growth was 1.8% for the year as a whole, down from its initial estimate of 1.9%. The annual increase for the fourth quarter was 2.7%, down from the initial estimate of 2.8%, although the quarter-on-quarter increase was unrevised at 0.7%.
The latest readings came as Bank of England policy makers were out in force reiterating to taxpayers that the central bank is in no hurry to raise interest rates. "Interest rates will have to rise at some point, but not yet," said Chief Economist Spencer Dale, adding that when the time comes to hike them, the central bank will do so "very gradually and cautiously" to nurture the recovery in output growth and employment.
Monetary Policy Committee member David Miles reiterated that the bank wants to see more demand taken up in the economy before it considers rate increases. A return to pre-crisis interest rate levels of 5% is unlikely to take place for a "very long time," he added.
The Bank of England also unveiled the proposed set of rules to supervise branches of foreign investment banks operating in the UK. According to a Consultation Paper, the bank's Prudential Regulation Authority will review whether the supervision of a firm in its home country is equivalent to that it would get under the UK regulator and whether the bank can be wound down in a way that reduces the impact on financial stability in the UK. The new supervisory approach is expected to require some branches to either exit the market or become a subsidiary.
In political news, Ukraine's new leaders have promised to fight separatism, as Russia and the EU called on them to ensure the country's integrity. Interim President Oleksandr Turchynov said that the power vacuum that resulted after President Viktor Yanukovych's ouster at the weekend has resulted in calls for separatism.
The feared riot police force in Ukraine blamed for the deaths of protesters in Kiev has been disbanded, newly installed Interior Minister Arsen Avakov said. "Berkut no longer exists," Avakov posted on Facebook, using the two-decade-old unit's Ukrainian name, which means eagle. The Ukrainian parliament has been moving swiftly to remove or reform institutions linked to Yanukovych, whose whereabouts are still unknown.
Meanwhile, Russian President Vladimir Putin is rattling the sabres, ordering an immediate wide-ranging inspection of the combat readiness of the country's armed forces.
Italy's new government has been confirmed by the parliament after two days of debate that saw Prime Minister Matteo Renzi pledge big reforms and attack the anti-establishment Five Star Movement. In a widely-anticipated result, Renzi's executive earned a comfortable majority in the lower house of parliament, the Chamber of Deputies, winning a vote of confidence with 378 votes in favour, 78 votes over the majority threshold. The upper chamber, the Senate, had given its support to the new executive earlier in the week.
Meanwhile, Controversial virtual currency Bitcoin has made headlines again after one of the largest exchanges of the currency ceased operations amid reports of a massive theft, leaving investors and enthusiasts in turmoil. Mt Gox, a Tokyo-based website that acted as a "Bitcoin bank" was unreachable following a leaked memo. The memo detailed how the site may have lost some 744,000 Bitcoins to theft over several years and was on the verge of bankruptcy.
--------
FTSE 100: Down 0.7% at 6,819.15
FTSE 250: Down 0.4% at 16,475.80
AIM ALL-SHARE: Down 0.1% at 891.51
GBP-USD: 1.6710
EUR-USD: 1.3755
GOLD: USD1,335.20 an ounce
OIL (Brent): USD110.26 a barrel
--------
KEY UK CORPORATE NEWS:
FTSE 100: Petrofac reported modest net profit and revenue growth for 2013, but said it was set to flatline this year before returning to growth in 2015. Fresnillo said that the Mexican Ministry of Defense has granted a new explosives permit for the Herradura mining unit at Minera Penmont, meaning it can now resume operations there. HSBC Holdings has agreed to sell SB JSC HSBC Bank Kazakhstan to JSC Halyk Bank for USD176 million in cash, as it continues its policy of streamlining its operations and disposing of businesses it considers non-core. Anglo American plans to cut jobs at the Drayton thermal coal mine in Australia later this year following problems with getting planning approvals, the company has told employees at the site. Betting company William Hill has appointed former Centrica Chief Executive Roy Gardner as a non-executive director.
FTSE 250: International Personal Finance reported a 45% increase in 2013 pretax profit, driven by the home credit lender's expansion into new markets and an increase in the credit it issued. Gerard Ryan, Chief Executive, admitted that he foresees, "heightened regulatory challenges" but said he is confident of further growth in 2014 and beyond. Hays reported 10% growth in pretax profit, driven by net fee growth and improving market conditions in the UK and Asia, and said business confidence in the UK and Ireland is improving "across all sectors" in both its permanent and temporary businesses. CSR signaled its confidence for 2014 as it announced plans to return up to USD50 million via a share buyback and hiked its final dividend, although it swung into a pretax loss in 2013 as it wrote off its Cameras unit. Property developer Segro said it swung to a full-year profit, after its 2012 results were dented by a revaluation loss. Kentz Corporation's UGL Kentz joint venture has been awarded a USD640 million contract to provide structural, mechanical and piping construction on the Ichthys liquid natural gas project in Darwin, Australia. Henderson Group made record profits in 2013 on significant increases in both the retail and institutional assets it manages, after a turnaround in the company's retail business. HellermannTyton Group has signed a new EUR230 million revolving credit facility at lower rates than the facility it replaces, bringing down interest costs by EUR8 million a year. The Restaurant Group reported higher profits and revenues for its last financial year, driven by new pub and restaurant openings and higher sales from existing outlets, and said it will open a further 36 to 43 new restaurants in 2014. Direct Line Insurance Group reported a rise in 2013 pretax profit, as it suffered fewer claims from major weather events over the course of the year, despite a surge in claims in the fourth quarter. The insurer also declared a special dividend. Bus and rail operator Stagecoach Group said its adjusted earnings per share expectations for the current financial year remain unchanged, as its overall profitability has remained satisfactory in recent months despite the severe weather that has hit its UK and US markets. St Modwen Properties plans to raise GBP100 million through the offering of guaranteed convertible bonds due 2019, which it will use to refinance existing bank debt.
AIM: Shares in Conroy Gold & Natural Resources is a big gainer after a structural study at its Clay Lake gold target in Ireland confirmed the presence of gold bearing anticline structures. Savannah Resources is also up after it appointed Paul O'Donoghue as country manager in Mozambique, and also brought in Durair A'Shaikh, a geologist with over 18 years experience. At the other end of the market, Evocutis slumped after it finally sold all the intellectual property rights for its Labskin product and SYN1113 investigational acne product, as well as related equipment, after months of talks. Clinical research organisation Venn Life Sciences separately said it had bought the assets for GBP210,000 in shares plus future royalties on sales of the acquired products. Synectics is also down after it reported higher profits for 2013 but said that its year-end order book had declined significantly. LED International Holdings is the biggest decliner after it warned that its hasn't yet received the funds from its subscription offer, and while it is in talks with the subscribers it is also evaluating other potential avenues of funding. That leaves its future in doubt.
--------
AFTERNOON WATCHLIST: US EIA Crude Oil Stocks change, Japan Foreign bond investment, Japan Foreign investment in Japan stocks
--------
Thursday's Key UK Corporate Events
Royal Bank of Scotland Group Full Year Results
Man Group Full Year Results
Reed Elsevier Full Year Results
Capita Full Year Results
RSA Insurance Group Full Year Results
Kazakhmys Full Year Results
Barratt Developments Interim Results
Howden Joinery Group Full Year Results
Jupiter Fund Management Full Year Results
Kier Group Interim Results
National Express Group Full Year Results
Premier Oil Full Year Results
Redrow Interim Results
Bodycote Full Year Results
Chemring Group Interim Management Statement
Spectris Full Year Results
Spirent Communications Full Year Results
Whitbread Trading Statement
Domino's Pizza Full Year Results
Promethean World Full Year Results
British American Tobacco Full Year Results
Colt Group Full Year Results
Derwent London Full Year Results
F&C U.S. Smaller Companies Interim Results
Lavendon Group Full Year Results
Ricardo Interim Results
RPS Group Full Year Results
Xchanging Full Year Results
WPP Full Year Results
Macfarlane Group Full Year Results
H&T Group Full Year Results
Hardy Oil & Gas Full Year Results
Standard Life Full Year Results
Countrywide Full Year Results
Merlin Entertainments Full Year Results
Sphere Medical Holding Full Year Results
-------
Thursday's Key Economic Events
00:00 Russia Central Bank Reserves
00:30 US FOMC Member Pianalto Speech
07:00 Germany Import Price Index
07:45 France Consumer Confidence
08:55 Germany Unemployment Rate
09:00 EU M3 Money Supply
09:00 EU Private loans
10:00 EU Consumer Confidence
10:00 EU Business Climate
10:00 EU Economic Sentiment Indicator
10:00 EU Industrial Confidence
10:00 EU Services Sentiment
13:00 Germany Consumer Price Index
13:30 US Durable Goods Orders
13:30 US Initial Jobless Claims
15:00 US Fed's Yellen Speech
15:30 US EIA Natural Gas Storage change
16:00 US Kansas Fed manufacturing activity
23:13 Japan Nomura/ JMMA Manufacturing Purchasing Manager Index
23:30 Japan National Consumer Price Index
23:30 Japan Overall Household Spending
23:30 Japan Unemployment Rate
23:50 Japan Industrial Production
23:50 Japan Large Retailer's Sales
23:50 Japan Retail Trade
-------
By Alice Attwood; aliceattwood@alliancenews.com; @AliceAtAlliance
Copyright © 2014 Alliance News Limited. All Rights Reserved.
