LONDON (Alliance News) - Food retailers are the best-performing stocks in the FTSE 100 Thursday, after Wm Morrison Supermarkets said it was making progress in its three-year turnaround plan, cutting prices for the long-term and focusing less on promotions.
The supermarket, which is trying to fight back after being worst hit by the gains made by discounters Lidl and Aldi, also narrowed its full-year profit guidance range as third quarter sales continued to slide, albeit at a slower pace.
The UK grocer said it was continuing to invest in price cuts, as total store sales excluding fuel and sales tax fell 3.6% from a year earlier. In stores open longer than a year, third-quarter sales fell 6.3% following a 7.6% drop in the second quarter and 7.1% in the first. Analysts had forecast a drop of around 6%.
J Sainsbury, Morrisons, and Tesco were amongst the best-performing stocks on the FTSE 100.
AstraZeneca, meanwhile, saw its shares fall despite it raising its 2014 guidance for the second time this year, as it saw revenue rise in the nine months to end-September at constant currency.
It cautioned that it expects the strengthening dollar to hit core earnings per share by around 5%.
The pharmaceutical company said its growth drivers offset the hit from generic competition, and its acquisition of Bristol-Myers Squibb Co's share in their diabetes joint venture helped bolster revenue, although this also led to exceptional costs which hit its pretax profit.
The company also announced Thursday that it has agreed to sell its Myalept orphan product for the treatment of leptin deficiency in patients with generalised lipodystrophy to Aegerion Pharmaceuticals Inc for USD325 million upfront.
The Bank of England has just left the interest rate unchanged at a record low of 0.5% yet again.
The minutes of the meeting is due on November 19. While Martin Weale and Ian McCafferty highly likely continued to favor an interest rate hike at the November meeting, they currently look to be increasingly isolated, IHS Global Insight's Chief UK Economist Howard Archer said.
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Markets: UK shares are lacking support, as investors avoid risk ahead of the European Central Bank monetary policy decision shortly and as corporate earnings take the spotlight in the meantime.
Futures indicate a slightly lower open on Wall Street. The DJIA and S&P 500 are set to open down 0.1% and the Nasdaq Composite down 0.2%.
FTSE 100: flat at 6,538.15
FTSE 250: down 0.2% at 15,496.46
AIM ALL-SHARE: flat at 715.96
GBP-USD: down at USD1.5950
EUR-USD: up at USD1.2514
GOLD: up at USD1,144.79 an ounce
OIL (Brent): down at USD82.72 a barrel
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Other Top UK Corporate News
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RSA Insurance Group reported a fall in premiums as a result of weak insurance market conditions and the group's restructuring plan being led by Chief Executive Stephen Hester. In a statement, RSA said net written premiums fell to GBP5.68 billion in the first nine months of the year, compared with GBP6.74 billion in the corresponding period last year.
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Coca-Cola HBC reported a drop in third-quarter revenue as poor weather in its markets hit volumes, and it warned that it expects tough market conditions for the rest of the year. Revenue in the three months to September 26 fell 5.3% to EUR1.82 billion, from EUR1.92 billion, on a drop in volume to 547 million cases. Comparable earnings before interest and taxes fell 3.1% to EUR200.9 million though its margin improved slightly to 11.1% from 10.8%.
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Schroders reported a rise in assets under management over the course of the third quarter, citing GBP2.2 billion of net inflows and GBP2.5 billion of investment returns, foreign exchange and other factors. In a statement, the FTSE 100 asset manager said its assets under management rose to GBP276.2 billion at the end of September from GBP271.5 billion at the end of June. Schroders said it made a GBP130.3 million pretax profit in the third quarter, compared with GBP106.2 million in the corresponding period last year.
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Randgold Resources said earnings rose in the third quarter as a production increase driven by the ramp-up of the Kibali mine more than offset a currency hit, and it said it was on track to produce more than a million ounces of gold in 2014. The gold producer said third quarter earnings per share rose 11% compared with the second quarter, to USD0.63, while its profit from mining rose 6% on the quarter to USD172.6 million.
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Information services company Experian reported a rise in first-half pretax profit, citing strength in North America Credit Services, a return to growth in Brazil and a good all-round performance in the UK. Experian, which provides services such as helping to manage credit risk and prevent fraud, said it made a USD534 million pretax profit in the six months ended September 30, compared with USD480 million in the corresponding period last year. The group increased its first interim dividend by 7% to 12.25 US cents per share, citing strong cash performance.
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EasyJet said passenger numbers rose 5.5% on the year to 5.8 million in October, and its load factor rose to 90.9%, from 89.1%. It said passenger numbers were up 6.6% to 65.1 million in the 12 months to the end of October, compared with the previous 12 months when it flew 61.0 million. Load factor for the 12 month period rose to 90.7%, from 89.4%.
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Vodafone Group is understood to be considering buying a stake in Metroweb SpA in order to better compete with Telecom Italia SpA in the Italian market, Bloomberg reported. Vodafone could buy the stake from investor F2i SGR SpA, which owns 54% of the fibre-optic operator, Bloomberg said, citing three people familiar with the matter.
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Cruise company Carnival said it would increase fleet capacity by nearly 10% from 2014 through 2016, fuelled largely by the addition of four new ships across four brands in less than 18 months.
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Cable & Wireless Communications announced a placing of new shares representing up to 9.99% of its existing share capital to help fund the acquisition of Columbus International Inc for USD1.85 billion, while posting a rise in pre-tax profit for the half year to end-September. Columbus is a privately-owned telecommunications and technology services company based in Barbados. The company will fund the acquisition via the payment of USD707.5 million in cash and issue of 1.56 billion new shares in the company to some Columbus shareholders. The placing of 252.8 million new shares will part fund the cash element, with new debt financing being used for the remainder.
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UBM announced a GBP565 million rights issue to help pay for its GBP608 million acquisition of Advanstar Communications, saying it will offer four new shares at 287 pence for every five existing shares. UBM said the rights issue will result in 196.7 million new shares being issued, about 80% of its existing share capital.
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Tate & Lyle posted a big fall in pretax profit for the first half, hit by falling sales across the business which were impacted by supply chain issues and the strength of sterling. The sugar producer said pretax profit for the first half to the end of September was down to GBP104 million from GBP173 million a year earlier, down 40% on a reported basis and down 34% in constant currencies. The group hiked its interim dividend despite the profit fall, up to 8.2 pence per share from 7.8 pence a year ago.
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Spire Healthcare Group said it expects to see revenue for the full year of between GBP825 million to GBP840 million as it has traded in line with expectations, and announced that it had agreed a contract renewal with healthcare provider Bupa UK. The independent hospital group said that its Private Medical Insurer business has seen stable volumes with a marginal increase in revenue per case for the period from the start of July to end-October.
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Dairy Crest Group saw its shares rise strongly after it agreed a deal to sell its dairy operations for GBP80 million in cash, leaving it focused on its spreads and cheeses such as Cathedral City and Country Life as well as whey products for infant formula. The company has been moving away from unbranded commodity products for several years, scaling back the dairy operations and selling its commodity cheese operations. Its branded cheese and spread operations are more profitable, and Dairy Crest said it will also continue to grow its whey-based products, such as demineralised whey powder and galacto-oligosaccharide, for the infant formula market.
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Hikma Pharmaceuticals raised its 2014 group revenue guidance to around 7% growth, and said it was working with the US Food and Drug Administration to resolve "all outstanding" issues with its Portugal manufacturing facility "as quickly as possible". The company had previously guided around 5% group revenue growth for 2014.
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Fidessa Group said it has returned to underlying growth but warned that it expects the "exceptional" strength of sterling during the year to more than offset that and affect reported numbers. In a statement, the financial trading software and services provider said it has continued to see improvement across the markets in which it operates.
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Bikes to car parts retailer Halfords Group reported higher profits for the first half of its financial year, driven by sales of cycles and growth in online sales, but its gross margin declined and it raised its cost estimate for the retail business for the full year. The company reported a pretax profit of GBP49.4 million for the 26 weeks to September 26, up from GBP44.6 million a year earlier, as revenue rose to GBP524.1 million from GBP490.6 million. Like-for-like revenue rose 6.8% in its retail business and 4.4% in its autocentres, which undertake car maintenance.
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AIM Movers
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SeaEnergy shares are up after it said it was seeing continued growth across its business, with all segments meeting expectations, and it's on track to generate a profit for the full year. Corero Network Security is a big faller after saying its 2014 loss is likely will be wider and revenue lower than market expectations due to its shift to focus on the SmartWall Threat Defence System. Sweett Group has lost nearly a quarter of its value after it said it has "identified challenges" in some of its overseas operations. Sweett said its UK operations continued to recover in the first half of its financial year, but it said trading in Hong Kong had been disappointing and it is set to writedown the value of its Australian business in its full-year results unless there's a significant improvement in trading in the second half. It also said the Middle East remains a challenge, and it is committed to reducing and restricting its exposure to the region. Sweett also said it will book charges to cover the costs of its investigation into allegations of deception reported by the Wall Street Journal last year, as it continues to cooperate with a UK Serious Fraud Office probe into the allegations. Aurum Mining is also down, despite posting a narrower first half loss as it works to progress its gold joint venture with Ormonde Mining PLC and the Morille tungsten project with Plymouth Minerals Ltd.
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Top Economics And General
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UK industrial production growth exceeded expectations in September, data showed. Industrial output grew 0.6% in September from August, when it was down by 0.1%, the Office for National Statistics reported. Production was forecast to grow only 0.4%. Manufacturing output advanced at a pace of 0.4% after rising 0.2% a month ago. It was slightly faster than an expected 0.3% increase. On a yearly basis, industrial production growth slowed to 1.5% from 2.2% in August. Likewise, manufacturing growth eased to 2.9% from 4% a month ago. Industrial output was expected to rise by 1.6% and manufacturing to grow 2.8%.
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House prices in the UK rose at a slower-than-expected annual rate in October, figures from the Lloyds Banking Group unit Halifax showed. The house price index rose 8.8% year-on-year following 9.6% gain in September. Economists had expected a 9.1% increase. House price inflation eased for a third straight month after peaking at 10.2% in July.
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A full competition investigation into the personal current account and small- and medium-sized enterprise retail banking sectors was Thursday launched by the Competition and Markets Authority, the UK's main competition and consumer authority. The move to launch an inquiry follows a consulting period on the CMA's provisional decision in July that there should be a market investigation into the markets for personal current accounts and SME banking.
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US-led coalition forces struck the base of a hardline Islamist group in northern Syria, a monitoring group said, in what appears to be the first raid on rebels not directly linked to either the Islamic State or al-Qaeda. The base struck belonged to the Ahrar al-Sham rebel group in Basiqa, near the key Bab al-Hawa border crossing with Turkey, said the Syrian Observatory for Human Rights.
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Members of the Bank of Japan's monetary policy board said the pace of the country's economic recovery was satisfactory, minutes from the board's meeting on October 6 and 7 revealed. The biggest downside risk to the economy includes commodity-exporting economies, the European debt problem and the race of recovery in the US, the minutes showed. "Japan's economy is expected to continue its moderate recovery trend, and the effects including those of the subsequent decline in demand following the front-loaded increase prior to the consumption tax hike are expected to wane gradually," the minutes said.
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Afternoon Watchlist (all times in GMT)
13:15 US ADP Employment Change
14:30 US Fed's Lacker speech
14:45 US Markit Services PMI
15:00 US Federal Reserve Bank of Boston President Rosengren Speech
15:00 US ISM Non-Manufacturing PMI
15:30 US EIA Crude Oil Stocks change
23:45 US Former Fed's Bernanke speech
23:50 Japan BoJ Monetary Policy Meeting Minutes
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Friday's Key UK Corporate Events
Croda International - Interim Management Statement
Scottish Mortgage Investment Trust - Half Year Results
Spirax-Sarco Engineering - Interim Management Statement
Ark Therapeutics Group - Interim Management Statement
Capital & Regional - Interim Management Statement
Rentokil Initial - Trading statement
Admiral Group - Interim Management Statement
National Grid - Half Year Results
Capital & Counties Properties - Interim Management Statement
Bovis Homes Group - Interim Management Statement
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Friday's Key Economic Events (all times in GMT)
00:05 US FOMC Member Mester speech
07:00 Germany Industrial Production
07:00 Germany Trade Balance
07:45 France Budget
07:45 France Industrial Output
07:45 France Trade Balance
09:30 UK Total Trade Balance
13:30 US Nonfarm Payrolls
13:30 US Unemployment Rate
18:00 US Fed's Evans Speech
20:00 US Consumer Credit Change
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4 Jul 2016 10:28
