LONDON (Alliance News) - The following is a summary of top news stories Thursday.
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COMPANIES
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Housebuilder Barratt Developments said it expects to post a 45% rise in annual profit for the year to the end of June as it sold more houses at higher prices over the period. Barratt said it expects total completions for the year to the end of June to be up by 11% to 16,447 units from 14,838 a year earlier, on the back of strong consumer demand and increased site numbers. It added its private average selling price in the year increased by 8% to GBP262,000 from GBP241,600 a year earlier, helped by changes in its sales mix and underlying house price inflation.
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Associated British Foods said its results for the full year will be harder hit than expected by the weak euro, as revenue in the first 40 weeks was flat at actual rates amid continued tough trading in its sugar business, offset a still-buoyant performance by discount fashion retailer Primark. AB Foods said group revenue for the 40 weeks to June 20 was up by 2% in constant currencies. AB Foods said it expects the weakness of the euro to impact on its full-year results for 2015 more than previously anticipated, with currency translation set to hit its profit by around GBP25 million. Primark sales rose by 9% in the period, and by 13% in constant currencies.
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Drugmaker AstraZeneca said it has entered an agreement with Tillotts Pharma, a unit of Japanese pharmaceutical company Zeria Group, to sell the non-US sales and development rights to its Entocort product. Entocort is a gastroenterology medicine for patients with mild to moderate Crohn's disease and ulcerative colitis and generated sales of USD53 million outside of the US in 2014, Astra said. Tillott will pay Astra USD215 million upon completion of the deal.
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Clothing retailer SuperGroup said its pretax profit rose in its 2015 financial year on the back of robust retail sales over the course of the year and said it has signed a joint venture deal to enter the Chinese market as sales in the first quarter rose sharply against weak comparables. The Superdry brand owner said its pretax profit for the year to April 25 was GBP59.5 million, up from GBP45.2 million last year when the group was hit by GBP16.8 million in exceptional charges. Revenue increased to GBP486.6 million from GBP430.9 million, and the group's gross margin improved to 60.9% from 59.7%.
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Homewares retailer Dunelm Group said its sales continued to grow in the fourth quarter of its financial year and said it has hired a new chief financial officer from fellow FTSE 250 constituent Go-Ahead Group. Dunelm said its total sales in the fourth quarter to June 27 were up by 12.1% to GBP200.1 million, helping to push its total sales for the full year up 12.7% to GBP822.7 million. Dunelm said it has appointed Keith Down as its new chief financial officer, with plans for him to take on the role in December when his predecessor, David Stead, retires from the board. Go-Ahead said it has started the process of finding Down's replacement as finance director.
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Hays reported growth in net fees for the fourth quarter, driven by its permanent recruitment business, though figures were hurt by the depreciation of the euro and Australian dollar against sterling. Despite the pressure from foreign exchange movements, FTSE 250-listed Hays reiterated its guidance that second half operating profit will be "slightly ahead" of the first half's GBP81.5 million. Hays said currency movements remain a "material sensitivity" to profitability in the new financial year.
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Engineering IT systems provider AVEVA Group said its first quarter revenue and profit have continued to suffer amid tough trading conditions and the strong pound. The company said it has seen no significant change in its end markets since it published its results for the year to the end of March back in May, but said that in spite of a challenging market, it remains a "resilient" business.
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Premier Oil said production and revenue fell in the first half of the year as expected due to a combination of the fall in oil prices and the sale of some of its assets. The oil and gas producer said production in the first half of 2015 was 60,300 barrels of oil equivalent per day, down from 64,900 barrels per day a year earlier after the company sold some of its assets in the UK during 2014. The company reiterated its full-year 2015 guidance of 55,000 barrels of oil equivalent per day, but this excludes any new production from the Solan field in the UK North Sea, which will come online in the fourth quarter of 2015.
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GVC Holdings has tabled a formal takeover offer for bwin.party digital entertainment that values its online gambling rival at 110 pence per share, equivalent to about GBP906.5 million, the companies said on Thursday. A takeover would be paid for in cash and new shares issued by GVC, the companies said.
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Grafton Group said its revenue in the first half increased on the back of good performances in its UK merchanting and manufacturing businesses, even as its operations in Europe were dragged back by the weak euro. The builders merchant and DIY company said its group revenue in the six months to the end of June was up by 6.6% to GBP1.08 billion, though it increased by 9.5% in constant currencies.
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Balfour Beatty said it expects an additional hit to its pretax profit in 2015 due to legacy issues in its UK, US and Middle East businesses. Balfour said the ongoing review of its business to identify legacy issues will result in a further GBP120 million to GBP150 million hit to its pretax profit for 2015, with around two-thirds of this coming from its UK business.
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MARKETS
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UK shares are mostly higher mid-morning as the market waits for Greece to send a new reform proposal to its international creditors to avoid ejection from the eurozone, while Chinese stocks closed higher, rebounding from Wednesday's losses.
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FTSE 100: up 0.9% at 6,551.07
FTSE 250: up 0.8% at 17,247.00
AIM ALL-SHARE: flat at 743.94
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The pound trades higher versus the dollar ahead of the Bank of England's interest rate decision at 1200 BST, though no change to interest rates or asset purchases is expected.
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GBP: up at USD1.5386
EUR: down at USD1.1028
GOLD: up at USD1162.10 per ounce
OIL (Brent): up at USD57.40 a barrel
(changes since end of previous GMT day)
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ECONOMICS AND GENERAL
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British house prices increased at the fastest pace in eleven months in June, the latest survey from the Royal Institution of Chartered Surveyors showed. The survey showed that monthly house price balance climbed to +40 in June from +34 in May, while it was expected to increase slightly to +36. It was the biggest rate of growth since July 2014. The average stock of homes per surveyor fell to a historical low, demand edged upwards for the second successive month, despite the more cautious attitude of lenders. "There had been some hope that the removal of political uncertainty following the general election would encourage more properties onto the market but the initial indications are that this is not happening," said RICS chief economist Simon Rubinsohn.
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Numerous renewable energy companies responded to the UK government's decision to remove the exemption that generators of renewable electricity have had from the climate change levy. In the first Conservative-only budget since the break up of the coalition government, UK Chancellor George Osborne said he will scrap the "out-dated" climate change levy, which was introduced in 2001 with the aim of improving energy efficiency and increase demand for renewable energy. Osborne said one of the main reasons for the changes was to prevent energy generation abroad benefiting from UK taxpayers' money.
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Bundesbank President Jens Weidmann sounded a cautious note on providing further financial aid to Greece as it teeters on the brink of bankruptcy. "In Greece, doubts about the solvency of banks are legitimate and rising by the day," the head of the German central bank said in a speech to a conference in Frankfurt. "It needs to be crystal-clear that responsibility for further developments in Greece and for any decisions on transferring financial resources lies with the Greek government and the countries providing assistance - not the [European Central Bank] Governing Council," Weidmann said.
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Most US Federal Reserve members are not ready to raise interest rates, according to the minutes of the June Federal Reserve meeting. They are waiting for more data to confirm "economic growth was sufficiently strong and labor market conditions had firmed enough to return inflation to the Committee's longer-run objective over the medium term" according to the minutes. There was only one member of the Federal Open Market Committee wanting to hike rates in June, but even that policy maker was willing to remain patient for another meeting or two.
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Chinese stocks jumped sharply after falling on opening for the third consecutive day, amid aggressive measures by the authorities to shore up share prices. In the latest measures, China's central bank said it has injected CNY35 billion into the money market through open market operations. The bank also will allow the national margin trading service provider to issue short-term bonds in the interbank market to replenish liquidity. The country's securities regulator said late Wednesday that big shareholders who hold more than 5% of a company's shares must not reduce their holdings in the coming six months. China's state asset regulator ordered the country's centrally administered state-owned enterprises not to sell shares of their listed companies amid "abnormal market volatility".
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Consumer prices in China were up 1.4% on year in June, the National Bureau of Statistics said. That exceeded forecasts for 1.3% and was up from 1.2% in May. On a monthly basis, consumer prices were flat. Producer prices contracted 4.8% on year in June versus forecasts for a fall of 4.6%, which would have been unchanged.
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Germany's exports logged unexpected growth in May, data from Destatis revealed. Exports rose 1.7% in May from prior month, confounding expectations for a 0.8% fall. It was the fastest growth rate seen so far this year. In April, exports had climbed 1.6%. At the same time, imports rebounded in May after declining a month ago. Imports were up 0.4% versus a 0.8% drop in April. Economists had expected a 0.1% gain. As a result, the trade surplus increased to a seasonally adjusted EUR22.8 billion from EUR21.5 billion in April.
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Afghan officials and Taliban representatives met overnight in Islamabad for the first official talks in more than two years, and agreed to meet again after Ramadan, Pakistani officials said Wednesday. "It is ice-breaking," said a Pakistani security official involved in the process. "Acknowledging a problem is the first step to resolving it and that step has been taken." It was the first official meeting since a 2013 attempt to open a political office for the Taliban in the Gulf state of Qatar ended amid an uproar over the flag the militants wanted to display.
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12 May 2016 07:36
