LONDON (Alliance News) - The following is a summary of top news stories Tuesday.
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COMPANIES
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Wm Morrison Supermarkets for the second month in a row was the only member of the big four UK supermarkets to increase sales, according to Kantar Worldpanel UK's grocery market data. Morrisons sales rose 0.6% in the 12 weeks to June 21 to GBP2.79 billion from GBP2.77 billion in the same period a year earlier, as its market share increased to 11.0% from 10.9%. J Sainsbury and Tesco came in joint second place out of the big four in the Kantar data, both experiencing an annual sales decline of 1.3% in the period. Sainsbury's sales were at GBP4.18 billion, down from GBP4.23 billion a year before, as its market share declined to 16.5% from 16.7%, while Tesco sales fell to GBP7.24 billion from GBP7.34 billion, as its market share dropped to 28.6% from 28.9%.
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Ocado Group reported a small decline in profit in the first half of its financial year even though sales grew, as it booked costs associated with investments, distribution and administration. The online grocery business said pretax profit in the 24 weeks ended May 17 slipped to GBP7.2 million from GBP7.5 million in the same period the year before, despite revenue rising 18% to GBP507.7 million from GBP429.7 million.
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Banco de Sabadell's takeover offer for TSB Banking Group has become unconditional after the Spanish bank's move won approval from Bank of England regulators, confirming Lloyds Banking Group's disposal of the bank. In a statement, Sabadell said the Prudential Regulation Authority, part of the Bank of England, gave its approval to the change of control of TSB.
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X2 Resources, the private-equity firm founded by former Xstrata Chief Executive Officer Mick Davis, is in talks to buy Rio Tinto's controlling stake in three Australian coal mines, reports said citing two people familiar with the matter. According to the reports, the negotiations are at an early stage and any deal, which may fetch USD2 billion to USD4 billion, could take two months to finalise. The Rio mines in New South Wales have positive cash flow, despite the current coal-price slump.
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Hikma Pharmaceuticals is among bidders for Boehringer Ingelheim GmbH's Roxane Labs business in the US, Bloomberg reported citing people familiar with the matter. The report said that other potential buyers for the generic pharmaceutical unit, which may fetch as much as EUR2 billion, include Mallinckrodt and Perrigo. A decision on the winner could be made within weeks, though the German drugmaker may still choose to keep the asset.
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Admiral Group has struck a connected-car deal which will mean the motor insurer will be able to generate video footage of a crash using Google Earth within minutes of the accident happening, despite no camera being present in the car, the Financial Times reports. Admiral has signed a three-year deal with Redtail Telematics, a car-tracking hardware and software company, to supply its Plug & Drive policy. Policyholders will be given a device which will plug into the car and will communicate to Admiral how the customer is driving.
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Outsourcer Capita said it has struck a deal to acquire Vertex Mortgage Services Ltd for GBP35 million, subject to regulatory approval. Capita said the deal will strengthen its position in the third-party mortgage administration market, building on last year's acquisition of Crown Mortgage Services Ltd.
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Telecommunications and IT services provider Colt Group outlined its new business plan to "refocus" its activities and improve its performance, but said it expects to book heavy exceptional costs in relation to the plan. The plan is unrelated to the recent offer from financial services group Fidelity made to buy up the remainder of Colt it does not already own and take it private. Fidelity made an offer that values Colt at around GBP1.72 billion. However, the independent directors of Colt said the offer "undervalues" the business, and at that time said the new business plan was an "important factor" in this conclusion. Colt said its new business plan will streamline the business to focus on its core network, voice and data centre services business by exiting IT services over the next two to three years.
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St Modwen Properties said it expects to see positive momentum continue into the second half of its financial year after reporting a jump in pretax profit for the first. The FTSE 250-listed regeneration property company said it made a GBP177.6 million pretax profit in the six months ended May 31, compared with GBP48.6 million in the corresponding period of the prior year.
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Commercial light vehicle rental company Northgate said pretax profit surged in its 2015 financial year as revenue rose across both hire and sale business, prompting the company to hike its dividend payout by nearly half. Northgate said its pretax profit in the year to April 30 was GBP83 million, up from GBP51.2 million a year earlier. Total revenue for the company rose to GBP614.3 million from GBP571.5 million. The results prompted the company to raise its final dividend to 10.2 pence per share from 6.8 pence a year earlier, meaning its total dividend payout rises by 45% to 14.5 pence from 10.0 pence.
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MARKETS
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London stock indices have come off their intraday lows mid-morning amid reports of a last-ditch attempt by Brussels to make a deal with Greece to solve its debt crisis.
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FTSE 100: down 0.6% at 6,581.80
FTSE 250: down 0.3% at 17,484.00
AIM ALL-SHARE: down 0.2% at 753.84
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The pound hit a high of USD1.5745 versus the dollar after the release of positive UK GDP data but then fell back.
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GBP: down at USD1.5721
EUR: down at USD1.1172
GOLD: down at USD1174.89 per ounce
OIL (Brent): up at USD62.58 a barrel
(changes since end of previous GMT day)
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ECONOMICS AND GENERAL
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Greek Prime Minister Alexis Tsipras has a last-minute offer from European leaders in front of him that seeks to solve his country's bailout crisis, an EU source says. Tsipras would have to accept in writing the last compromise proposal made by Greece's creditors and commit to campaigning for a "yes" vote in a controversial referendum that Athens will hold on the proposal this Sunday, the source says on condition of anonymity. The offer was made to the Greek prime minister by European Commission President Jean-Claude Juncker on Monday.
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Thousands of Greek people rallied on Monday in Athens to back their government's rejection of a tough bailout dictated by its creditors after the Greek government closed banks and imposed capital controls due to its failure to clinch a debt deal with its creditors.
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The UK economy grew more than previously estimated in the first quarter, the Office for National Statistics showed. Gross domestic product gained 0.4% sequentially, revised up from the 0.3% growth estimated on May 28. Year-on-year, GDP growth revised up to 2.9% from 2.4% in the first quarter. Production output increased revised 0.2% from the prior quarter. Within the production, output from mining and quarrying was down 0.5%. Manufacturing output advanced 0.1%.
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Consumer confidence in the UK surged in June, the latest survey from marketing research company GfK revealed, with an index score of +7. That handily beat forecasts for a reading of +2, and it was up from +1 in May. The survey showed that UK residents are more optimistic about their personal financial situation than they have been since January 2000. Analysts suggest the spike in confidence is the result of a solid victory by conservatives in the recent national elections.
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Eurozone inflation slowed slightly in June after accelerating in May, flash data from Eurostat showed. Inflation eased to 0.2% in June, in line with forecast, from 0.3% in the prior month. The European Central Bank targets inflation below, but close to, 2% over the medium term. Core inflation that excludes energy, food, alcohol and tobacco slowed marginally to 0.8% in June from 0.9% in May. Core inflation figure also matched economists' expectations. Another report from Eurostat showed that the unemployment rate remained unchanged at 11.1% in May. This was the lowest rate recorded in the euro area since March 2012. It came in line with expectations.
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US President Barack Obama signed two measures that pave the way for completion of a 12-nation trans-Pacific trade agreement. Obama called the legislation, which passed last week in one of the most important legislative victories in his second term, "a true bipartisan achievement". Obama signed the trade laws at a White House ceremony. One of the measures is trade promotion authority, which gives the president so-called fast-track power to negotiate trade deals, including the Trans-Pacific Partnership, a key part of his economic agenda. The second measure renews and expands a programme designed to help American workers whose jobs are lost because of trade deals or foreign competition.
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Chinese Prime Minister Li Keqiang declared open the next chapter in his country's relations with the European Union, at a Brussels summit featuring new economic plans but also long-standing disagreements between the two sides. "The 17th China-EU summit can serve as a new starting point," Li said at a joint press conference with top EU officials - a first for a Chinese leader at a Brussels summit. Keqiang announced that his country is willing to participate in a new investment plan being touted by the EU as a response to its economic doldrums, while European officials expressed interest in a Chinese strategy to improve infrastructure links with Europe.
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By Arvind Bhunjun; arvindbhunjun@alliancenews.com; @ArvindBhunjun
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