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LONDON (Alliance News) - Spirits and alcoholic beverage giant Diageo Thursday reported another dip in sales in the third quarter due to further volume declines and weaker Emerging Markets.
The world's largest spirits producer, and a major producer of beer and wine, said that organic net sales were down 1.3% in the third quarter ended March 31, while volume fell by 1%.
Making headlines for the second day in a row, RSA Insurance Group said it has sold its operations in the Baltics and Poland for GBP300 million in cash, part of its effort to shore up its balance sheet it the wake of its recent problems in Ireland.
Fellow FTSE 100 constituent Royal Dutch Shell has made a deep water gas exploration discovery at the Rosmari-1 well off the coast of Malaysia, adding to a sequence of exploration successes in the region. The company said further exploration is now planned at the block.
Here is what you need to know at the UK market open:
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MARKETS
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FTSE 100: Down 0.2% at 6,572.02
FTSE 250: Up 0.1% at 15,761.28
AIM ALL-SHARE: Up 0.2% at 825.86
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Hang Seng: Up 0.3% at 22,758.97
Nikkei 225: Closed Flat at 14,417.53
DJIA: Closed Up 1.0% at 16,424.85
S&P 500: Closed Up 1.1% at 1,862.31
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GBP-USD: Up at USD1.6826
EUR-USD: Up at USD1.3837
GOLD: Down at USD1,298.60 per ounce
OIL (Brent): Up at USD109.75 a barrel
(changes since end of previous GMT day)
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ECONOMICS AND GENERAL
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Thursday's Key Economic Events still to come
(all times British Summer Time)
09:00 EU Current Account
13:30 US Initial Jobless Claims
15:00 US Philadelphia Fed Manufacturing Survey
15:30 US EIA Natural Gas Storage change
20:00 US American Petroleum Institute Monthly Report
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The Federal Reserve will keep its benchmark interest rates at exceptionally low levels for a considerable time, Fed Chair Janet Yellen said Wednesday. Yellen acknowledged that economic growth slowed over the winter, but suggested that a significant part of the weakness was due to unusually cold winter weather. She insisted again that the Fed will remain highly accommodative until employment and inflation reach healthier levels. Yellen has taken an increasingly dovish tone since her press conference explaining the Fed's most recent interest rate decision back in March.
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Western diplomats were gathering Thursday in Geneva with representatives from Ukraine and Russia to seek de-escalation of the crisis between the two neighbours, as NATO moved to bolster its eastern defences. The alliance decided Wednesday to deploy extra equipment and military personnel in its eastern expanses, as the standoff intensified between pro-Russian militants and Ukrainian troops in eastern Ukraine.
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The confirmed death toll has reached nine in the South Korean ferry sinking, as fears grew for hundreds still missing. The latest three bodies were found when military divers and other rescuers resumed their search. So far 179 people have been rescued, 50 with injuries, Yonhap reported. The coast guard said the ship listed to one side and began taking on water. It sank in two hours.
More than 100 ships and planes from the military and coast guard scoured the area, the Yonhap News Agency reported. Fishing boats joined the operations, and more than 550 divers were deployed.
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BROKER RATING CHANGES
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GOLDMAN RAISES NEXT PRICE TARGET TO 6250 (5600) PENCE - 'NEUTRAL'
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GOLDMAN CUTS PETROFAC TO 'NEUTRAL' ('BUY') - TARGET 1356 (1450) PENCE
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UBS CUTS GLAXOSMITHKLINE PRICE TARGET TO 1500 (1650) PENCE - 'NEUTRAL'
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TRADERS: JEFFERIES CUTS WILLIAM HILL TO 'HOLD' ('BUY')
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S&P CAPITAL IQ RAISES BHP BILLITON TO 'HOLD' ('SELL') - PRICE TARGET 1900 (1800) PENCE
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COMPANIES - FTSE 100
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Spirits and alcoholic beverage giant Diageo reported another dip in sales in the third quarter due to further volume declines and weaker Emerging Markets. Diageo said that organic net sales were down 1.3% in the third quarter ended March 31, while volume fell by 1%. Diageo said current exchange rates would wipe around GBP330 million off of its operating profit for the year ending June 30.
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RSA Insurance Group has sold its operations in the Baltics and Poland for GBP300 million in cash, part of its effort to shore up its balance sheet it the wake of its recent problems in Ireland. The insurer as forced to launch a GBP773.0 million rights issue as part of a package of measures to shore up its balance sheet in the wake of the Irish losses. The measures included the scrapping of its dividend, a cover policy underwritten by Berkshire Hathaway, and plans to raise GBP300 million from business disposals in 2014.
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Severn Trent said following continued constructive dialogue with Ofwat on its Business Plan for 2015-2020 it plans to resubmit the document to Ofwat on June 27.
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Royal Dutch Shell has made a deep water gas exploration discovery at the Rosmari-1 well off the coast of Malaysia, adding to a sequence of exploration successes in the region. The company said further exploration is now planned at the block and said the finding shows the positive potential for gas in the strategically important region for Shell.
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COMPANIES - FTSE 250
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Taylor Wimpey says it has seen positive momentum since February, recording a strong Q1 - with improvement across regions. The firm said it anticipates FY average sales ahead of 2013. Taylor Wimpey CEO said the UK housing market remains buoyant and customers are benefiting from the current mortgage market.
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Cobham has sold its remaining non-core business in Texas to its management team.
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Ferrexpo says Q1 sales volumes up 10.8%, 2.8Mt Vs 2.6Mt; average cash costs down 21% to USD50.3/t and the production of high grade 65% Iron Pellets was up 31.0%, 1.4Mt Vs 1.0Mt. The firm says production growth is on track to reach 12Mt per year run rate by year end.
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Synergy Health says revenue growth for its last quarter came in lower than anticipated, though said that it has worked to improve margins and now expects to report earnings in line with board expectations, boosted by recent contract wins supporting growth in its order book.
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COMPANIES - ALL-SHARE AND AIM
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Havelock Europa said FY pretax profit (pre-items) came in at GBP0.6 million form a GBP0.5 million loss. Revenues for the year was GBP89.6 million, slightly down from GBP92.5 million last year.
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EW Group has acquired all the issued shares of European Wealth Management Group in a deal worth approximately GBP13.45 million, with the value of the total consideration around GBP7.1 million.
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Motive Television signs Skyworth Digital contract.
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Falanx has entered an agreement with MDS Technologies Ltd to develop new cyber security capabilities and an agreement with Assuria Ltd for cyber security software products
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Providence Resources says planning for a 1,000 Km 2D Seismic Survey has started. The firm said Principle Hydrocarbon Potential Identified In Jurassic, Cretaceous Intervals. Also, Providence has offered to convert its Newgrange Licensing Option to a Frontier License.
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Nighthawk Energy Says Drilling Of A Salt Water Disposal Well At Arikaree Creek Is Now Complete; March Average Gross Oil Production 1,885BBLS/Day.
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John Lewis Of Hungerford said half-year pretax profit came in at GBP50,000 Vs GBP18,000; revenue of GBP3.6M Vs GBP3.1M, with an operating profit of GBP66,000 Vs GBP35,000.
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Caza Oil & Gas has reported another strong result on the second bone Spring Well at West Copperline.
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Leni Gas & Oil has received approval to start drilling at Goudron and has mobilised the drill rig. The firm plans to test production after Easter Holiday. Leni says value of total consideration approximately GBP7.1 million.
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Blur Group says FY Bookings USD22.2M Vs USD2.4M, with revenue recognised at USD5.3M-USD5.6M Vs USD2.8M. The company said a significant proportion of revenue from 2013 booking have not yet been recognised, due in 2014. Blur's CEO said its recent USD15M contract win in its Legal Category is its largest ever project.
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Mulberry Says FY Pretax Profit To Be Approximately GBP14M, expects to book GBP2.7 million impairment charge on two US stores as well as a material hit on profit while brand momentum rebuilds. The firm said international expansion slowed to control costs while existing stores achieved greater traction.
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Thursday's Scheduled AGMs/EGMs
Taylor Wimpey
Aberdeen Smaller Companies High Income Trust
Lavendon Group
Breedon Aggregates
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By Alice Attwood; aliceattwood@alliancenews.com; @AliceAtAlliance
Copyright © 2014 Alliance News Limited. All Rights Reserved.
