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LONDON (Alliance News) - The following is a summary of top news stories Wednesday.
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COMPANIES
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HSBC Holdings PLC reported a 20% drop in first-quarter pretax profit driven by a poor performance in its heartland of Asia, partially offset by lower impairment charges and expenses, as the bank continued to cut costs and become more efficient. In a statement, HSBC, which is the UK's largest bank by market capitalisation, said first-quarter pretax profit fell to USD6.79 billion, from USD8.43 billion in the corresponding quarter a year earlier. The bank also said it continued to experience "muted" customer activity in April. The bank, which is predominantly focused on emerging markets, said the drop in pretax profit arose from lower gains being made from disposals and foreign exchange than in the comparative quarter of 2013, as well as lower revenue. In Asia, pretax profit fell by USD1.75 billion to USD3.76 billion.
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British supermarket chain J Sainsbury PLC reported higher pretax profit for its recent financial year, as the group's convenience stores and online offering continued to drive the group forward.On a statutory basis, which includes all these items, the group reported pretax profit of GBP898 million, up 16% on the GBP772 million reported a year earlier. A big part of Sainsbury's success story is its own-brand range and its premium own-brand "Taste the Difference" range, which have both continued to growth, with "Taste the Difference" achieving over GBP1.1 billion in annual sales during the year. Sainsbury's also said its online business grew by more than 12% during the year, achieving over GBP1 billion in annual sales. Mike Coupe will take the reins on July 9 from outgoing Chief Executive Officer Justin King and faces a challenge to maintain momentum, as the group's profit is expected to fall to around GBP752 million in the year ahead.
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Rolls-Royce Holdings said it has signed an agreement to sell its energy gas turbine and compressor business to German engineering firm Siemens AG in a deal worth GBP785 million in cash. The business being sold supplies aero-derivative gas turbines, compressor systems and related services to customers in the oil and gas and power generation sectors. Rolls-Royce said that on completion of the transaction it will receive a further GBP200 million for a 25-year licensing agreement, granting Siemens access to relevant Rolls-Royce aero-derivative technology. On completion of the transaction, Rolls-Royce's shareholding in the Rolls Wood Group joint venture, which provides maintenance, repair and overhaul services will be transferred to Siemens.
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Legal & General Group PLC said it expects to write more than enough bulk-purchase annuities to offset an expected decline in the individual annuities market in the wake of UK regulatory changes, as it reported a 21% increase in quarterly net cash generation. Moving to dispel fears that changes unveiled in the UK government's 2014 Budget in March that give retirees more flexibility in how they manage their pensions in that they no longer have to buy individual annuities, Legal & General said bulk purchase annuity premiums increased to GBP3.05 billion from GBP357.0 million.However, individual annuity sales fell by 40% to GBP244.0 million as people cancelled GBP15.0 million annuities taken out prior to changes made in the Budget.
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Vodafone PLC said that it has renewed its strategic global alliance with French telecommunications firm SFR. The renewed deal is for a further four years and will see the companies continue to provide fixed and mobile telecommunications services to multi-national customers in France as well as roaming services for consumers traveling in and from the country. The companies will work together on new business opportunities, including machine-to-machine services, 3G and 4G roaming and unified communications across France and the rest of the world. Vodafone will also continue to offer SFR a range of Vodafone Global Enterprise services for use by customers in France.
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Imperial Tobacco Group PLC reported lower pretax profit and revenue for the first half of its financial year, as it continues to reduce stock levels to improve supply and cost efficiencies. The group said that its tobacco-product stock optimisation programme reduced trade inventories in a number of markets, especially Iraq and Russia. It said that while it achieved significant stock reduction, this hit volume, revenue and profit for the period. It also said its cost optimisation programme is on track to deliver incremental savings of GBP60 million for the full year. Imperial Tobacco said that while its reported results were adversely affected by its stock optimisation programme, the reduction in profits and earnings per share also were caused by increased non-cash amortisation charges and deferred tax charges.
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Experian PLC reported an increase in full-year profit but said it faces a number of constraints on growth in the short-term, while it also appointed a new chief operating officer after Chris Callero decided to stand down at the company's annual general meeting in July. Experian helps businesses to manage credit risk, prevent fraud, target marketing offers, and automate decision making, while providing credit checks for individuals. It said pretax profit from continuing operations increased to USD1.05 billion in the year ended March 31, up from USD434.0 million a year earlier. Revenue increased to USD4.84 billion from USD4.73 billion, driven by good revenue growth in credit services, decision analytics, and consumer services, it said.
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G4S PLC said it has performed in line with its plans during the first quarter of 2014, boosted by contract wins with annual revenues of more than GBP440 million. In an interim management statement, the security firm said revenues were up 4.8% on the first quarter in 2013, with organic growth up 5.0%. During the first three months of the year, G4S said it has won new business contracts with annual revenues of more than GBP440 million, including retail and services customers in the US, retail customers in Brazil, port security consultancy in the Middle East, cash solutions contracts in the Netherlands and significant new business with the UK Government.
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ITV PLC said it has agreed to acquire a controlling stake in Leftfield Entertainment Group in a USD360 million cash deal. ITV has acquired 80% of Leftfield, US independent producer of reality programmes, from its founder and chief executive, Brent Montgomery. The acquisition, which has already gained regulatory approval, makes ITV's US studios the largest unscripted independent producer in the US, it said, and will be earnings enhancing from "day one."
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Inmarsat PLC said first quarter revenues rose 9.9%, driven by its wholesale mobile satellite services (MSS) business and stronger retail operations. The mobile satellite company said revenues for the three months to March 31 rose 9.9% to USD322.7 million from USD313.7 million in the comparable quarter last year. Inmarsat said total global MSS revenues were up 3.7% to USD191.5 million from USD184.6 million in 2013. On a divisional basis, MSS maritime revenues were up 6% and MSS aviation revenues were 20% higher.
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MARKETS
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UK stocks are trading lower, as investors take their cues from a negative Asian session amid a dearth of fresh UK macroeconomic data.
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FTSE 100: down 0.4% at 6772.32
FTSE 250: down 0.4% at 15873.74
AIM ALL-SHARE: down 0.4% at 817.09
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The euro is down against the dollar after data showed a decline in Germany's construction sector and factory orders.
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GBP-USD: flat at USD1.6970
EUR-USD: down at USD1.3920

GOLD: up at USD1311.03 per ounce
OIL (Brent): up at USD107.30 a barrel

(changes since end of previous GMT day)
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ECONOMICS AND GENERAL
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Overall shop prices in the UK were down 1.4% on year in April, the British Retail Consortium said. That missed forecasts for a decline of 0.8% following the 1.7% contraction in March. Overall, it was the 12th straight month that shop prices have declined. On a monthly basis, shop prices were down 0.5%. Clothing prices were down 0.8% on month in April after dipping 0.3% in March.
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German factory orders declined unexpectedly in March due to a sharp decrease in foreign demand, official data revealed. Factory orders fell 2.8% month-on-month in March, reversing the revised 0.9% rise posted in February, Destatis reported. Economists were forecasting 0.3% rise for March.
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Germany's construction sector shrunk for the first time in a year in April, as companies reported decline in new orders and weaker employment growth, survey results from Markit Economics showed. The seasonally adjusted Purchasing Managers' Index for the German construction sector declined to 49.7 from 52.5 in March. A PMI score below 50 indicates contraction in the sector. The latest fall in activity, albeit marginal, was the first since April last year, the survey said.
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France's manufacturing output also unexpectedly fell in March, after rising in the previous month, figures from the statistical office INSEE showed. Manufacturing output declined 0.7% from February, when it grew 0.3%. Economists had forecast 0.1% growth for March. The latest decline ended the upward trend that began in October last year, INSEE said.
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The US and the EU on Tuesday condemned plans for an independence referendum called by separatist leaders in two eastern Ukraine regions - Donetsk and Luhansk. "We flatly reject this illegal effort to further divide Ukraine," US Secretary of State John Kerry said. "And its pursuit will create even more problems in the effort to try to de-escalate the situation." No civilized nation will recognize the results of "such a bogus effort," Kerry said. The Ukrainian leadership has admitted that it no longer controls the two regions and accuses Russia of aiding and arming the separatists, which Moscow denies.
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Activity in China's services sectors continued to expand in April, albeit at a slower pace, the latest survey from HSBC and Markit Economics revealed. The services PMI came in with a score of 51.4 in April, slowing from 51.9 in March. A score above 50 signals expansion in a sector, while a reading below 50 means contraction.
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Members of the Bank of Japan's monetary policy board said the country's economic recovery appears to be continuing at a moderate pace, minutes from its meeting on April 7 and 8 revealed. The country may finally be winning its decade-old war against deflation, the board noted, as expectations continue to suggest an increase in prices. The members did caution, however, that the consumption tax hike that went into effect in April may result in a decline in demand.
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Free trade talks between Japan and the EU are due to dominate a summit Wednesday between Japanese Prime Minister Shinzo Abe and the bloc's top officials in Brussels, with attention expected to turn also to events in Ukraine. "An ambitious free trade agreement will unleash the full potential of the trade and economic relationship between the EU and Japan," said European Commission President Jose Manuel Barroso ahead of the talks.
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Thai caretaker Prime Minister Yingluck Shinawatra was sacked by a Constitutional Court ruling that she illegally transferred a civil servant three years ago. The guilty verdict also removes nine of her cabinet members from office. The remaining 26 cabinet members will continue in a caretaker capacity until a new government takes office. The cabinet nominated Deputy Prime Minister Niwatthamrong Boonsongpaisan, to replace the ousted prime minister.
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