LONDON BRIEFING: Merlin Warns On Profit After Coaster Crash

LONDON (Alliance News) - Merlin Entertainments leads blue-chip decliners amid a mostly red start to the new week in London.

Asian markets gave a negative lead Monday, with the Nikkei 225 in Tokyo closing down 1.0%. In Hong Kong, the Hang Seng is trading down 3.2%, while the Shanghai Composite has resumed its sharp declines of late, falling 8.5%.

Merlin Entertainments said it expects its full-year results to be below its previous forecasts due to the roller-coaster crash at its Alton Towers theme park in June. Merlin said that while it still anticipates its results for the first half of 2015 will be in line with its previous expectations, its results for the full year in its theme parks business are set to take a hit from the temporary closure of the park, the suspension of UK theme park marketing, and temporary ride closures.

The stock is down 6.9%, the biggest FTSE 100 faller, ahead of Pearson, which is down 2.5%.

Here is what you need to know at the London market open:
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MARKETS
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FTSE 100: down 0.6% at 6,543.73
FTSE 250: down 0.7% at 17,371.54
AIM ALL-SHARE: down 0.2% at 753.20
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Hang Seng: down 3.2% at 24,330.40
Nikkei 225: closed down 1.0% at 20,350.10
DJIA: closed down 0.9% at 17,568.53
S&P 500: closed down 1.1% at 2,079.65
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GBP: down at USD1.5496
EUR: up at USD1.1046

GOLD: up at USD1,103.08 per ounce
OIL (Brent): up at USD54.57 a barrel

(changes since end of previous GMT day)
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ECONOMICS AND GENERAL
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Monday's Key Economic Events still to come
(all times in BST)

09:00 Germany IFO Business Climate
09:00 EU M3 Money Supply and Private Loans
11:00 UK CBI Industrial Trends Survey
13:30 US Durable Goods Orders
15:30 US Dallas Fed Manufacturing Business Index
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Greece's talks with its creditors over a new bailout package will be delayed until Tuesday "for technical reasons" and are "neither political nor diplomatic" in nature, a finance ministry official said. The meetings with representatives from the European Commission, European Central Bank, International Monetary Fund - and possibly the European Stability Mechanism - were supposed to have started on Monday - already considered a delay from Friday. The finance ministry official, who spoke on condition of anonymity, says negotiations at the technical level would start on Tuesday, adding that the mission chiefs will arrive in Athens with a delay of "one or two days" due to technical reasons."
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There is no need for an interest rate hike soon in the UK, Bank of England's Chief Economist Andy Haldane told BBC Newsnight. Haldane repeated that rates could go up or down in the future and that he thought the current level was appropriate for the near term. Haldane said he saw economic "headwinds" such as demographic change, the overhang of high debt and its aftermath and the rise of short-termism that could mean economic growth in the future is weaker than in the past.
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Germany's import prices declined at a faster-than-expected pace in June, data from Destatis showed. Import prices slid 1.4% year-over-year in June, slightly more than economists' expectations for a 1.3% decrease. In May, prices had fallen 0.8%. The import price index has been falling since January 2013. Excluding energy, import prices rose 2.6% in June from the previous year, while energy prices alone tumbled by 23.9%.
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Profits earned by Chinese industrial enterprises increased in June, figures from the National Bureau of Statistics showed. Industrial profits rose 0.3% year-over-year to CNY 588.57 billion in June following a 0.6% rise in the preceding month. The agency said the slowdown in industrial profit growth for the month was impacted by a decline in industrial producer prices, higher unit costs and tough comparisons with the year-ago period, when profits surged up 17.9%.
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Turkey has called for a special session of the NATO military alliance, following recent airstrikes by Ankara on positions in Syria of the terrorist militia Islamic State and in northern Iraq of the banned Kurdish Workers Party. According to a statement by the country's foreign ministry, Turkey wants consultations with the other members of the North Atlantic Treaty Organization on further steps under Article 4 of the NATO charter which covers threats to a member state's national security. The session with the ambassadors of all 28 NATO allies is to take place on Tuesday, the alliance said.
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US President Barack Obama is expected to promote the fight against Islamist militant group Al-Shabaab in Ethiopia on Monday, the second stop of his four-day state visit to the region. "The threat in Kenya and Ethiopia is very similar," said Obama's national security adviser Ben Rhodes. Obama, who is the first sitting US president to visit Ethiopia, is also scheduled to hold a speech at the African Union. Zimbabwean President and AU chair Robert Mugabe, who is repeatedly criticized by the West for his authoritarian governance style, is not expected to attend Obama's speech.
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Yemen's Shiite Houthi rebels reject a five-day truce offered by a Saudi-led military coalition, their leader said. "The rejected truce requested by the Saudi aggression is aimed at giving a breathing space for mobilizing Daesh and al-Qaeda," Abdel-Malek al-Houthi says in a tweet, referring to Sunni radical groups. A Saudi-led military coalition had intensified its airstrikes against Iran-allied Houthi rebels in Yemen, hours before the start of the proposed five-day unilateral truce.
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BROKER RATING CHANGES
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BARCLAYS INITIATES CENTRICA WITH 'EQUAL WEIGHT' - TARGET 270 PENCE
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BARCLAYS INITIATES SSE WITH 'OVERWEIGHT' - TARGET 1,700 PENCE
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SOCGEN RAISES DRAX GROUP TO 'HOLD' ('SELL') - TARGET 270 (400) PENCE
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EXANE BNP RAISES TATE & LYLE TO 'NEUTRAL' ('UNDERPERFORM') - PRICE TARGET 525 (540) PENCE
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COMPANIES - FTSE 100
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Reckitt Benckiser said it has upgraded its like-for-like revenue growth target for the full year after its pretax profit rose in the first half thanks to a solid performance across the business. The consumer goods company said its pretax profit for the six months to the end of June was GBP921 million, up from GBP838 million a year earlier. The group said it will pay an interim dividend of 50.3 pence per share, in line with its 50% payout ratio policy. The figure is lower than last year, when it paid 60 pence per share, as this included the Indivior business. Reckitt now expects to exceed the targets it set at the start of the year and is now targeting like-for-like revenue growth of 4-5% for the full year.
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BG Group said the Brazilian competition authority has cleared the company's proposed mega-merger with Royal Dutch Shell. The authority had already given initial approval earlier in July before formally clearing the deal after an appeal period ended. The clearance is the first of five needed by the pair as BG and Shell await approval from Australia, China and the European Union. The company did not state the fifth approval that it requires. Both sets of shareholders also need to approve the deal.
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Randgold Resources said it is making progress across all of its assets in the Ivory Coast, as the company's chief executive affirmed his commitment to the country.Chief Executive Mark Bristow, speaking at the company's quarterly update for local media, said the recovery rate at the Tongon mine has been "improving" after commissioning new hydrocone crushers and said the company will increase capacity further by installing three additional crushers. "Looking beyond Tongon, we've stepped up our exploration effort in Côte d'Ivoire on the back of its positive new mining code, and the results are confirming our belief in the high potential of the country's prospectivity," he said.
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Pharmaceutical giant AstraZeneca said it has signed an agreement with Genzyme to sell Astra's Caprelsa rare disease medicine. AstraZeneca said Genzyme will pay it up to USD300 million, including a USD165 million upfront payment, to acquire the global rights to sell and develop Caprelsa. Caprelsa was granted Orphan Drug Designation by the US Food and Drug Administration in 2005 and is currently available in 28 countries for the treatment of aggressive and symptomatic medullary thyroid carcinoma, AstraZeneca said.
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Pearson confirmed on Saturday it is talks to sell its 50% stake in the Economist Group, just two days after it announced the sale of the FT Group, which includes the Financial Times, to Japanese media group Nikkei Inc for GBP844 million. Pearson made the announcement following a report by CNBC that the company was in negotiations to sell the stake, which was not included in the deal to sell the FT Group, to other shareholders in the Economist, citing people familiar with the situation. The report suggested the stake would be worth about GBP400 million.
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COMPANIES - FTSE 250
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The takeover battle for online gaming company Bwin.Party Digital Entertainment took a further twist after GVC Holdings made an increased takeover bid for the company, having previously seen its advanced spurned in favour of a rival offer from 888 Holdings. Earlier this month, Bwin.Party turned down GVC's first offer in favour of the 888 bid, despite it valuing the company for less.  GVC originally offered 100 pence per share for Bwin.Party, but said on Monday it has now raised this to 122.5 pence per share, 25 pence of which would be paid in cash, with the rest to be paid in GVC shares. The company added it would finance the deal with a EUR400 million senior secured loan provided by affiliates of US private equity group Cerberus Capital Management. GVC also intends to raise GBP150 million through an equity placing.
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Informa, a publishing and business intelligence company, has sold its Datamonitor Financial, Datamonitor Consumer, MarketLine and Verdict businesses to media company Progressive Digital Media Group. In a statement on Monday, Progressive Digital Media said it acquired the businesses for GBP25.0 million in cash, making the purchases under its strategy of expanding its premium subscription based services, and moving to strengthen its consumer activities.
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Acacia Mining reported a large fall in profit in the first half of 2015 due to higher costs and lower gold prices. The miner reported a pretax profit of USD25.0 million in the first half of 2015, dramatically falling from the USD62.2 million a year earlier despite revenue experiencing a small lift to USD446.8 million from USD445.5 million in the period. Despite the large fall in profit, Acacia retained its interim dividend of 1.4 cents per share, which is in line with the dividend paid for 2014.
Gold production in the first half totalled 367,301 ounces, 6% higher than the 346,581 ounces produced a year earlier. The miner retained its full year guidance to produce 750,000 to 800,000 ounces of gold.
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Food producer Cranswick said its first-quarter trading was in line with its expectations, with a rise in revenue and higher underlying sales year-on-year. The company, which makes food products including sausages and pies, said its revenue in the first quarter to the end of June was up 8% year-on-year on the back of robust volume growth across most product categories. Underlying sales in the quarter were up 4%, also on the back of higher volumes, while export sales to Far Eastern markets continued to be positive, with volumes up 14% year-on-year.
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Hiscox said the move to grow its retail specialty businesses has been of great benefit, with the specialty insurer expecting the tough environment for big-ticket insurance and reinsurance to continue into 2016, as its results showed an increase in pretax profit for the first half of its financial year. The specialty insurer said it made a GBP135.1 million pretax profit in the six months ended June 30, compared with GBP124.6 million in the corresponding period of the prior year. Gross premiums written increased to GBP1.10 billion in the first half, compared with GBP978.9 million in the same part of the prior year.
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Senior said it saw diverging currency translation impacts in the first half, as its pretax profit rise was wiped out by an adverse effect but its revenue was helped by favourable currency movements.
The manufacturing company, which makes components and systems for the aerospace, defence and energy markets, said its pretax profit for the first half was GBP45 million, a slight reduction on the GBP45.1 million it posted a year earlier. In constant currencies, its pretax profit increased by 5%. Senior said it will pay an interim dividend of 1.84 pence per share, up 10% year-on-year.
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COMPANIES - INTERNATIONAL
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Swiss financial services giant UBS said its second-quarter attributable profit surged to CHF1.209 billion from CHF792 million in the prior year. Total operating income improved 9% to CHF7.818 billion from CHF7.147 billion.
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Dutch consumer electronics giant Koninklijke Philips Electronics reported its second-quarter net income attributable to shareholders increased to EUR272 million from last year's EUR242 million. Net income rose to EUR274 million from the previous year's EUR243 million. The company reported comparable sales growth of 3% particularly driven by improvements in North America, Central & Eastern Europe and India.
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Israeli generic drug maker Teva Pharmaceutical Industries is in talks to acquire Botox maker Allergan's generic drug business for about USD45 billion, the Wall Street Journal reported, citing people familiar with the matter. A deal could reportedly be announced as early as Monday. According to the WSJ report, the Allergan unit would be spun off and combined with Teva, the world's biggest seller of generic medicines with a market value of USD52 billion. Allergan's drug distribution business, which generates USD462 million in quarterly net revenue, might also be part of the deal. Teva has been seeking to acquire Mylan for USD40 billion but has been unsuccessful so far, even as Mylan pursues Ireland-based peer Perrigo.
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Allergan said it agreed to acquire Naurex, a clinical-stage biopharmaceutical company developing transformative therapies for challenging disorders of the central nervous system, for a USD560 million upfront payment net of cash acquired.
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German stock exchange operator Deutsche Boerse said it has agreed to buy Germany-based foreign exchange trading platform 360T Beteiligungs GmbH for EUR725 million. Deutsche Boerse said it signed a definitive agreement regarding the acquisition with shareholders of 360T, including US-based private equity firm Summit Partners.
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Carmaker Fiat Chrysler will pay a USD105 million penalty for violating government requirements about repairing vehicles with safety defects and will buy back some cars from owners, US regulators said. Half a million vehicles with defective suspension parts that could cause drivers to lose control will be eligible for the buy-back programme and owners of more than a million Jeeps prone to deadly fires will be able to trade in their vehicles above market value. Fiat Chrysler will submit to three years of strict oversight, including an independent monitor to track safety recalls.
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Monday's Scheduled AGMs/EGMs

Westside Investments
Clear Leisure
Cranswick
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By Tom Waite; thomaslwaite@alliancenews.com; @thomaslwaite

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