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UK TOP NEWS SUMMARY: Oil And Gold Surge As US Ratchets Up Iran Tension

Fri, 03rd Jan 2020 11:44

(Alliance News) - The following is a summary of top news stories Friday.

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COMPANIES

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Next upped its annual profit guidance and said it expects further improvement in financial 2021 after fourth-quarter performance came in ahead of internal forecasts. The FTSE 100-listed home and fashion retailer reported that total full price sales - which include interest income - grew by 5.2% on a year before in the period from October 27 to December 28. Next said the result was 1.1% ahead of its internal forecasts. "We believe our sales performance in the period was helped by a much colder November than last year and improved stock availability in both our Retail stores and Online," Next said in its statement. As a result, Next increased its pretax profit guidance for the financial year to the end of January by GBP2 million to GBP727 million, which will represent a 0.6% growth on last year. Next said it expects full price sales growth of 3.9% in financial 2020, which is 0.3 percentage point ahead of its guidance given in October.

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British American Tobacco welcomed a move by US regulators to ban a number of e-cigarette products. The US Food & Drug Administration on Thursday said cartridge-based e-cigarettes in flavours other than tobacco or menthol will become illegal unless specifically authorised by the government. However, in September the White House had promised a full ban, but this was scuppered by industry pressure. The change will take effect in early February, outlawing cartridges with fruit, mint and candy flavours, which are particularly popular with young people. The ban will exempt large, tank-based rechargeable vaping devices, however, which are primarily sold in vape shops that cater to adults. BAT said the FDA move shows vaping remains a credible alternative to smoking, and welcomed the clarity the new ruling gives. BAT has already submitted one brand application for vaping products, and has several more lined up before the deadline of May this year.

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Ryanair Holdings posted a strong increase in traffic for December, including notable growth from its Lauda unit. Irish budget airline's total traffic for the final month of 2019 was 11.2 million passengers, which represented an 8.7% increase from the previous year's figure of 10.3 million. This included a 67% rise in Lauda passengers to 500,000 from 300,000. Ryanair reported its group load factor for December as being 95%, flat from the same month of 2018 but below the rolling annual figure of 96%.

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Bovis Homes Group said it has completed its acquisition of two Galliford Try businesses and has applied to change its name to Vistry Group. Back in November, Galliford agreed to sell its Linden Homes and Partnerships & Regeneration units to Bovis in a deal worth a combined GBP1.14 billion. This includes Bovis's issue of 63.7 million new shares to Galliford plus GBP300 million in cash and the assumption of Galliford's GBP100 million 10-year private debt placement. Further to the November announcement that Bovis would be changing its name as part of its integration with the acquired businesses, Bovis said it has applied to change its name to Vistry Group - both for its housebuilding and its partnerships businesses. The enlarged business will operate with both the Linden Homes and Bovis Homes brands. Bovis Chief Executive Greg Fitzgerald said: "The combination of these businesses with Bovis Homes creates a top five housebuilder in the UK with the capacity to deliver over 12,000 homes per year in the medium term."

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Marks & Spencer Group said it has appointed David Surdeau as interim chief financial officer to replace Humphrey Singer, whose departure was announced in mid-September. Later, in October, M&S had confirmed that Singer would leave at the end of 2019. M&S said Surdeau will begin his new role on Tuesday next week and will report to Chief Executive Officer Steve Rowe. Surdeau was group planning, treasury & tax director of Tesco for over 16 years.

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MARKETS

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Stocks were lower in London in a quiet day for UK company news, as rising tensions in the Middle East dented the risk appetite of investors but gold and oil prices a boost. Wall Street closed at record highs on Thursday but is set to give up these gains on Friday, with the Dow Jones Industrial Average called 1.3% lower, S&P 500 seen down 1.4% and the Nasdaq Composite down 1.7%.

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FTSE 100: down 0.5% at 7,566.14

FTSE 250: down 0.9% at 21,901.37

AIM ALL-SHARE: down 0.2% at 961.36

GBP: lower at USD1.3069 (USD1.3155)

EUR: soft at USD1.1128 (USD1.1185)

GOLD: higher at USD1,548.72 per ounce (USD1,527.98)

OIL (Brent): higher at USD68.98 a barrel (USD65.76)

(changes since previous London equities close)

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ECONOMICS AND GENERAL

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Iran's Supreme Leader Ayatollah Ali Khamenei has threatened the US with "harsh retaliation" after the killing of influential Iranian General Qassem Soleimani, Iranian state television reported. Soleimani's path would continue without him, but the perpetrators would face severe revenge, Khamenei said. Soleimani's death would not affect what he termed Islam's final victory over "the imperialists," Khamenei said in remarks carried on state television. Khamenei also declared three days of national mourning. Tens of thousands of people took to the streets of Tehran to protest against American "crimes", an AFP correspondent reported. The Defense Department in Washington confirmed that Soleimani was killed in a drone attack near Baghdad airport in the early hours of Friday, in what the US described as a "defensive action". Soleimani was killed along with with the deputy head of Iraq's powerful Shiite Hashd Shaabi militia, Abu Mahdi al-Mohandes, the group said. Part of the 750 forces from the US 82nd Airborne division dispatched to the region a few days ago had already arrived in Baghdad, a US defense official told AFP.

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UK construction output reduced sharply in December, the latest IHS Markit-Chartered Institute of Procurement & Supply purchasing managers' index showed, amid political uncertainty and subdued client demand ahead of the general election held last month. At 44.4 in December - down from 45.3 in November - the headline seasonally adjusted IHS Markit/CIPS UK construction total activity index was below the 50.0 no-change mark for the eighth consecutive month. This period of falling business activity across the construction sector is the longest recorded by IHS Markit for almost a decade, it said. "Brexit uncertainty and spending delays ahead of the general election were once again the most commonly cited factors highlighted by firms experiencing a drop in construction activity," said IHS Markit Economics Associate Director Tim Moore.

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UK shop prices continued to decline in December as discounts deepened and began earlier amid retailers' efforts to keep customers shopping, the British Retail Consortium-Nielsen Shop Price Index showed. The BRC-Nielsen Index, covering the first week of December, showed annual shop prices were flat in December compared with November. On a year-on-year basis, prices were down 0.4% in December. "Shop prices continued to fall in December as receding inflationary pressures, weak consumer demand and intense competition combined to keep price increases at bay. 2019 has been a particularly challenging year, with historically weak sales growth," said BRC Chief Executive Helen Dickinson. Looking ahead, BRC's Dickinson said future upward pressures on shop prices are expected amid movements in global food prices, but the highest risk to prices remains the outcome of Brexit negotiations.

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House price growth in the UK decelerated in December, Nationwide reported. House prices in December grew 0.1% on November, after November had risen 0.5% on October. On an annual basis however, house prices increased by 1.4%, accelerating from the 0.8% year-on-year rise recorded in November. "Annual UK house price growth edged up as 2019 drew to a close, with prices 1.4% higher than December 2018, the first time it been above 1% for 12 months," said Nationwide Chief Economist Robert Gardner. Looking at house prices regionally, London was the weakest performing region. Prices fell 1.8% in the last quarter of 2019 from a year before, with the outer south-east falling 1.0%.

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