30th Oct 2015 08:26
LONDON (Alliance News) - UK company news provided the market focus early Friday, at the end of a week dominated by Fed watching.
Amid a mostly flat overall market, airline IAG led FTSE 100 decliners, down 4.7%, despite providing a strong third-quarter trading update and raising its guidance for 2015.
State-controlled bank RBS was just behind, down 1.0%, even as it reported improved third-quarter net profit amid a big gain on the loss of control of Citizens, the US retail bank it is selling.
Here is what you need to know at the London market open:
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MARKETS
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FTSE 100: up 0.1% at 6,398.73
FTSE 250: flat at 17,117.35
AIM ALL-SHARE: up 0.1% at 741.55
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Hang Seng: closed down 0.8% at 22,640.04
Nikkei 225: closed up 0.8% at 19,083.10
DJIA: closed up 0.1% at 17,755.80
S&P 500: closed flat at 2,089.41
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GBP: up at USD1.5334 (USD1.5296)
EUR: up at USD1.0993 (USD1.0965)
GOLD: flat at USD1,149.05 per ounce (USD1,149.40)
OIL (Brent): down at USD48.30 a barrel (USD49.19)
(changes since previous London equities close)
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ECONOMICS AND GENERAL
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Friday's Key Economic Events still to come
(all times in GMT)
09:00 Italy Unemployment
09:00 Italy Consumer Price Index
10:00 EU Unemployment
10:00 EU Consumer Price Index
11:00 Italy Producer Price Index
12:30 US Personal Income and Spending
12:30 US Employment cost index
12:30 Canada Gross Domestic Product (MoM)
13:45 US Chicago Purchasing Managers' Index
14:00 US FOMC Member Williams speech
14:00 US Reuters/Michigan Consumer Sentiment Index
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Consumer confidence in the UK slid to a four-month low in October, the latest survey from GfK showed on Friday with an index score of +2. That was shy of expectations for +4 and down from +3 in September. A sharp decline in construction is seen as the main factor weighing on confidence. "Good news on the domestic front - with households lifted by wage growth, low interest rates and near-zero inflation - is being tempered by concerns about our ability to shrug off the global downturn," GfK analyst Joe Staton said.
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The UK government tabled proposals for a reform of the beer tie, part of plans to ensure that tied pub tenants are no worse off in future than those free of the tie. Under the beer tie, tenant pub landlords must buy their beer from the company that owns the pub rather than on the open market. Under the new proposals, tenants will be able to request rent assessments every five years, whenever any significant change is seen in the price they are charged for drinks or when there is a change in their trading conditions. They will then be able to renegotiate their rent or switch to a "market rent only" system under which they would be allowed to buy beer from any supplier.
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Following the US Fed keeping monetary policy on hold on Wednesday, the Bank of Japan kept its massive stimulus unchanged Friday, as expected by economists. The post-meeting policy statement showed that the Monetary Policy Board of the BoJ governed by Haruhiko Kuroda decided by an 8-1 majority vote to maintain its target of raising the monetary base at an annual pace of about JPY80 trillion. The bank also maintained its asset purchase program unchanged.
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US Secretary of State John Kerry arrived Thursday in Vienna ahead of talks that are aimed at ending the Syrian war and involve 20 countries, including bitter rivals and close allies of President Bashar al-Assad. Kerry - who said that finding a solution in Syria is like charting a "course out of hell" but also that Friday's negotiations present "the most promising opportunity for a political opening" - will meet Russian Foreign Minister Sergei Lavrov later Thursday.
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BROKER RATING CHANGES
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JPMORGAN RAISES MEGGITT TO 'NEUTRAL' ('UNDERWEIGHT') - TARGET 380 (450) PENCE
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TRADERS: NOMURA RAISES CENTAMIN TO 'NEUTRAL' ('REDUCE')
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COMPANIES - FTSE 100
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International Consolidated Airlines Group said its operating profit surged in the third quarter and kept it tracking well ahead of 2014, as passenger traffic and load factor also both improved, prompting the carrier to upgrade its profit guidance for 2015. The British Airways and Iberia owner said its operating profit in the third quarter to the end of September was EUR1.25 billion, up from EUR900.0 million a year earlier and still up to EUR1.21 billion when excluding the contribution from Aer Lingus Group, the Irish flag carrier IAG acquired this year. The strong results in the quarter meant IAG has upgraded its operating profit guidance for the full year to EUR2.25 billion to EUR2.30 billion, a firmer target than the previous guidance for profit to be in excess of EUR2.20 billion. The new guidance also excludes any contribution from Aer Lingus.
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Royal Bank of Scotland Group reported improved third-quarter net profit, as it booked a big gain on the loss of control of Citizens, the US retail bank it is selling, and warned that the costs of restructuring and addressing past conduct and litigation are not about to go away. The bank said it made a GBP952 million net profit in the three months to September 30, compared with GBP896 million in the corresponding quarter the prior year. That included a GBP1.15 billion gain on the loss of control of Citizens, and the bank also confirmed it is set to sell its remaining 20.9% stake.
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Earlier, Citizens Financial Group said RBS has launched a registered underwritten public offering to sell all of its remaining 110.5 million shares in the US retail bank. RBS had previously set out plans to divest the rest of its stake by the end of 2015.
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BG Group reported a decline in earnings during the third quarter of 2015 that was in line with expectations, and the company raised its full-year production guidance after reporting a large rise in production during the period. The oil and gas producer operating in over 20 countries, and the subject of a takeover offer by Royal Dutch Shell, reported earnings before interest, tax, depreciation and amortisation of USD1.24 billion in the third quarter of 2015, down from USD1.98 billion a year earlier but ahead of the analyst consensus which estimated Ebitda of USD1.15 billion. Importantly, the company upgraded its full-year production guidance to between 680,000 and 700,000 barrels of oil equivalent per day after third quarter production rose 26% year-on-year to 716,000 barrels per day.
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COMPANIES - FTSE 250
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Elementis said its earnings for the full year should be in line with expectations as the trends experienced in the first half of the year have continued, despite sales being down compared to last year. David Dutro, chief executive of the global chemical security company, said cashflow has continued to perform well which will allow it to "reward our shareholders with attractive returns via our progressive dividend policy," including its special dividend programme.
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Moneysupermarket.com Group said it is confident of meeting its expectations for the full year despite an anticipated slowdown in revenue in the fourth quarter. The price comparison company said group revenue increased 14% year-on-year to GBP76.2 million in the three months to September 30. Moneysupermarket also said it is to pay 76% of the GBP27.0 million maximum possible in deferred amount and employee bonuses for MoneySavingExpert.com, which was acquired in September 2012. The company said that GBP19.2 million of the GBP20.6 million payment is due to Martin Lewis, the founder of the company.
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Pets at Home Group said it is trading broadly in line with market expectations for the full year, as revenue in the first half rose but it saw weaker-than-expected sales in some parts of the business.
The pet products and services retailer said like-for-like sales grew 1.8% in the 28 weeks to October 8, with continued strength in its advanced nutrition, VIP Club, services and omnichannel sales, but with some weakness emerging in health and hygiene products. Merchandise like-for-like revenue increased 1.0%, while services like-for-like revenue was up 11%.
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Motor retailer and aftersales services provider Lookers said it saw a strong performance in the third quarter across its whole business and said its results should be in line with market expectations. The company said its trading performance in the quarter to the end of September was very strong, with a record monthly result for the business in September despite coming against a strong comparable period the year before.
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Vectura Group said it has secured two milestone payments following an approval of an inhaler in the US and after hitting a development milestone in Europe. Vectura said the US Food and Drug Administration has approved the dual combination Utibron Neohaler and Seebri Neohaler products for the long-term treatment of patients with chronic obstructive pulmonary disease. The approval has triggered a USD22.5 million milestone payment to Vectura from Swiss pharmaceuticals giant Novartis, Vectura's partner on the product. Vectura also has been paid a USD750,000 cash milestone after a further development milestone was hit for its VR632 therapy in the European Union. VR632 is an asthma and COPD inhaled treatment therapy which users Vectura's dry powder inhaler and formulation technology. That milestone payment hwas made by Sandoz, a unit of Novartis.
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COMPANIES - LONDON MAIN MARKET AND AIM
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Energy consultancy RPS Group said it has spent a total of GBP24.0 million on acquisitions in the US and Australia in a bid to further reduce its reliance on sales to the weakened oil and gas industry. RPS said it will pay USD13.5 million for Iris Environmental, a California-based environmental services consultancy. The company primarily focuses on environmental risk management services for clients in California, particularly Silicon Valley technology companies. RPS also has struck a AUD32.4 million deal to acquire Everything Infrastructure Group, a Sydney-based infrastructure development, delivery and management consultancy.
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COMPANIES - INTERNATIONAL
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Anheuser-Busch InBev, the Belgian-American brewer trying to buy London-listed SABMiller, reported that its third-quarter normalized profit attributable to equity holders decreased to USD1.67 billion from USD2.31 billion last year, with organic EBITDA growth being more than offset by unfavourable currency translation, and higher net finance results.
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French lender BNP Paribas reported its third-quarter net income attributable to equity holders climbed 14.5% to EUR1.83 billion from last year's EUR1.60 billion. Revenue totalled EUR10.345 billion, up 8.5% from EUR9.54 billion a year ago.
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French aerospace giant Airbus Group reported strong growth in profit for the third quarter, supported by higher revenues. The company backed its full-year forecast and announced a EUR1 billion share buyback. Net income climbed to EUR376 million from EUR264 million. Revenue grew 6% to EUR14.072 billion from EUR13.297 billion in the prior year. Looking ahead, Airbus Group still targets its earnings per share and dividend per share to increase further in 2015. Airbus deliveries should be slightly higher than in 2014, and the commercial aircraft order book is again expected to grow.
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Macquarie Group, a provider of banking, financial, advisory, investment, and funds management services, announced first half net profit of AUD1.070 billion, up 58% from last year. Operating income was AUD5.3 billion, up 24% on previous year. The company specified that improved result largely driven by performance fees, foreign exchange and improved trading conditions. Assets under management were AUD504 billion at 30 September 2015, up 4% on 31 March 2015.
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Payments processor Visa is reportedly close to buy its European counterpart Visa Europe for USD22 billion. According to a Wall Street Journal report, Foster City, California-based Visa is in advanced talks to buy Visa Europe, citing people familiar with the matter. The deal would combine Visa's global operations under one roof after the companies separated eight years ago. The report suggests that Visa might announce the deal as soon as Monday when it releases its quarterly results.
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Global coffee shop giant Starbucks posted record fourth-quarter earnings, but investors lost their appetite for its stock after a lukewarm outlook for the upcoming holiday season. The company's net earnings for the three months to the end of September rose 11% year-on-year to USD653 million dollars. Worldwide retail sales grew 8%, beating the company's own expectations.
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Friday's Scheduled AGMs/EGMs
Ross Group
Sacoven
Ashley House
Sylvania Platinum
Environmental Recycling Tech
Blenheim Natural Resources
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By Tom Waite; [email protected]; @thomaslwaite
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