20th Oct 2015 07:16
LONDON (Alliance News) - Shares opened flat in London Tuesday with little in the way of economic data to drive trading but plenty of UK and international company news.
Hoteliers Whitbread and IHG led FTSE 100 gainers, up 2.5% and 2.7%, respectively.
Whitbread, the owner of hotel and coffee chains Premier Inn and Costa Coffee, raised its interim dividend as it said pretax profit increased in the first half on higher sales and it remains on track to meet its growth plans.
IHG, which owns brands including Holiday Inn, Crowne Plaza and InterContinental Hotels, reported a drop in revenue per available room in the third quarter of 2015 due to the strengthening of the dollar, but said RevPAR grew in three of its four operating regions on a constant exchange rate basis.
Here is what you need to know at the London market open:
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MARKETS
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FTSE 100: flat at 6,352.39
FTSE 250: up 0.2% at 16,945.88
AIM ALL-SHARE: flat at 743.19
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Hang Seng: down 0.6% at 22,941.96
Nikkei 225: closed up 0.4% at 18,207.15
DJIA: closed up 0.1% at 17,230.54
S&P 500: closed flat at 2,033.66
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GBP: flat at USD1.5486 (USD1.5489)
EUR: up at USD1.1333 (USD1.1322)
GOLD: up at USD1,172.91 per ounce (USD1,170.76)
OIL (Brent): down slightly at USD48.74 a barrel (USD48.83)
(changes since previous London equities close)
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ECONOMICS AND GENERAL
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Tuesday's Key Economic Events still to come
(all times in BST)
09:00 EU Current Account
13:30 US Housing Starts and Building Permits
13:30 Canada Wholesale Sales
13:55 US Redbook index
14:15 US FOMC Member Powell speech
14:30 US Fed's William Dudley speech
16:00 US Fed Chair Yellen speech
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Germany's producer prices declined at the fastest pace in seven months and the fall was much worse than the decrease economists had predicted, preliminary data from Destatis revealed. The industrial producer price index dropped 2.1% year-on-year following a 1.7% slump in August. Economists had expected a 1.8% fall.
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Canada's Liberal Party beat the incumbent Conservatives of Stephen Harper, election results showed. "The Canadians have chosen change - real change," Liberal leader Justin Trudeau, the eldest son of former Liberal prime minister Pierre Trudeau, told his supporters at a rally broadcast live by several television channels. The Liberals had 173 confirmed seats, and were leading in another 11, giving them a likely total of 184, comfortably above the 170 needed for a majority, CBC reported online.
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Japan will remove tariffs on about 30% of the agricultural products it earlier defended as sensitive, under a recently concluded Pacific trade pact, local media reported. During negotiations, Japan sought to maintain its import tariffs on 586 goods in five key farm categories - rice, wheat, beef and pork, dairy products and sugar. Now 174 of those will be lifted under the Trans Pacific Partnership agreement, Kyodo News agency reported, citing unnamed government sources.
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Chinese hacking of US companies that appears to be aimed at stealing intellectual property has continued despite an agreement reached last month by US President Barack Obama and Chinese President Xi Jinping that aimed to halt such attacks. Online security firm Crowdstrike said that its systems had detected prevented intrusions into companies committed by "actors we have affiliated with the Chinese government."
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Syrian government forces claimed gains against Islamic State as they sought to relieve a military airbase besieged by the extremist group east of Aleppo. A Syrian military source, who declined to be named, said the army had captured three villages as it advanced towards Kweires airbase, where hundreds of troops are thought to be besieged.
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BROKER RATING CHANGES
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TRADERS: MACQUARIE INITIATES OCADO WITH 'OUTPERFORM' - TARGET 410 PENCE
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BERENBERG RAISES AVEVA GROUP TO 'BUY' ('HOLD') - TARGET 2,450 (1,977) PENCE
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TRADERS: DEUTSCHE BANK RAISES RANDGOLD RESOURCES TO 'BUY' ('HOLD')
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COMPANIES - FTSE 100
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Whitbread said its pretax profit increased in the first half on higher sales and said it will raise its interim dividend, as it remains on track to meet its growth plans. The company said its pretax profit for the six months to August 27 was GBP254.9 million, up from GBP241.8 million a year earlier. The latest half was hit by the group booking GBP25.2 million in exceptional charges on onerous leases for sold business and accelerated amortisation costs on its IT systems. Total revenue was up to GBP1.44 billion in the half-year from GBP1.29 billion a year ago, with like-for-like sales growth across the group of 3.6%.
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InterContinental Hotels Group reported a drop in revenue per available room in the third quarter of 2015 due to the strengthening of the dollar, but said RevPAR grew in three of its four operating regions on a constant exchange rate basis. The hotel operator said global RevPAR in the third quarter fell 0.4% on the same period the year before due to the strengthening of the dollar, although it grew 4.8% at constant exchange rates, led by a 3.6% rise in room rates.
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COMPANIES - FTSE 250
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Al Noor Hospitals Group confirmed it has received a "highly preliminary" indication of interest from Abu Dhabi-based VPS Healthcare Group, following its proposed reverse takeover of South Africa's Mediclinic International Ltd last week. This brings the number of potential suitors for the private hospital group to three, having also received a competing approach from London-listed peer NMC Health.
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Go-Ahead Group said its overall trading in the first quarter has been satisfactory and affirmed its full-year expectations for its bus and rail operations. The transport operator said trading in its UK regional bus business in the first quarter, covering June 28 to October 19, was broadly in line with the second half of its 2015 financial year, with revenue up 1.0% but passenger journeys down 1.5%. London bus revenue rose 2.0% in the quarter, though the group said its quality incentive contract continues to be hit by congestion in the capital from roadworks. The rail business performed well again, however, with passenger revenue from its Southeastern service up 6.0%, London Midland revenue up 11.0% and GTR revenue up 4.5%.
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Publishing and business information company Informa reaffirmed its full-year expectations on a "consistent performance" in its third quarter, taking its revenue growth for the first nine months of 2015 to 6.9%. Informa said that, on an organic basis, revenue growth for the nine months to end-September was around 2%.
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Electra Private Equity said it and fellow private equity firm Exponent Private Equity have proposed the acquisition of Photobox Group, the personalised gifts and products retailer. Photobox owns the Moonpig brand, along with a series of other companies which produce personalised products and gifts. The acquisition, which will be subject to consultation with employee representatives and competition clearance, will see Electra invest GBP89.0 million. The pair intend to back the growth of Photobox's business via mobile channels, product launches and international expansion.
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Polymetal International said revenue was down in the first nine months of 2015, as increased gold and silver sales failed to offset lower world metal prices, though the company reaffirmed it is on track to hits its full-year production guidance. The Russian gold miner generated USD402.0 million in revenue in the third quarter of 2015, down 11% year-on-year from USD451.0 million. That revenue came from the sale of 261,000 ounces of gold in the third quarter of 2015, up 3% from 254,000 ounces a year earlier.
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John Wood Group said its subsidiary has won a USD31.0 million contract to deliver operations management services to Carbon Creek Energy's coal-bed methane field in the Powder River basin in Wymoning in the US. Wood Group PSN, which services brownfield operations, has won the contract on the field, which is "the largest of its kind in the region" with over 7,000 wells producing 385.0 million cubic feet of gas per day.
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Entertainment One said it received take-up of 95.87% for its recent rights issue of shares to part-fund its acquisition of Peppa Pig creator Astley Baker Davies The discounted rights issue was announced earlier this month to raise GBP193.6 million through the issue of around 131.5 million new shares at 153.0 pence. Entertainment One said it had received valid acceptances in respect of 126.05 million new shares. Underwriters JP Morgan Cazenove and Credit Suisse will "endeavour" to find subscribers for the remaining 5.43 million not taken up under the rights issue, the company said.
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COMPANIES - LONDON MAIN MARKET AND AIM
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ASOS reported growth in profit in its recently-ended financial year as sales rose strongly and it invested in its warehouses and technology systems. The online fashion retailer reported a 1% rise in pretax profit in the year ended August 31 to GBP47.5 million from GBP46.9 million the year before, as revenue rose 18% to GBP1.15 billion from GBP975.5 million. By region, UK retail sales were up 27% and international retail sales increased 11%.
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International Greetings said trading in the first half of its financial year was in line with expectations and that it will meet expectations for the full year. The greetings card and gift packaging manufacturer said the sales it has made in the six months to September 30, together with a solid order book, mean it will meet its revenue expectations for the full year.
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Household and personal care products company McBride said trading in the first quarter of its financial year was in line with its expectations. The company said it made a solid start to the year, with constant currency revenue in the three months to the end of September slightly ahead year-on-year.
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Convenience store operator McColl's Retail Group said it has decided to sell around 100 newsagents following a review of its store portfolio. The company said the stores are expected to be sold for no less than their asset value, and the closure of the stores is anticipated to be earnings neutral in the 2016 financial year. McColl's said it will continue to run its profitable newsagents and will convert these into convenience stores where appropriate.
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COMPANIES - INTERNATIONAL
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Deutsche Bank mistakenly transferred about USD6 billion to a US hedge fund client in June and recovered the money a day later, Financial Times reported. The USD6 billion trade was processed by a junior member of the bank's forex sales team in June while his chief was on holiday. Instead of processing a net value, the person processed a gross figure. That meant the trade had "too many zeroes", the report said.
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International Business Machines reported an increase in profit for the third quarter profit, reflecting the absence of a hefty charges from last year related to IBM's former chip operations. However, the company's revenue for the third quarter fell 14% from last year, hurt largely by sharp drop in hardware sales and strong US dollar. The company's quarterly earnings came in above analysts' expectations, but its revenues fell short of expectations, sending its shares down a near 5% in the extended trading hours.
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German business software maker SAP reported that its profit attributable to owners of parent for the third-quarter 2015 increased to EUR898 million from last year's EUR880 million, with earnings per share improving to EUR0.75 from EUR0.73 in the previous year. Total revenue grew to EUR4.985 billion from EUR4.254 billion in the prior year.
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Flash memory card maker SanDisk is in advanced talks to sell itself to hard disk drive maker Western Digital and a deal could be reached as soon as this week, Bloomberg reported Monday, citing people with knowledge of the matter. According to the Bloomberg report, SanDisk was earlier in talks with both Western Digital and Micron Technology about a deal.
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e-commerce giant Amazon.com said it is creating 100,000 seasonal positions across its US network of fulfillment and sortation centers this holiday season to meet the increase in customer demand. In the months leading up to this holiday season, Amazon has also hired tens of thousands of regular, full-time employees. Amazon has more than 90,000 full-time employees across its more than 50 fulfillment centers and 20 sortation centers in the US In preparation for the 2015 holiday season, Amazon has hired over 25,000 full-time employees since August.
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Dozens of US companies joined a White House initiative to push global action against climate change and take steps to reduce their own environmental impact. More than five dozen companies signed onto the American Business Act on Climate Pledge, urging governments to reach an agreement on climate change at a summit in December in Paris and agreeing to reduce their own emissions and water usage and increase use of renewable energy. Pledges include: a 30% reduction in greenhouse gas emissions by consumer products conglomerate Procter & Gamble by 2020; an 80% decrease in emissions by 2050 by household products manufacturer Johnson and Johnson; support for sustainable beef and palm oil production by global fast-food giant McDonald's; and social media website Facebook increasing its use of renewable energy.
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Tuesday's Scheduled AGMs/EGMs
Scancell
Mcbride
Frontier Developments
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By Tom Waite; [email protected]; @thomaslwaite
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