19th May 2014 10:29
LONDON (Alliance News) - The following is a summary of top news stories Monday.
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COMPANIES
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AstraZeneca PLC rejected a final GBP69 billion takeover proposal from Pfizer Inc, potentially ending the US company's interest in its British rival for the time being after Pfizer pledged not to go direct to AstraZeneca's shareholders with a hostile offer. Pfizer raised its approach to GBP55.00 a share, from GBP50.00 previously, and also sweetened the proposed cash and shares deal with a higher cash component. However, AstraZeneca said it still felt that undervalued the company. It left the door ajar for an improved bid from the US drugs giant, saying that it might be prepared to recommend a bid that was more than 10% above the new proposal.
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Engineering support services company Babcock International Group PLC reported an increase in profit and revenue for the full year, reflecting a strong performance across the business. The FTSE 100 company - which specialises in managing complex assets and infrastructure - posted pretax profit of GBP218.8 million for the year ended March 31. Babcock said its Marine and Technology division saw revenue growth of 15% and organic growth of 13% before acquisitions and at constant exchange rates. Organic growth was driven by increased volumes in the UK due to the Queen Elizabeth aircraft carrier programme, the refit of the HMS Ocean assault ship, and increased work in Canada on a submarine programme, it said.
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Dixons Retail PLC, the electronics retailer which agreed to merge with mobile phone retailer Carphone Warehouse Group PLC last week, said it is selling off its ElectroWorld business in central Europe. The group said it is selling the loss-making business to NAY AS, an electrical specialist retailer which operates in the Slovak market, and said it expects to receive a small deferred cash consideration for Electroworld, which operates 26 retail stores across Czech Republic and Slovakia. The announcement comes just a few days after its new partner Carphone Warehouse said that it has entered exclusive talks to sell its joint venture with Virgin Media Inc, Virgin Mobile France, to Numericable Group SA for EUR325 million.
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Mitie Group PLC said its full-year pretax profit increased by 21% due to a "steady flow" of contracts within its key facilities-management business, but it also incurred significant losses from its ongoing exit from its mechanical and electrical engineering construction business and from the design-and-build element of asset management. In a statement, the outsourcing and energy services company said it made a GBP68.4 million pretax profit in the year ended March 31, compared with GBP56.3 million a year earlier. Revenue increased to GBP2.22 billion from GBP2.12 billion, while administrative expenses narrowed to GBP243.2 million from GBP249.6 million. Mitie said it will focus on its core facilities management business and continuing to grow and invest in "adjacent" markets, such as healthcare.
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Alent PLC said its outlook for 2014 is unchanged after trading so far was in line with its expectations, with a slight increase in demand in its main principle electronics and automotive end-markets. In a statement, the advanced surface treatment plating chemicals and electronics assembly materials company said its net sales value was GBP98.9 million in the first quarter of the year, down from GBP101.8 million in the first quarter of 2013. It said net sales value would have been up 6.5% at constant exchange rates. It said higher demand was being driven by higher car production, while improving consumer confidence around the world was helping electronics demand.
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Micro Focus International PLC said it expects to report revenue growth at constant currencies at the upper end of its 3% to 6% guidance range for its last financial year, while its adjusted earnings before interest, tax, depreciation and amortisation will be in line with market expectations. The software company, which expects to report full results for the fiscal year to April 30 on June 19, said net debt stood at USD261.0 million at the end of that year, which it said demonstrated further good cash generation.
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Irish low-cost airline Ryanair Holdings PLC posted 8% lower full-year net profit of EUR523 million, versus last year's EUR569 million, chiefly due to a 4% decline in fares, weaker sterling, and higher fuel costs. The firm said it reacted quickly to this weaker environment last September by lowering fares and improving its customer experience, that caused traffic in the second half to grow 4% as load factors improved by 1%. Revenue amounted to EUR5.04 billion, a 3% increase from EUR4.9 billion reported a year back. Ancillary revenues advanced by 17%, much faster than traffic growth, and now accounts for 25% of total revenues. For the year, traffic grew by 3% year-on-year to 81.7 million passengers, from 79.3 million passengers. Looking ahead to fiscal 2015, the company expects traffic to increase 4% to over 84.6 million as load factors increase by 2% to 85% and it adds some limited new route and capacity growth.
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Royal Bank of Scotland Group PLC Sunday said it is winding down its interest-rate trading operations due to tougher capital requirements under regulators' efforts to make banks safer. The move affects the state-controlled bank's prime broking and over-the-counter clearing businesses for rates. "We are winding down the rates prime broking and rates over-the-counter clearing businesses as a result of the increasing level of capital, operating costs and investment that would be required for our business to be globally competitive in a market with extremely thin margins," an RBS spokesperson said in a statement.
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MARKETS
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UK stocks are mostly lower with AstraZeneca dragging down the FTSE 100.
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FTSE 100: down 0.6% at 6818.3
FTSE 250: up 0.1% at 15407.4
AIM ALL-SHARE: down 0.3% at 794.57
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The euro is slightly higher against the dollar after having reached a near three-month low last week.
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GBP-USD: flat at USD1.6819
EUR-USD: up at USD1.3719
GOLD: up at USD1300.11 per ounce
OIL (Brent): up at USD110.06 a barrel
(changes since end of previous GMT day)
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ECONOMICS AND GENERAL
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The average asking price for a house in the UK jumped 3.6% on month in May, property tracking website Rightmove said - standing at 272,003 pounds, a record high for the month of May. That follows the 2.6% increase in April. On a yearly basis, house prices spiked 8.9% after climbing 7.3% in the previous month. The annual jump marks the highest since October 2007. Prices for properties in London continued to accelerate, prompting fears of a regional bubble with a 16.3% annual increase. The rest of the country was up an average of 4.9%.
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The UK government’s Help to Buy scheme could distort the entire mortgage market and may have to be curbed, The Times reports the governor of the Bank of England as warning. The Times said Mark Carney said that the programme to help new home owners to secure a mortgage with a deposit of as little as 5% may be encouraging a return to risky home loans, adding that the remarks represent the most explicit sign that the Bank of England may formally request a policy change in September.
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Eurozone construction output declined for the first time in five months in March, figures from Eurostat showed. Total construction output fell by 0.6% monthly in March, after a 0.4% growth in the previous month, revised from 0.1%. This was the first decline since November last year, when output decreased 0.9%. Building construction dropped 0.7% in March and output in the civil engineering decreased by 0.6%. On a yearly basis, construction output rose 5.2% in March, which was slower than February's 7.5% increase.
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Core machine orders in Japan surged a seasonally adjusted 19.1% on month in March, the Cabinet Office said - worth JPY936.7 billion. The headline figure shattered forecasts for a 6.0% increase following the upwardly revised 4.6% contraction in February (originally -8.8%). On a yearly basis, core machine orders spiked 16.1% - also blowing past forecasts for an increase of 4.3% following the 10.8% gain in the previous month.
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India's prime minister designate Narendra Modi held meetings with senior party members over the formation of the next government, while the outgoing Congress party met to ponder its crushing electoral defeat. The Bharatiya Janata Party won by a landslide in the general elections, with 282 seats in the 543-member lower house of parliament and 31% ot the total votes. The Congress came a poor second with 44 seats, one-third of its tally in the previous election. BJP leaders Arun Jaitly and Sushma Swaraj were among the party's politicians who met Modi. They also met BJP president Rajnath Singh. Jaitly and Swaraj were leaders of the opposition in the upper and lower houses of the previous parliament and both are contenders for top portfolios in the Modi government.
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Portugal exited its three-year-long international bailout programme Saturday, regaining control of its finances but signalling that austerity measures are not over. Its conservative government met for the occasion to develop a "medium-term strategy" on continuing the reforms and encouraging economic growth. Portugal - which was cash-poor, debt-ridden and threatened with insolvency when it received its bailout in 2011 - has "pulled itself out of a hole," Prime Minister Pedro Passos Coelho said at a European election campaign event in Aveiro. However, the news hasn't all been good. Statistics released Thursday showed its economy unexpectedly contracted 0.7% quarter-on-quarter in the first three months of the year.
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Five bosses with the company that operated the mine where Turkey's worst mining accident occurred have been arrested, media reports said, citing prosecutors. Operations manager Akin Celik, engineers Yalcin Erdogan and Ertan Ersoy, and security chief Yasin Kurnaz were arrested Sunday on charges of death by negligence. Celik was one of the Soma Holding officials who had taken part in a press conference on the accident Friday.
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The death toll from the worst floods to hit the Balkans in decades rose significantly Sunday as water receded and rescuers gained access to stricken areas of Serbia and Bosnia. In Obrenovac, a town on the southern outskirts of Belgrade, 12 additional bodies were recovered, taking the overall Serbian death toll to 17, Prime Minister Aleksandar Vucic said. Tens of thousands have been evacuated across Serbia since the flooding began amid heavy rainfall on Tuesday.
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