18th Sep 2014 10:23
LONDON (Alliance News) - The following is a summary of top news stories Thursday.
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COMPANIES
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Low-cost airline easyJet said it has decided to increase its ordinary dividend payout ratio to 40% from the current financial year, and it has also reached agreement with Airbus to exercise purchase rights over 27 current generation A320 aircraft. The airline said that it has decided to increase the payout ratio for the ordinary dividend from one third of profit after tax to 40% of profit after tax from the financial year ending September 30. EasyJet also said it has reached agreement with Airbus to exercise existing purchase rights over 27 current generation A320 aircraft for delivery between 2015 and 2018.
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Marks & Spencer Group is to accelerate its expansion into international markets by entering the Scandinavian market, the Financial Times reported on Wednesday. The retailer has already outlined plans to open 250 new international stores by 2016 and is set to open 15 new franchise stores across Finland and Norway, with the first site, a 32,000 square foot flagship store in Helsinki, to open next month, the FT said. The retailer has teamed with Finnish retailer S Group as a franchise partner for the launch and will work with Norwegian retailer POCOS Group in that country, the newspaper added.
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Petra Diamonds saw its shares rise after it reported higher profit and revenue for its last financial year, and said its outlook is positive because it expects its production to increase, rough diamond prices to rise, and it is continuing to find exceptional diamonds in its mine. The stock has already risen 67.1% so far in 2014, after a string of good news including finding three exceptional rough stones in its Cullinan mine in South Africa. It has previously said it would start paying dividends in fiscal 2016, but said it could bring the date forward. It will give more detail on this at the end of January, 2015. It reported a net profit of USD67.5 million for the year to June 30, up from USD27.9 million a year earlier, as revenue rose to USD471.8 million, from USD392.5 million.
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Premier Farnell reiterated its expectations for the full year despite seeing its pretax profit dip in the half year to February 1, as it expects its investments and reorganisation to position it to accelerate top-line growth and deliver target profitability in its second half. The electronics company maintained its interim dividend at 4.4 pence. In the first half the company posted a pretax profit of GBP36.4 million, down from GBP38.1 million in the previous year, as revenue fell to GBP479.3 million from GBP498.2 million. Premier Farnell saw GBP2.3 million in restructuring costs relating to its business reorganisation, and GBP100,000 for the acquisition of AVID Technologies.
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UK food wholesaler Booker Group said sales only inched up slightly in the second quarter of its financial year, helped by non-tobacco sales, and said its turnaround plans for the Makro business remain on track and on budget. Total sales in the 12 weeks to September 12 were up 0.1% including sales from Makro. Non-tobacco sales were up 0.8%, while tobacco sales declined 1.4%.
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Just Retirement Group reported a 6% increase in new business sales, as its entry into the defined benefit de-risking space and strong lifetime mortgage volumes offset weak individual annuity sales following the shake-up of the market in the wake of the Budget. In a statement, Just Retirement reported GBP1.75 billion of new business sales in the year ended June 30, compared with GBP1.65 billion last year. Chief Executive Rodney Cook said operating conditions have become much tougher since the Budget, with individually underwritten annuities sales at "slightly below" half their pre-Budget levels. However, Cook said the group will further develop its defined benefit de-risking in order to accelerate its penetration into the sector.
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Punch Taverns has almost ended a drawn-out process to restructure its GBP2.3 billion debt pile , after bondholders and shareholders finally agreed to its latest proposals. The debt-for-equity deal will mean shareholders are left with 15% of the equity while bondholders take over the remainder of the stock. However, debt will be cut by GBP600.0 million.
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Merlin Entertainments said a positive trading performance over the summer from its attractions and theme parks, has left its confident in its outlook for the remainder of the year. The attractions and theme park operator said throngs of customers continued to flood through the gates of its LEGOLAND parks over the summer, driving revenue growth of 3.8% at actual exchange rates for the 36 weeks ended September 6, and a 9.3% rise at constant currency, as sterling strength hit revenue on a reported basis. In the year-to-date, Merlin said like-for-like revenue has grown 6.7% - with LEGOLAND parks up almost 14%, Midway Attractions up 3.2%, and its Resort Theme Parks sporting 4.2% growth.
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Kier Group reported higher underlying profits for its last financial year as its acquisition of May Gurney and strong organic growth drove up revenue, and it appointed Balfour Beatty PLC executive Beverley Dew as its Finance Director, although it hasn't yet decided when the 43 year-old will start in the job. The company reported underlying pretax profit of GBP73.1 million for the year to end-June, up from GBP47.6 million a year earlier, as revenue grew by half to GBP3.0 billion, from GBP2.0 billion. It pretax profit fell, however, to GBP14.8 million, from GBP25.9 million, as exceptional items more than doubled to GBP42.2 million due to the costs related to its acquisition of May Gurney. It raised its total dividend for the year by 6% to 72.0 pence, from 68.0p.
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Vehicle hire company Northgate said it is trading in line with expectations and expressed confidence for the full year on the back of increased profit and revenue from its UK and Spanish businesses. FTSE 250-listed Northgate said vehicles on hire in the UK rose 900 between May 1 and September 18 to 48,500. This compares to an increase of 1,600 in the same period last year. In Spain, Northgate said vehicles on hire were up 1,800 during the period to reach 36,500, ahead of the 1,300 increase reported in the comparable period in 2013.
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Events marketing and communications company UBM confirmed it has been involved in discussions to potentially acquire its trade show rival Advanstar Communications Inc, following recent media speculation. The PR Newswire owner said the discussions may or may not lead to an offer, and said it will make a further announcement in due course as appropriate.
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MARKETS
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UK indices have had a mixed morning session as the market awaits the outcome of the Scottish referendum in the early hours of Friday.
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FTSE 100: up 0.5% at 6,816.65
FTSE 250: up 0.4% at 15,639.58
AIM ALL-SHARE: down 0.6% at 759.14
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The pound has experienced increased volatility since seeing a 60 point spike against the dollar just before the polls opened in Scotland earlier. Lower than expected UK retail sales provided a brief knock which was short-lived. The pound is currently towards the top of recent ranges at USD1.6318.
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GBP-USD: up at USD1.6318
EUR-USD: up at USD1.2864
GOLD: up at USD1223.28 per ounce
OIL (Brent): up at USD99.06 a barrel
(changes since end of previous GMT day)
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ECONOMICS AND GENERAL
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UK retail sales increased as expected in August on non-food store sales, data from the Office for National Statistics showed. Including auto fuel, retail sales volume increased 0.4% from July, when it remained flat. The monthly growth rate matched expectations. Meanwhile, sales excluding auto fuel grew 0.2% month-over-month, which was slower than the 0.4% rise seen in July and weaker than the expected 0.3% increase.
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UK mortgage lending increased from a year ago in August, figures from the Council of Mortgage Lenders showed. Gross mortgage lending grew 13% year-on-year to GBP 18.6 billion in August. Meanwhile, compared to the previous month, lending fell 5%. The latest figure marked the highest lending total for an August since 2008.
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Scottish voters were taking part in a historic referendum, as they are asked to decide whether or not to end more than 300 years of union with the rest of the United Kingdom. Almost 4.3 million people have registered to vote across 32 different localities, making it the largest-ever recorded electorate in Scotland. Turnout is expected to be high. Opinion polls indicate the vote is on a knife edge, with a survey by You Gov published late Wednesday showing that 52% of Scots planned to vote against independence while 48% were in favour.
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The following is the expected timetable of events for the Scottish vote:
- Polling stations in Scotland's 32 local authority areas will be open from 7 am to 10 pm.
- Counting will take place as soon as reasonably possible after the polling stations close. Postal votes will have to be added to the votes made on the day.
- Smaller local authorities are expected to declare first at around 0200 BST on Friday morning, with Edinburgh, Glasgow and Aberdeen expected to be the last to declare as late as 0600 BST on Friday morning.
- The result of the vote is unofficially expected to be released around 7 am Friday morning, although there is no official time for the result. Turnout is predicted to be very high, meaning results could take more time to collate.
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The US Federal Reserve expects to end its monthly purchases of government-backed debt after its next scheduled meeting on October 28-29, the central bank said Wednesday. If current expectations remain on track for ongoing improvement in the labour market and inflation, "the committee will end its current programme of asset purchases" at next month's meeting, the Fed said. The statement reiterated that bond purchases "are not on a preset course." The Fed also voted Wednesday to reduce quantitative easing from the current USD25 billion per month to USD15 billion in October. The Fed maintained its forecast that near-zero interest rates would remain in place for a "considerable time".
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The European Central Bank announced the results of its first targeted longer-term refinancing operation (TLTRO), which is aimed to boost liquidity at Eurozone banks to help revive lending to small businesses and households. The central bank announced that 255 bidders were allotted EUR82.60 billion, which was below the EUR100 - EUR150 billion predicted by analysts.
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New home prices in most Chinese cities fell in August, data from the National Bureau of Statistics showed Wednesday. Average new house prices in 68 out of the total 70 cities declined in August from the previous month. Prices in major cities like Shanghai and Shenzhen decreased 1.1% each. Prices in Beijing dropped 0.9%. On a year-over-year basis, house prices in 19 out of the 70 cities fell in August while prices in 48 cities increased.
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Japan posted a merchandise trade deficit of JPY948.5 billion in August, the Ministry of Finance said - remaining in the red for a record 26th consecutive month. The headline figure beat forecasts for a shortfall of JPY1,028.9 billion following the JPY962.1 billion deficit in July. Exports fell 1.3% on year to JPY5.705 trillion, beating expectations for a drop of 2.6% but down from the 3.9% jump in the previous month. Imports dipped an annual 1.5% to JPY6.654 trillion versus forecasts for a fall of 1.2% following the 2.3% gain a month earlier.
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The US House of Representatives approved the training of moderate Syrian rebels to fight against the Islamic State in a 273-156 vote, with opposition Republicans giving strong backing to US President Barack Obama's strategy. The measure, which was requested by Obama, is part of a budget resolution that now goes to the full Senate, where it is expected to pass.
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The international coalition being put together by the US to fight the Islamic State has reached 50 countries, US Secretary of State John Kerry said Wednesday. Efforts are now focused on what each nation's contribution will be, Kerry told the Senate Foreign Relations Committee. More details will be made public at the United Nations General Assembly this week and next.
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The Ebola epidemic could deal a "catastrophic" blow to already fragile West African countries, the World Bank said Wednesday, pointing to fear of contagion as the main factor driving the downturn.
Left unchecked, Ebola could lead to a contraction of Liberia's economy by 11.7% in 2015, putting the West African country - the worst-affected by the epidemic - at minus 4.9% growth, the World Bank said. Guinea and Sierra Leone - the second and third hardest-hit nations - could see gross domestic product (GDP) drop by 2.3 and 8.9 percentage points respectively in 2015.
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By Arvind Bhunjun; [email protected]; @ArvindBhunjun
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