13th Feb 2014 11:28
LONDON (Alliance News) - The following is a summary of top news stories Thursday.
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COMPANIES
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International Consolidated Airlines Group PLC said Iberia has finally reached agreement in principle with pilots' union SEPLA to introduce permanent structural change and improve the airline's viability, a deal that is key to turning around the struggling business. IAG was formed in 2011 when British Airways and Iberia merged under one holding company. The Spanish airline had put forward restructuring proposals in November, which were rejected by unions, and had then put forward less-stringent proposals in January, which unions also rejected at that time. However, the pilots union has now come to an agreement in principle, meaning the airline now has to get a deal with its cabin crew and baggage handlers.
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Lloyds Banking Group PLC said it swung to a GBP415 million statutory pretax profit for 2013, continuing its slow march back to the private sector when the UK government decides to cash in its 33% stake in the bailed-out bank. In 2012, the bank made a GBP606 million statutory pretax loss, with a return to statutory pretax profitability coinciding with the bank's declaration that it is now a "normal bank". Lloyds reiterated Thursday that it will apply to restart dividend payments in the second half of 2014, with a plan to move to a dividend payout ratio of "at least 50% of sustainable earnings in the medium term". Lloyds said it expects to give an update on its new strategic plan for 2015-17 by the end of 2014.
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Rio Tinto PLC said it swung to a pretax profit, increased underlying earnings 10% and will raise its dividend for the full-year 2013. The Anglo-Australian mining giant said its profit before tax for the year reached USD3.51 billion for the twelve months ended December 31, compared from a loss of USD2.43 billion a year ago. Underlying earnings grew 10% to USD10.2 billion, and the company exceeded its cost-cutting expectations, with net operating costs falling to USD36.10 billion from USD37.53 billion.
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Tate & Lyle PLC said that adjusted pretax profit for the third quarter came in lower than expectations, as volume and sales growth in its SPLENDA Sucraclose sweetner were in line with first-half levels and its expectations, ahead of impending price declines. Shares in the British-based multinational agribusiness plummeted in morning trading after it said in its interim management statement for the three months to December 31, 2013 that adjusted profit before tax was lower than its expectations and that it now expects profits for the year to March 31, 2014 to be broadly in line with last year.
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Imperial Tobacco Group PLC maintained its expectation for modest earnings per share growth at constant exchange rates in its current financial year, with an at least 10% increase in dividend, despite starting the year with a decline in reported tobacco net revenue in its first quarter. The FTSE 100 cigarettes and tobacco company said it saw tobacco net revenue of GBP1.56 billion in the quarter ended December 31, 2013, down 6% on a reported basis but up 1% on an underlying basis. Imperial Tobacco's financial year ends on September 30.
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Rolls Royce Holdings PLC said it expects a "pause" in both revenue and profit growth during 2014, reflecting offsetting trends across the business it said, after reporting a 19% rise in its order book, boosted by a good year in its Civil Aerospace division. In its full-year statement of results for the year to December 31, 2013 the firm said underlying revenue grew 27% to GBP15.5 billion from the GBP12.16 billion reported last year, including GBP2.6 billion from the Tognum business - a German industrial concern, which holds interests in a number of engine manufacturing brands and facilities, jointly owned by Daimler AG and Rolls-Royce.
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AMEC PLC said its pretax profit was largely flat in the full year 2013, while saying it has signed a five-year-plus ShellONEgas extension contract and entered a definitive agreement to acquire Foster Wheeler AG. The FTSE 100 engineering and project management company said its overall pretax profit was largely flat at GBP255 million for the twelve months ended December 31, 2013, from GBP254 million the previous year.
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HomeServe PLC said it has agreed to the final terms of a GBP30.6 million fine imposed by the Financial Conduct Authority relating to the investigation into historic regulatory issues at its UK business. The home emergency services provider has agreed to the terms of the GBP30.6 million fine following an investigation by the UK financial regulator over mis-selling policies.
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Morgan Advanced Materials PLC said full-year revenue fell by around 5% as demand in its markets remain "subdued" due to a slump in global industrial growth causing the firm to be cautious in its expectations for the first-half of its new year. In its full-year results for the period to December 31 2013, Morgan said revenue came in at GBP957.8 million, down 4.9% from the restated GBP1.007 billion reported in 2012.
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MARKETS
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Main market UK stock indices are firmly lower, weighed on by disappointing results from some big corporate names. Small-cap companies on the AIM All-Share are outperforming.
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FTSE 100: down 46.25 at 6,629.13
FTSE 250: down 104.26 at 15,974.92
AIM ALL-SHARE: up 3.60 at 874.28
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The pound has continued its rise against the dollar that began after the Bank of England boosted its growth forecasts for the UK on Wednesday. Sterling is currently testing its recent high of USD1.6668. Beyond that level, the pound will be at its highest point since May 2011, potentially frustrating the Bank of England, which Wednesday warned about the strength of the pound hurting the UK's global competitiveness.
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GBP-USD: up at USD1.6639
EUR-USD: up at USD1.3663
GOLD: flat at USD1,291.83 per ounce
OIL (Brent): down at USD107.98 a barrel
(changes since end of previous GMT day)
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ECONOMICS AND GENERAL
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If Scotland walks away from Britain it will also be walking away from the pound, British Chancellor George Osborne warned, explicitly ruling out a currency union for the first time. The Scottish government has declared that it will keep the pound in a "sterling union," if Scots vote to leave Britain in a referendum on independence in September. "If Scotland walks away from the UK, it walks away from the UK pound," said Osborne in a speech in Edinburgh.
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UK JANUARY HOUSE PRICE BALANCE PLUS-53 VS. DEC. PLUS-56 - RICS
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Germany's EU harmonized inflation held steady in January, in line with the preliminary estimates, latest data revealed Thursday. The harmonized index of consumer prices (HICP) advanced 1.2% annually in January, which was unchanged from the December growth rate, the Federal Statistical Office said. The outcome matched the preliminary estimates. The HICP decreased 0.7% compared to December, when it recorded a 0.5% growth. The monthly change matched the flash estimates.
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The US Senate Wednesday agreed to temporarily lift the nation's debt ceiling, adopting a measure that cleared the House of Representatives a day earlier and ensuring that the country will not face another costly standoff over paying its bills. The measure, which passed with a simple majority of 55-43, now goes to President Barack Obama, who has indicated he will sign it into law.
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A snow and ice storm crept across several southern US states Wednesday before turning to the north-east - towards Washington, Baltimore and Philadelphia - where severe weather warnings were posted. New York and Boston were also in its path. Snow and ice plagued several southern US states, hitting Atlanta, Georgia, and Charlotte, North Carolina, especially hard. An estimated 480,000 homes were left without electricity, news reports said.
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The International Monetary Fund agreed to disburse EUR910 million to Portugal on the completion of its tenth review under the bailout program. The Executive Board of the IMF said all prior actions for the completion of this review were met. But they urged Portugal to put the public debt firmly on a downward path.
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Senior representatives from North and South Korea failed to reach agreement during high-level talks between the two sides, South Korean news agency Yonhap reported Thursday. An official from Seoul's Unification Ministry said following late-night talks in the border village of Panmunjom Wednesday that "differences between the two Koreas have not been narrowed," the agency reported. North Korea demanded that Seoul and the US delay joint military manoeuvres due to begin on February 24, a request that Seoul refused, the official said.
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Aid workers Wednesday evacuated 217 civilians from the besieged Old City of Homs in central Syria, hours before a local humanitarian truce was due to expire. A United Nations official, who asked not to be named, said the evacuees on the sixth and last day of the truce were mostly women and children.
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Russian President Vladimir Putin said Egyptian military leader Abdel-Fattah al-Sissi is running for president. "I know that you have decided to stand for the post of president of Egypt," Putin said before reporters after a meeting with al-Sissi, according to the Interfax news agency. He added that he wishes al-Sissi success and that he hopes that Egypt and Russia would cooperate more closely after the elections. Al-Sissi has been widely expected to enter the race, but has not officially announced this yet.
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International AirlinesRio TintoTate & LyleHSV.LMorgan Advanced MaterialsRolls-RoyceIMT.L