26th Feb 2014 11:34
LONDON (Alliance News) - The following is a summary of top news stories Wednesday.
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COMPANIES
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Online domestic appliances retailer AO World PLC set the price for its upcoming initial public offering at 285 pence a share, meaning the company will have a GBP1.2 billion market capitalisation when it lists, well above earlier estimates. If AO lists at GBP1.2 billion, that could propel it into the FTSE 250 in the next index review, even though it only made earnings before interest, taxes, depreciation and amortisation of GBP10.7 million on revenues of GBP275.5 million in the year to the end of March 2013. Signalling the strong demand for the IPO, AO shares were up 3.7% at 393.875 pence in conditional dealings ahead of the flotation Wednesday. Unconditional dealings will start March 3.
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ITV PLC increased its payout to shareholders, although not by as much as some analysts had expected, as it reported a rise in pretax profit in 2013 driven by growth in its Studios division and gave a bullish forecast for 2014. The television broadcaster posted a total normal dividend of 3.5 pence for the year, up from 2.6 pence in the previous year. Additionally, ITV announced a special dividend of 4.0 pence, in line with the special dividend it paid in 2012. ITV's net cash at the end of 2013 was GBP164 million, similar to 2012.
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Engineering solutions firm Weir Group PLC reported a fall in profit and revenue for the full year, as it was hit by challenging end-user markets, but said it expects to return to underlying growth in 2014. The company posted pretax profit of GBP418 million for the period ended January 3, 2014, down from GBP440 million a year earlier as revenue fell 4% to GBP2.43 billion from GBP2.54 billion. Despite the company setback in 2013, it increased its final dividend to 33.2 pence from 30.0p, lifting its total annual dividend 11%.
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Travis Perkins PLC, the UK's largest building merchant, reported an increase in profit for the full year, but warned that although recovery for the building market continues to improve it is "still early days". The company said it finally saw its markets come out of recession as confidence in the building industry driven partly by the government's Help-to-Buy scheme, picked up. However, it noted that the UK market for building and construction materials is still, at December 2013, 13% below the peak levels of 2008. New build makes up 20% of the business with the rest consisting of repair and maintenance. Travis Perkins posted pretax profit of GBP312.6 million for the period ended December 31, up from GBP299.2 million a year earlier, as revenue rose 6.3% to GBP5.15 billion from GBP4.84 billion in 2012.
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HSBC Holdings PLC said it has agreed to sell SB JSC HSBC Bank Kazakhstan to JSC Halyk Bank for USD176 million in cash, as it continues its policy of streamlining its operations and disposing of businesses it considers non-core. HSBC Bank Kazakhstan, which provides retail and wholesale banking services for personal, corporate and institutional customers, was sold at a premium to its USD160 million net asset value, the value of its assets less liabilities.
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International Personal Finance PLC Wednesday said its pretax profits for 2013 rose by 45% after solid revenue growth, driven by the home credit lender's expansion into new markets and an increase in the credit it issued. Pretax profit rose to GBP130.5 million from GBP90.3 million in 2013, as revenue rose by 10% to GBP746.8 million. IPF booked a GBP12.4 million exceptional gain from the sale of impaired receivables originating from loans issued in Poland for GBP15.9 million, while it wrote down IT assets at a cost of GBP3.5 million. Excluding exceptional items, pretax profit grew by 24% to GBP118.1 million
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Anglo American PLC plans to cut jobs at the Drayton thermal coal mine in Australia later this year following problems with getting planning approvals, the company told employees at the site on Tuesday. The major diversified mining company said it will now move to a five-day roster rather than seven days at the site, after delays to planning approvals held back the expansion of a nearby project designed to extend the mine's life. The company said it will now slow production to preserve remaining reserves but did not specify how many jobs from its 500 strong workforce at the site would be lost.
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Chip maker CSR PLC signalled its confidence for 2014 as it announced plans to return up to USD50 million via a share buyback in 2014 and hiked its final dividend, although it swung into a pretax loss in 2013 as it wrote off its Cameras unit. CSR said it expects to see revenues for the first quarter of 2014 in the range of USD170 million to USD190 million. It expects revenue from its legacy businesses to decline by around 65% in 2014 compared to 2013 revenue.
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Hays PLC Wednesday said its half-year pretax profits rose by 10%, driven by net fee growth and improving market conditions in the UK and Asia. In a statement, the FTSE 250 recruitment company said it made a GBP62.5 million pretax profit for the six months ended December 31, 2013, compared with GBP56.7 million for the corresponding period in the previous year. Hays kept its interim dividend at 0.83 pence a share. Net fees increased to GBP363.4 million from GBP360.3 million.
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Baker Greggs PLC said it will continue to focus on building its food-on-the-go business in 2014, after reporting lower profits and like-for-like sales in its last financial year. The company did well during the financial crisis and economic downturn as sales of hot, inexpensive items like sausage rolls and pasties did well, but it ran into trouble last year and it issued profit warnings as sales slid in the first half of the year and investments in its shops weighed on results. It has decided to build a bigger food-on-the-go business to try and capitalise on growing consumer demand for that sort of product, rather then its take-home bakery products.
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Petrofac Ltd announced modest net profit and revenue growth for 2013 that was in line with, to slightly better than, market expectations. The oil and gas services company also reiterated guidance towards a flat to slight increase in net profit during 2014 and said it is confident of return to strong earnings in 2015, following recent big contract wins.
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MARKETS
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The UK's main stock indices are lower, weighed on by a number of disappointing corporate announcements, as well a revision downwards in the annual growth rate of the UK economy last year.
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FTSE 100: down 0.3% at 6812.02
FTSE 250: down 0.4% at 16457.37
AIM ALL-SHARE: down 0.2% at 887.85
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The pound climbed against other major currencies following the fourth quarter UK GDP report. The pound recovered to 1.6702 against the US dollar immediately after the data, after sliding to 1.6661 in early deals. If the pound extends its advance, it is likely to challenge resistance at the 1.68 zone.
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GBP-USD: up at 1.6692USD
EUR-USD: flat at 1.3743USD
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GOLD: flat at USD1,341.10 per ounce
OIL (Brent): flat at USD109.51 a barrel
(changes since end of previous GMT day)
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ECONOMICS AND GENERAL
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UK Q4 GDP UNREVISED AT +0.7% Q/Q; +2.7% Y/Y; 2013 GDP GROWTH REV TO 1.8% FROM 1.9%; Q4 BUSINESS INVESTMENT UP 2.4% ON QUARTER, 8.5% ON YEAR; DEC SERVICES INDEX UP 0.2% ON MONTH VS. 0.5% IN NOV, CONSENSUS 0.4%
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The Bank of England is in no hurry to raise interest rates and will focus more on supporting the economic recovery, two policymakers said. "We're not planning to raise interest rates any time soon," Bank of England Chief Economist and rate-setter Spencer Dale said in an interview to BBC Radio. "Interest rates will have to rise at some point, but not yet," Dale said. And when the time comes to hike them, the central bank will do so "very gradually and cautiously" to nurture the recovery in output growth and employment, he added.
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The Bank of England unveiled new set of rules to supervise branches of foreign investment banks operating in the UK. According to a Consultation Paper, the Prudential Regulation Authority will review whether the supervision of a firm in its home country is equivalent to that of the PRA and whether the bank can be wound down in a way that reduces the impact on financial stability in the UK. The new supervisory approach is expected to require some branches to either exit the market or become a subsidiary.
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Germany's consumer confidence is set to improve in March, a closely watched survey from GfK showed. The consumer confidence index rose to 8.5 points from 8.3 points in February. The index was forecast to remain unchanged at February's originally estimated value of 8.2. After five consecutive increases, economic expectations registered a moderate fall of 3.4 points to 31.9 in February. In contrast to economic expectations, income expectations rose further in February, to 48.6 from 46.2.
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Japan's economic recovery will continue even if the economy contracts after the sales tax hike in April, Bank of Japan policymaker Koji Ishida said. Speaking to business leaders in Saitama City, north of Tokyo, Ishida said government stimulus together with exports and capital expenditure will support growth.
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Thousands of anti-government protesters demanded a swift investigation by police into the killing of four children in attacks on demonstration sites over the weekend. The protesters, dressed in black and white mourning colors, gathered outside police headquarters in Bangkok to call for justice for four children aged 4 to 6 who died in two separate attacks.
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Bitcoin investors and enthusiasts were in turmoil Tuesday after one of the largest exchanges of the virtual currency ceased operations amid reports of a massive theft. Mt Gox, a Tokyo-based website that acted as a kind of Bitcoin bank was unreachable Tuesday following a leaked memo. It allowed holders to store their virtual currency there or exchange it for dollars, yen or other hard currency and had conducted hundreds of millions of dollars in transactions since its 2010 founding. The memo, which purported to come from Mt Gox management detailed how the site may have lost some 744,000 Bitcoins to theft over several years and was on the verge of bankruptcy.
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Italy's new government was finally confirmed by parliament on Tuesday, after two days of debate that saw Prime Minister Matteo Renzi pledge big reforms and attack the anti-establishment Five Star Movement. In a widely-anticipated result, Renzi's executive earned a comfortable majority in the lower house of parliament, the Chamber of Deputies, winning a vote of confidence with 378 votes in favour, 78 votes over the majority threshold. The upper chamber, the Senate, had given its support to the new executive late on Monday.
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Ukraine's new leaders promised Tuesday to fight separatism, as Russia and the EU called on them to ensure the country's integrity. Interim President Oleksandr Turchynov said that the power vacuum that resulted after President Viktor Yanukovych's ouster at the weekend has resulted in calls for separatism. "This was embraced by those who envy Ukraine and who want it to break-up," he was quoted by local media as saying. Turchynov was referring to Crimea, where ethnic Russian protesters have threatened to secede after the power change in Kiev.
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US President Barack Obama signalled Tuesday that the door would remain open until "later this year" on the US military presence in Afghanistan in his first phone call with Afghan President Hamid Karzai in eight months. Obama and Karzai have been at loggerheads over a bilateral security agreement that would keep a US military presence in Afghanistan after the 2014 pullout of foreign combat troops. The call came a day before NATO defence ministers begin meeting in Brussels, where the way forward in Afghanistan is on the agenda.
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Officials at the United Nations on Tuesday briefed the General Assembly on the current humanitarian situation in Syria warning of "relentless violence" and "increasingly brutal suffering." "The conflict has inflicted unimaginable suffering on the Syrian people for nearly three years," said UN Secretary General Ban Ki-moon. "The scale and severity of humanitarian suffering in Syria is growing daily." Currently, more than 9.3 million people inside Syria, country with a total population of 22.4 million, are in need of assistance, including 6.5 million internally displaced persons, said Kyung-wha Kang, the deputy to humanitarian affairs chief Valerie Amos.
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