5th Aug 2014 10:16
LONDON (Alliance News) - The following is a summary of top news stories Tuesday.
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COMPANIES
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Intercontinental Hotels Group PLC reported lower profit and revenue for the first half of the year due partly to the refurbishment of a Paris hotel and investments in Asia, but the company reported growth in most of its portfolio thanks to the economic recovery in the US and UK and continued strong growth in some Asian markets. The company reported a pretax profit of USD377 million for the six months to end-June, down from GBP462 million a year earlier, as revenue declined to USD908 million, from USD936 million. Its underlying operating profit rose in the Americas, but declined in Europe due mainly to the refurbishment of the InterContinental Paris-Le Grand and in Asia as it invested in its hotels and trading was weak in Thailand. Intercontinental Hotels returned USD750 million to shareholders with a special dividend in July, and also completed a USD500 million share buyback in the first half. On Tuesday, it raised its interim dividend to 25.0 cents a share, from 23.0 cents last year, a move it said reflected its confidence in its strategy.
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Aggreko PLC said pretax profit fell in the first half of 2014, and it continues to expect full-year underlying trading profit to be similar to last year, as revenue growth was offset by currency headwinds. The temporary power company said its pretax profit fell 9% to GBP132 million for the six months ended June 30 from GBP146 million the previous year. The company said its revenues were up 1% to GBP768 million from GBP760 million due to strong growth in its Europe, Middle East and Africa and Americas operations, and the company saw an underlying revenue increase of 12%, which doesn't include currency movements and pass-through fuel costs. It added that it saw double digit growth in its Local business on an underlying level, with FIFA World Cup and Commonwealth Games contracts executed successfully. Aggreko increased its interim dividend by 3.0% to 9.38 pence from 9.11 pence the previous year.
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Meggitt PLC reported lower profit and revenue for the first half of the year as it was hit by weaker demand for its military goods, but the company said it was confident of strong organic revenue growth in the second half and a recovery in its margins as orders rose. It became the latest in a long list of British companies reporting a significant hit from the recent strength of sterling, warning that exchange rates would likely continue to be a drag in the second half of the year. The aerospace, defence and energy sector engineer reported a pretax profit of GBP98.2 million for the six months to end-June, down from GBP122.4 million a year earlier, as revenue declined to GBP718.9 million, from GBP810.1 million and its operating margin was hit as it sold more less-profitable goods and said revenue would be weighted to the second half of the year. The company raised its interim dividend to 4.25 pence, from 3.95 pence, a move it said reflects its confidence in its prospects.
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Fresnillo PLC said pretax profit fell in the first half of 2014 as revenues were hit by lower commodity prices and a fall in gold production, but it maintained its full year production guidance and declared a 5.0 US cents special dividend. The precious metals miner said pretax profit fell 17% to USD208.2 million for the six months ended June 30 from USD249.8 million the previous year, as revenues dropped 27% to USD677.1 million. The company said revenue fell primarily due to lower commodity prices during the period as comparable silver prices fell 18% and gold prices fell 12%.
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Standard Life PLC reported a 12% rise in first half pretax operating profit, as fee-based income was buoyed by UK workers automatically enrolling into corporate pension schemes and an increase in third-party assets under administration in its investments arm. Standard Life increased its interim dividend to 5.60 pence per share from 5.22p. The FTSE 100 long-term savings and investment business said it made a GBP339.0 million pretax operating profit in the six months ended June 30, compared with GBP304.0 million in the corresponding period last year. Standard Life's measure of profitability is pretax profit adjusted for a number of items, including market-driven short-term fluctuations in investment return and economic assumptions.
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Inmarsat PLC reported lower pretax profit as it was hit by lower US government spending and higher depreciation charges, but revenue and operating profits rose, driven by demand from the maritime and aviation sectors. However, it also warned that it would be hit by the recent failure of a rocket launch vehicle, which will delay the launch of the second and third of its Inmarsat-5 satellites and hence the launch of its new Global Xpress services on a global basis. The company reported a pretax profit of USD168.3 million for the six months to June 30, down from USD185.5 million a year earlier, mainly due to higher depreciation costs as new satellite entered service and started to depreciate and due to an adjustment for the Stratos business it previously sold.
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Nedbank Group Ltd, the majority-owned South African banking subsidiary of Old Mutual PLC, reported a 17% increase in first-half pretax profit, amid higher net interest income and lower impairments for loans and advances. Nedbank, which is 52% owned by Old Mutual, increased its interim dividend by 18% to 460 cents. In a statement, Nedbank said it made a ZAR6.41 billion pretax profit in the six months ended June 30, compared with ZAR5.46 billion in the corresponding period last year. Net interest income increased to ZAR11.26 billion from ZAR10.31 billion, which, combined with a fall in impairment charges on loans and advances to ZAR2.33 billion from ZAR3.33 billion, led to an increase in income from lending activities.
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MARKETS
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Major stocks indices are trading higher across the UK and Europe amid some reasonable July Services PMI data across Europe.
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FTSE 100: up 0.4% at 6706.41
FTSE 250: up 0.2% at 15392.48
AIM ALL-SHARE: up 0.02% at 756.27
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The pound was earlier trading at high for the week of USD1.6888 and EUR1.2604 against the dollar and the euro respectively after data showed UK service sector activity rose to its highest level in eight months in July, according to the Markit PMI report.
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GBP-USD: up at USD1.6871
EUR-USD: down at USD1.3392
GOLD: up at USD1292.40 per ounce
OIL (Brent): down at USD105.36 a barrel
(changes since end of previous GMT day)
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ECONOMICS AND GENERAL
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Growth of the UK service sector strengthened in July to an eight-month high, survey data from Markit Economics showed. The headline Chartered Institute of Purchasing & Supply/Markit Purchasing Managers' Index rose to 59.1 in July from 57.7 in June. The index has remained above the 50 no-change mark for over a year-and-a-half. A positive business environment boosted demand in July. With workloads rising, services employment increased at a historically marked rate.
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Economic growth in the UK is getting entrenched and the GDP growth is expected to accelerate to 3% in 2014, the National Institute of Economic and Social Research, or NIESR, said. The GDP growth is estimated at 3%, an upward revision from the previous growth forecast of 2.9% and follows an estimated 1.7% expansion in 2013. In 2015, GDP growth is expected to slow to 2.2%. "The UK economy has finally recovered its pre-crisis size just over six years after the onset of the downturn", the think tank said.
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The services sector in China slid to no change in July, the latest survey from Markit Economics revealed on Tuesday in its latest performance of service index - which came in with a score of 50.0. That's down from 53.1 in June. Total new business placed at manufacturers rose solidly in July, while new order growth at service providers was the weakest in over five-and-a-half years and fractional overall. Employment trends continued to diverge across both the manufacturing and service sectors during July.
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The services sector in Japan swung to expansion in July, the latest survey from Markit Economics revealed on Tuesday in its latest performance of service index - which came in with a score of 50.4. That's up from 49.0 in June. Output returned to growth territory for the first time in four months, while new orders grew at a modest pace for the second consecutive month. Consequently, payroll numbers increased from a previous month of decline. Both input and selling prices rose in July, with a hike in purchases and employment costs being the main contributors to inflation.
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Israel pulled its last soldiers out of the Gaza Strip, as a 72-hour truce went into effect after exactly four weeks of fighting with Palestinian militants. The Israeli army said its ground troops had withdrawn to the Israeli side of the border and would respond to any attacks. Palestinians trapped by the fighting filled streets and markets in the battered coastal enclave, using the calm to stock up on food, and inspect their homes and property. Minutes before the truce came into effect, militants in Gaza fired rockets toward Israel. The military wing of the Hamas Islamist group that rules Gaza said it fired 18 missiles, six of which were intercepted by Israel's Iron Dome anti-missile system.
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Russia announced major air defence exercises along the border with Ukraine, further raising military tensions in the region. More than 100 aircraft are taking part in the five-day exercises, between Monday and Friday, the Interfax news agency reported, citing Russian Air Force spokesman Igor Klimov. The report said that the exercises were unprecedented by ranging across three military districts. Fighter jets and attack helicopters would train by attacking targets in the air and on the ground, it said. The move comes as the standoff between Moscow and the West over Ukraine has reached new heights in the wake of last month's Malaysia Airlines flight MH17 disaster.
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An American doctor suffering from Ebola was improving at an Atlanta hospital, officials said, as reports emerged Monday that he had received an experimental serum while still in Africa and near death. The doctor, Kent Brantly, received a dose of an experimental serum before he left Liberia on Saturday, the Christian charity he was working for said in a statement. Another American aid worker, Nancy Writebol, who also fell ill in Liberia after exposure to the Ebola virus, also received the serum, Samaritan's Purse said. Her condition has improved and she is due to be flown to the US on Tuesday.
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Iraqi Kurdish forces Monday said they had regained ground from jihadist extremists, as Kurdistan President Massoud Barzani vowed to protect the Yezidi minority from the Islamic State group. Herkold Hikmat, spokesman for the Kurdish Peshmerga military, said the Peshmerga had recaptured the Sinjar area west of Mosul, home to much of Iraq's Yezidi minority. Tens of thousands of Yezidis, a Kurdish-speaking minority viewed as infidels by Islamists, fled when the jihadists overran the area on Sunday.
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Formula One chief Bernie Ecclestone's bribery trial could end as early as Tuesday when a Munich court responds to his USD100-million settlement offer. The trial is set to resume on Tuesday, but the court has already told witnesses scheduled to give evidence not to turn up for the proceedings. The 83-year-old last week raised his settlement offer from an initial EUR25 million to USD100 million, according to Germany's daily Sueddeutsche Zeitung. If the court agrees to the settlement, it would allow Ecclestone to retain control of the sport that he turned into a multi-billion dollar business after acquiring the global television rights for Formula One in the 1970's.
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By Arvind Bhunjun; [email protected]; @ArvindBhunjun
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