21st May 2015 10:11
LONDON (Alliance News) - The following is a summary of top news stories Thursday.
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COMPANIES
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Royal Mail reported higher profit for its last financial year as a better-than-expected performance in reducing costs in the UK offset lower-than-expected revenue in its parcels business, and the company said it will step up its transformation plan in the face of a challenging trading environment. It reported a pretax profit of GBP569 million for the year ended March 29, up from GBP421 million a year earlier, even though revenue declined to GBP9.42 billion from GBP9.46 billion. It raised its full-year dividend to 21.0 pence from 20.0 pence. Cantor Fitzgerald said Royal Mail's full-year results and dividend came in line with its estimate.
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Smiths Group said its outlook for the current financial year remains unchanged, as its underlying revenue and headline operating profit fell slightly year-on-year in the nine months to May 2. The engineering company said the slight fall in revenue and profit reflects continued like-for-like revenue growth in Smiths Medical and its Flex-Tek unit which are being offset by declines in Smiths Detection, Smiths Interconnect and John Crane. However, it said headline operating profit cash conversion is strong at 96% in the financial year to date.
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United Utilities Group reported annual results that beat analyst expectations and its dividend was increased as expected, but pretax profit after exceptional items experienced a substantial fall. The FTSE 100-listed water company reported a fall in pretax profit for the year ended March 31 of GBP341.6 million from GBP543.3 million a year earlier, while before exceptional items, pretax profit came in at GBP447.0 million, up from GBP388.0 million, as revenue rose to to GBP1.72 billion from GBP1.68 billion. United Utilities lifted its final dividend to 25.14 pence, resulting in a total dividend for the financial year rising to 37.70 pence from 36.04 pence, and it reiterated its commitment to grow the dividend in line with inflation over the next five years.
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National Grid reported profit before exceptional items that beat analyst expectations but said pretax profit after those items fell. The power grid operator increased its dividend as expected, but not as much as analysts had forecast. The FTSE 100-listed company reported a profit before tax of GBP2.62 billion in the year ended March 31, down from GBP2.74 billion a year earlier. Before exceptional items and remeasurements, pretax profit rose to GBP2.87 billion from GBP2.58 billion, as revenue experienced a lift to GBP15.20 billion from GBP14.80 billion. Pretax profit before exceptional items beat analyst expectations. National Grid will pay a final dividend of 28.16 pence per shares, up from 27.54 pence and leading to a full-year dividend of 42.87 pence, up 2% from 42.03 pence. This was slightly lower than the analyst consensus expectations.
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Halliburton said it has reached an agreement with BP Exploration & Production, part of BP, to resolve remaining issues, which includes indemnities between the parties and dismissal of all claims against each other, relating to the April 20, 2010, Deepwater Horizon well explosion in the Gulf of Mexico.
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Booker Group confirmed that it will buy Musgrave Retail Partners GB, which comprises the Londis and Budgens convenience store chains, from Irish food wholesaler Musgrave Group, while also reporting growth in profit in its recently-ended financial year. Booker said it will purchase Musgrave Retail Partners for GBP40 million in cash. Londis operates 1,630 convenience stores, while Budgens operates 167 stores. Booker added that it anticipates the acquisition to be earnings neutral in the first year of ownership, but will be earnings enhancing thereafter. Booker Group reported a pretax profit of GBP138.8 million in the year to March 27, up 14% from GBP122.1 million the prior year, boosted by a 2% increase in revenue to GBP4.8 billion from GBP4.7 billion. Booker Group will pay a total dividend of 3.66 pence, a 14% increase on the year before.
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Dairy Crest shares dropped after it reported a huge fall in profit in its recently-ended financial year as it booked various costs relating to investments and disposals, and as revenue fell due to further struggles in its Dairies and its Spreads And Butter businesses. The dairy company reported a drop in pretax profit for the year ended March 31 to GBP22.1 million, less than half of the GBP54.2 million profit it made the prior year, as it booked a GBP36.3 million charge associated with investments, site disposals, the sale of its Dairies operations and the consolidation of Spreads and Butter production in Kirkby and Severnside.
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Just Eat said it will launch a placing and open offer of shares to raise GBP445 million to back its acquisition of Australian online takeaway company Menulog Group Ltd, announced earlier this month. Just Eat said the funding will be raised via an accelerated bookbuild, run by JPMorgan Securities PLC and Goldman Sachs International.
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Automotive retailer and distributor Inchcape said it has started 2015 in line with its expectations on the back of growth across its markets and solid demand in both its vehicles and aftersales businesses. FTSE 250-listed Inchcape said its revenue in the four months to the end of April was GBP2.19 billion, down 0.9% year-on-year due to the weakness of the euro but up 4.1% in constant currencies. Like-for-like revenue was down by 0.3% in the period, but up 4.9% in constant currencies.
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SSP said it will pay its maiden interim dividend for the first half of its financial year after pretax profit rose as an improvement in its operating margin offset a slight fall in revenue. FTSE 250-listed SSP, which operates food and drink concessions such as Upper Crust in airports and train stations, said its pretax profit in the six months to the end of March rose to GBP16.4 million, from GBP10.9 million a year earlier. The rise in profit meant the group declared its maiden interim dividend of 2.1 pence per share.
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Electrocomponents announced that Finance Director Simon Boddie will be stepping down at the end of the first half of its current financial year, as it posted a decline in pretax profit for its recently ended financial year due to continued declines in the UK. The electronics company said that its performance had been "disappointing", with investments not yet delivering an expected step-up in revenue growth and with its UK business remaining in decline. Electrocomponents posted a pretax profit of GBP96.1 million for the year to end-March, down from GBP101.1 million a year before, as revenue declined to GBP1.266 billion from GBP1.27 billion. Electrocomponents maintained its final dividend at 6.75 pence per share, and its total dividend at 11.75 pence.
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MARKETS
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The FTSE 100 is trading flat mid-morning supported by mining stocks, while the market continues to digest somewhat doveish comments by the US Federal Reserve.
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FTSE 100: flat at 7,010.72
FTSE 250: flat at 18,129.39
AIM ALL-SHARE: flat at 762.42
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The pound rose to a two-day high against the dollar after data showed that UK retail sales recovered at a faster-than-expected pace in April.
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GBP: up at USD1.5660
EUR: up at USD1.1154
GOLD: flat at USD1209.87 per ounce
OIL (Brent): up at USD65.71 a barrel
(changes since end of previous GMT day)
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ECONOMICS AND GENERAL
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UK retail sales recovered at a faster-than-expected pace in April, on the back of non-food store sales, data from the Office for National Statistics showed. The volume of retail sales including auto fuel expanded 1.2% month-on-month reversing a 0.7% fall in March. Sales were expected to grow 0.4%. Likewise, excluding auto fuel, sales increased 1.2% after staying flat in March. Economists had forecast a 0.2% rise for April.
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A new UK government-owned company has been created to sell off more than GBP23 billion in assets this fiscal year, Chancellor of the Exchequer George Osborne said. Speaking at the Confederation of British Industry's annual dinner, Osborne said Shareholder Executive, the body responsible for the government's holdings in companies such as Royal Mail and uranium enrichment company Urenco, will be unified with UK Financial Investments, which takes charge of the taxpayer's holdings in bailed out banking assets. The new company, named UK Government Investments, will be tasked with getting good value for taxpayers as shares in Lloyds Banking Group, UK Asset Resolution assets, Eurostar and some loans made to students are sold off.
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Only a "few" Federal Reserve members anticipate raising US interest rates in June, according to the minutes of the central bank's April 29-30 meeting. Back in March, "several" members said the Fed was on track to raise rates in June, but policy makers appear more reluctant to tighten given the fragile nature of the economic recovery. April's dismal retail sales report came out days after the meeting and was therefore not factored in, meaning the Fed is even less likely to seriously consider a summertime rate hike than these minutes would indicate. Fed members say they will be keeping a close eye on incoming economic data.
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The manufacturing sector in China remained in contraction in May, albeit at a slower pace, the latest survey from HSBC revealed with a two-month high PMI score of 49.1. That was shy of expectations for a score of 49.3, although it was up from 48.9 in April. It also remained beneath the line of 50 that separates expansion from contraction. "The Flash China Manufacturing PMI pointed to a further deterioration in operating conditions in April, with production declining for the first time in 2015 so far," said Markit economist Annabel Fiddes.
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The Eurozone economy lost growth momentum for a second successive month in May, flash data from Markit showed. The composite Purchasing Managers' Index dropped to 53.4 in May from 53.9 in April. The reading was expected to remain unchanged at 53.9.
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The euro area current account surplus declined for the second consecutive month in March, with the drop more than the expectations of economists, due to a decrease in the surplus on goods trade and lower primary income, data published by the European Central Bank showed. The current account surplus dropped to a seasonally adjusted EUR18.6 billion from EUR27.3 billion in February. Economists expected a bigger surplus of EUR26 billion.
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Iraqi government troops were digging into the town of Khaldiya as they tried to prevent further advances by Islamic State forces in the western province of Anbar after the extremist militia captured its capital at the weekend. Security forces, backed by local militiamen and US-led warplanes, were engaged in fierce fighting against the jihadists near Khaldiya, about 30 kilometres east of Ramadi, which fell to Islamic State forces Sunday, according to Majeed al-Fahdawi, a leader of Anbar's Bufahd tribe.
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Related Shares:
Booker GroupBPNational GridDairy CrestJust EatSSP GroupInchcapeSmiths GroupRMG.LUnited Utilities