9th Dec 2015 11:20
LONDON (Alliance News) - The following is a summary of top news stories Wednesday.
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COMPANIES
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Industrial equipment rental company Ashtead Group said its pretax profit and revenue both surged in the first half with good performances from its US and UK divisions, prompting a 33% hike to its interim dividend and the company to say its full-year results should beat its previous expectations. Ashtead said its pretax profit for the half to the end of October rose to GBP176.5 million from GBP141.7 million a year earlier, as total revenue rose to GBP648.9 million from GBP529.4 million. Ashtead lifted its interim dividend 33% to 4.00 pence per share from 3.00p a year earlier.
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RSA Insurance Group said it has signed a deal to sell its majority shareholding in Russian joint venture Intouch Insurance for GBP5.0 million in cash. RSA will sell its 75% stake in the venture to Blagosostoyanie, a Russian pension fund.
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FirstGroup said it has been awarded the TransPennine Express rail franchise until 2023 by the UK's Department of Transport, covering the north of England and into Scotland. Over the life of the expanded franchise, which FirstGroup said is a key component of UK Chancellor George Osborne's push to create a so-called 'Northern Powerhouse' in order to shift the balance of power away from London, more than GBP500.0 million will be invested in the franchise, including a large increase in the number of carriages which will drive capacity up by around 80% at peak times.
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Rival Go-Ahead Group expressed its disappointment at having not won either the TransPennine Express franchise nor the Northern franchise, which was awarded to Arriva Rail North. Go-Ahead had bid for both franchises through its joint venture with Keolis, the French transport group.
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Transport operator Stagecoach Group said its pretax profit dipped in the first half despite higher revenue, and it issued a cautious outlook for the second half, downgrading its full-year guidance. Stagecoach said its pretax profit for the half to the end of October fell to GBP90.8 million from GBP98.3 million, mainly due to higher one-off financing charges in the half. Stripping out the one-offs, pretax profit rose to GBP121.5 million from GBP108.6 million. Stagecoach will pay an interim dividend of 3.5 pence per share, up from 3.2p a year earlier. The stock dropped 14% on the cautious outlook.
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Construction and support services company Carillion said it remains on track to meet its expectations for 2015 and said it has secured around GBP1.0 billion in new business. The group said its revenue and operating profit growth should hit its expectations for the full year, with secured orders and probable orders for the year expected to remain strong at around GBP17.0 billion at year end, down slightly from GBP18.6 billion at the same point a year ago.
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Construction and infrastructure group Balfour Beatty said it has made progress on its restructuring programme and has won new contracts, along with agreeing a new financing facility. Balfour said it has won new contracts on improved terms and said its order book in the second half of 2015 is broadly flat on the first. It added it remains focused on managing troublesome past contracts through to completion. The company also has agreed a new GBP400.0 million syndicated revolving credit facility, refinancing its existing facilities and extending the maturity to 2018, with the option to be extended up to 2020.
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Petra Diamonds said it has sold the "exceptional" pink diamond that was recovered from the Williamson mine in Tanzania for GBP10.1 million. The FTSE 250-listed miner discovered the 23.16 carat pink diamond back in November, and at the time said it was the "most significant recovery" made by Petra at the Williamson mine to date. Petra has sold the pink diamond as a rough stone, with the sale price equating to GBP433,938 per carat. However, Petra has also retained a 20% interest in the sales proceeds from the sale of the polished pink diamond.
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MARKETS
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UK indices were trading mixed as Ashtead led blue-chip gainers, up 8.1%, after it said its full-year results should beat its previous expectations, while Anglo American mined new record lows, down 11%, still reeling after the market reacted badly to its announcements on Tuesday. Wall Street was pointed to a slightly lower open.
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FTSE 100: down 0.3% at 6,117.35
FTSE 250: down 0.4% at 17,130.36
AIM ALL-SHARE: up 0.1% at 737.05
GBP: up at USD1.5069 (USD1.4998)
EUR: up at USD1.0933 (USD1.0876)
GOLD: up at USD1,079.00 per ounce (USD1,074.56)
OIL (Brent): flat at USD40.65 a barrel (USD40.75)
(changes since previous London equities close)
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ECONOMICS AND GENERAL
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Chinese inflation rose by more than expected in November suggesting that measures taken to boost economic growth are beginning to spur domestic demand. Consumer prices rose 1.5% year-on-year in November, faster than the 1.3% growth seen in October, as both food and non-food price inflation picked up, the National Bureau of Statistics said Wednesday. Inflation also exceeded the expected rate of 1.4%. Despite the acceleration, overall inflation remains well below the government's full year target of around 3%.
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Another report from the NBS showed that Chinese producer prices recorded their 45th consecutive month of decline in November. The producer price index slid 5.9% annually, the same rate of decline as seen in October. Economists had forecast a 6% fall for November.
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Core machine orders in Japan surged 10.7% on month in October, the Cabinet Office said - worth JPY903.8 billion. The headline figure blew away forecasts for a decline of 1.5% following the 7.5% jump in September. On a yearly basis, core machine orders advanced 10.3% - also exceeding expectations for an increase of 0.6% following the 1.7% contraction in the previous month.
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Britain's economic growth improved slightly in three months to November, the National Institute of Economic and Social Research said. The think tank said monthly estimates of gross domestic product suggested a 0.6% rise in output during three months ending November, which was slightly faster than a 0.5% increase seen in three months to October. This implies an annual growth rate of 2.2% for the three months to November, compared with 2.3% from the three months to October. According to the latest projection of NIESR, GDP will rise 2.4% per annum in 2015 and 2.3% in 2016.
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The UK economy is set to continue moderate growth, mostly driven by strong expansion in the service sector and consumer spending, the British Chambers of Commerce said in a report, as it trimmed its growth forecast, citing weak trade and manufacturing activity. Gross domestic product is forecast to grow 2.4% this year instead of 2.6%, the business lobby said in its latest Economic Forecast. The projection for next year was lowered to 2.5% from 2.7%. For 2017, growth is projected to be 2.5% compared to previous forecast of 2.7%.
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Germany's exports declined by more than expected in October and imports logged its biggest fall since 2012, reflecting a weak start to the fourth quarter. Exports fell 1.2% in October from September, when they advanced 2.6%, figures from Destatis revealed Wednesday. Shipments were expected to fall 0.6%. Likewise, imports declined 3.4% in contrast to September's 3.8% increase. This was the biggest fall since April 2012, when shipments slid 3.5%. Economists had forecast a 1% drop for October.
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The US was set to increase its scrutiny of inbound travellers from countries on the visa waiver programme, under a measure passed by the House of Representatives aimed at improving detection of potential terrorists. The legislation, which still has to pass the Senate, would impose additional reporting obligations on the countries on the programme, and extra screening of travellers who have been to Iraq or Syria.The congressional action reinforces administrative steps announced last week by President Barack Obama to strengthen the visa waiver programme following the November terrorist attacks in Paris.
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US presidential candidate Donald Trump was condemned by a chorus of critics from around the world responding to his call for a ban on Muslims entering the US. Republican Party leaders from US House of Representatives Speaker Paul Ryan to former vice president Dick Cheney distanced themselves from the billionaire businessman, who is the frontrunner among 14 Republicans actively seeking the conservative party's 2016 nomination.
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French Foreign Minister Laurent Fabius, who is overseeing climate talks at a global summit in Paris, called Tuesday for ministers to put forward another draft agreement. He said ministers should have the next draft ready by 1pm Wednesday to use the final hours before a Friday deadline to hammer out lasting points of contention. The draft will be shorter and have few options to be decided on, reflecting two days of ministerial level talks aimed at bringing the deal forward.
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By Arvind Bhunjun; arvindbhunjun@alliancenews.com; @ArvindBhunjun
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