23rd Sep 2015 10:18
LONDON (Alliance News) - The following is a summary of top news stories Wednesday.
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COMPANIES
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Engineer Smiths Group said an improvement in margins helped its profit to edge higher in the year to the end of July, despite revenue falling, though it said its results for the current financial year will be more second-half weighed than normal. The company said its pretax profit for the year was up to GBP459.0 million from GBP445.0 million a year earlier. The increase in profit was driven by a better operating margin in the year, up to 17.6% from 17.1%, which offset a 2% decline in revenue to GBP2.90 billion from GBP2.95 billion. Smiths will pay a final dividend of 28.0 pence per share, meaning its total dividend increases by 2% to 41.0 pence.
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Diageo said its new financial year has started well and that performance is in line with company expectations, although operating profit for the full year may decline if current exchange rates are maintained. The drinks giant, which is holding its annual general meeting Wednesday, said that volume has grown into the mid-single digits reflecting both improved volume growth trends and a weak comparative period at the start of the prior year. However, it warned that while it has continued to deliver a positive sales mix, price increases have been muted.
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United Utilities said current trading is in line with expectations but said its financial results in the first half of the financial year will be hit by compensation payments related to a water incident in August and restructuring costs. The water and wastewater firm said revenue in the first half of the financial year ended September 30 will be similar to the GBP859.0 million reported a year earlier, but warned its operating profit will take a GBP30.0 million hit in the period. In August, customers across Lancashire were forced to boil their water before consumption after routine tests at the company's Franklaw water treatment works in Preston detected small traces of cryptosporidium - a microscopic bug - in the water.
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Pharmaceuticals giant GlaxoSmithKline said its ViiV Healthcare HIV unit has received data from the STRIIVING study on its Triumeq treatment, which showed switching to a once-daily dose of the drug maintained HIV viral suppression in patients. ViiV said the Phase IIIb/IV study, studying the efficacy, safety and tolerability of switching from an antiretroviral therapy to the once-daily, fixed-dose dolutegravir-based Triumeq, met its primary endpoint of showing patients switching to the once-daily dose did not show any signs of decreased viral suppression.
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Aircraft services company BBA Aviation confirmed it has agreed a USD2.07 billion deal to acquire US rival Landmark Aviation and will launch a big rights issue of shares to fund the deal. The group said the deal will be funded by existing debt facilities and by raising around GBP748.0 million via a fully-underwritten rights issue, which will see it issue 562.3 million shares at 133.0 pence per share. BBA shares closed at 284.7 pence on Tuesday, meaning the rights issues comes at a significant discount to its current share price. BBA said the deal will be transformational for its business, increasing its Signature fixed-base operator unit's network to 133 locations in North America and 189 locations overall.
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Premier Oil said production is currently running above its full-year guidance, as it continues to focus on lowering costs and using its substantial hedging programme to battle the downturn in oil prices. The oil and gas producer said production since the start of 2015 has averaged 57,100 barrels of oil equivalent per day after the company completed its summer maintenance activities. The current production rate is above the company's full-year production guidance to average 55,000 barrels of oil equivalent per day, which excludes any production that may come from the Solan field in the UK North Sea, which is expected to begin producing later in 2015.
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On the Beach Group said it will raise GBP90.2 million in an initial public offering on the London Main Market, while investment company Axiom European Financial Debt Fund plans to raise GBP100 million in order to begin trading on the London Specialist Fund Market. On the Beach said it will place 52.2 million shares at a price of 184 pence each as part of the IPO. Of the GBP90.2 million raised after expenses, GBP6.4 million will be for the company while GBP83.8 million will be for the selling shareholders, comprising private equity firm Inflexion, the company's directors and members of the senior management team. Separately, Axiom European Financial Debt Fund, which is managed by Axiom Alternative Investments SARL, said it expects admission to occur in mid-October.
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MARKETS
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London stocks were trading higher, rebounding from heavy losses on Tuesday, shrugging off weak economic data from China.
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FTSE 100: up 1.3% at 6,015.65
FTSE 250: up 0.4% at 16,595.49
AIM ALL-SHARE: up 0.1% at 731.39
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GBP: down at USD1.5311
EUR: up at USD1.1138
GOLD: up at USD1125.40 per ounce
OIL (Brent): up at USD49.39 a barrel
(changes since end of previous GMT day)
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ECONOMICS AND GENERAL
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The Eurozone private sector growth eased slightly in September, flash data from Markit showed. The composite output index dropped to 53.9 from 54.3 in August. It was expected to fall to 54. The latest index nevertheless remained broadly in line with recent readings seen over the past eight months, and pushed the third quarter average to the highest seen since the second quarter of 2011, Markit said.
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Chinese manufacturing activity contracted the most in six-and-a-half years in September, as orders and production declined at faster rates. The flash manufacturing Purchasing Managers' Index fell to 47 in September from 47.3 in August, survey data from Caixin Insight Group and Markit showed. This was the lowest score in 78 months and was below the consensus estimate of 47.5. Moreover, a reading below 50 indicates contraction by the sector.
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China is ready to cooperate with the US on issues from cyber crime to the environment, President Xi Jinping told political and business leaders in Seattle. "We must read each other's strategic intentions correctly," and "stick to the right direction" in bilateral relations, he said. "We want to see more understanding and trust, less estrangement and suspicion, in order to forestall misunderstanding and miscalculation." Xi spoke before a banquet of more than 750 US and Chinese officials and business leaders at the start of an eight-day trip to the US.
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The European Commission is set Wednesday to crack down on 19 EU countries that have incorrectly implemented the bloc's asylum rules with the launch of 40 punitive proceedings, sources said. Faced with Europe's biggest influx of migrants and asylum seekers since World War II, member states have run afoul of EU requirements, such as the registration of immigrants and the processing of asylum applications in the first country where a person sets foot. Germany is among the countries that are set to face a so-called infringement procedure, the sources said on the condition of anonymity. Such a proceeding could ultimately result in hefty fines and the involvement of the EU's top court. The commission, the EU's executive body, is in charge of ensuring that the bloc's rules are implemented.
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Having spooked markets on Monday by tweeting about "price-gouging" in the pharmaceutical industry, US presidential candidate Hillary Clinton used a speech on Tuesday to outline a series of proposals to tackle the issue. On her official Twitter account Monday, Clinton cited a New York Times article which said the price of the AIDS drug Daraprim soared to USD750 a tablet from USD13.50 a tablet overnight. Turing Pharmaceutical, the company behind the drug, has since said it will cut the price of the drug following a wave of public anger over the move, mostly directed at Turing Chief Executive Martin Shkreli after he attempted to defend the price hike.
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A senior French prosecutor requested the dismissal of a case against IMF head Christine Lagarde, over a business arbitration when she was French finance minister, a news report said. Lagarde, 59, is under investigation for alleged negligence in connection with a EUR400 million state payout to businessman Bernard Tapie over the sale of his sportswear company Adidas. Prosecutors say that during mediation she pushed for a settlement that was far more than might have been decided by a court.
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By Arvind Bhunjun; [email protected]; @ArvindBhunjun
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