3rd Feb 2016 11:14
LONDON (Alliance News) - The following is a summary of top news stories Wednesday.
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COMPANIES
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Hargreaves Lansdown missed analyst expectations as the fund supermarket's first-half pretax profit increase was held back by a lower margin on net revenue and by spending on staff and new business ventures. Pretax profit for the six months ended December 31 rose by 6.0% to GBP108.1 million year on year, missing analyst expectations of 110.9 million, while an increase in the company's interim dividend to 7.80 pence from 7.30p missed analyst forecasts of an 8.1p payment. Net revenue - stated after commissions and loyalty bonuses paid by the fund supermarket - rose by 10% to GBP158.8 million, boosted by 47,000 since new active clients since the start of the period, taking the total to 783,000. However, operating profit margins on net revenue weakened to 67.9% from 70.7%.
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Johnson Matthey said it remains on track to deliver full financial year results that will meet expectations after reporting a small drop in sales during the third quarter as markets remain challenging for some of its divisions. The speciality chemical company said group sales in the three months to the end of December totalled GBP736.0 million, representing a small 1% drop from the GBP745.0 million in sales reported a year earlier. Although overall sales fell year-on-year, sales from continuing businesses were up 3% year-on-year.
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Sky said it has invested GBP300,000 in sports fan engagement and marketing firm InCrowd. InCrowd was formed by the people behind Opta, the sports data group, and focuses on developing mobile applications offering real-time content, match analysis and interactive games to sports fans. Sky Sports, Sky's sports-focused channel portfolio, will work with InCrowd to explore new ways to delivering sports content to users.
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AstraZeneca said it has secured conditional marketing approval from the European Commission for Tagrisso, or osimertinib, tablets used in the treatment of lung cancer. Eligibility for using the Tagrisso treatment will be dependent on the mutation status of a patients' cancer, which will be validated using a diagnostic test or based on a tumour tissue sample or plasma.
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Severn Trent increased its full-year guidance for the amount it will make from outcome delivery incentives and said the rest of the business remains on track to meet expectations. The water and wastewater company serving the Midlands and Wales said the net reward from the outcome delivery incentives for the full year is now expected to be GBP15.0 million. Utility companies in the UK are issued penalties or rewards for meeting or failing to meet certain measures and targets.
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British Airways has threatened to pull most of its aircraft out of London City Airport should a new owner of the hub raise charges in order to cover the GBP2.0 billion it is like to pay for the site, the Financial Times reported. The airline, owned by IAG, is the largest carrier at London City Airport, transporting around 40% of the passengers going through the hub each year. Willie Walsh, chief executive of IAG, has expressed concerns about the GBP2.0 billion valuation put on the airport by its current US owner, which is seeking to sell the airport and has already attracted offers from at least three groups.
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Anglo-South African financial services group Old Mutual gave its backing to the takeover of Home Retail Group by J Sainsbury. Old Mutual Global Investors, the investment management arm of Old Mutual, owns a 3.6% stake in Home Retail. On Tuesday, Sainsbury's and Home Retail said they had agreed key financial terms for Sainsbury's to buy the Argos and Homebase owner in 161.3 pence per share deal. The deal includes a cash and share offer for Home Retail, plus a capital return to Home Retail shareholders from the sale of Homebase to Australia's Wesfarmers.
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Balfour Beatty said it has won a GBP245.0 million highways maintenance contract from Coventry City Council, Solihull Metropolitan Borough Council and Warwickshire County Council. The construction and infrastructure group said its Balfour Beatty Living Places unit will work with the three councils under the seven-year deal, under which it will be the single source provider for all three local authorities. The contract is extendible by three years.
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The delayed initial public offering of CYBG, the owner of the Clydesdale and Yorkshire retail banking brands in the UK, was priced at the lower end of the expected range amid volatility in financial markets, valuing the lender at GBP1.58 billion. At 180.0 pence per share, the IPO price was towards the bottom of the guided range of between 175.0p and 235p per share. However, the stock was trading up 4.4% at 188.0p in conditional dealings.
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MARKETS
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UK indices were trading lower with Hargreaves Lansdown leading decliners. The pound was up after positive UK services PMI data. Wall Street was pointed to a mixed open.
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FTSE 100: down 0.8% at 5,874.19
FTSE 250: down 0.6% at 16,204.71
AIM ALL-SHARE: down 0.1% at 693.18
GBP: up at USD1.4470 (USD1.4388)
EUR: up at USD1.0928 (USD1.0898)
GOLD: up at USD1,129.55 per ounce (USD1,125.76)
OIL (Brent): flat at USD33.24 a barrel (USD33.07)
(changes since previous London equities close)
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ECONOMICS AND GENERAL
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The UK service sector logged a further solid rate of expansion at the start of the year, underpinned by stronger inflows of new orders, survey figures from Markit Economics showed. The Chartered Institute of Procurement & Supply/Markit services Purchasing Managers' Index rose marginally to 55.6 in January from 55.5 in December. Meanwhile, it was forecast to fall to 55.4.
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EU President Donald Tusk offered London sought-after concessions in a proposal published Tuesday, opening the next round of negotiations with member states, in a bid to convince British citizens to vote in favour of continued EU membership. British Prime Minister David Cameron said the proposed reforms deliver "substantial change," while adding that "there's more work to do" before final agreement, in comments to the BBC. But proponents of a so-called Brexit - Britain's departure from the EU - slammed the measures.
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The National Institute of Economic and Social Research left its UK growth outlook for 2016 unchanged and raised its 2017 forecast marginally as the economy is likely to gain strength from foreign demand. The NIESR pushed back its forecast for the timing of the first interest rate hike as it now see tightening only after the UK referendum on membership of the EU. According to NIESR, the most likely time to begin raising the rate is the second half of 2016. The think tank maintained its 2016 economic growth estimate at 2.3%. Growth will accelerate again in 2017 as the improving external environment strengthens export demand. The outlook for 2017 was raised to 2.7% from 2.6% estimated in November.
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Shop prices in the UK were down 1.8% on year in January, the British Retail Consortium said. That follows the 2.0% decline in December. Individually, food prices were up 0.1% on year - rising for the first time since August. Food prices fell 0.3% in December. Non-food prices tumbled an annual 3.0% for the second straight month. "Higher levels of consumer confidence are currently translating into other parts of consumer spending - in leisure, entertainment and eating out - rather than into shopping which is providing the backdrop to a tough trading environment for retailers but great news for shoppers," said BRC chief executive Helen Dickinson.
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China's service providers experienced the fastest growth in six months in January but overall private sector activity was stable due to the ongoing contraction in manufacturing. The Caixin General Services Purchasing Managers' Index rose to 52.4, the highest level since July, from December's 17-month low of 50.2, survey results from Markit showed. The Composite Output Index came in at 50.1 in January, slightly above the neutral 50-point level and up from 49.4 in December.
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China has set a lower economic growth target of 6.5-7% for this year, National Development and Reform Commission Chairman Xu Shaoshi said. In 2015, the government targeted about 7% growth and the economy achieved 6.9% expansion, which was the least since 1990.
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Ireland's service sector activity expanded at the sharpest pace in more than nine-and-a-half years in January, survey figures from Markit Economics showed. The seasonally adjusted Purchasing Managers' Index, or PMI, climbed to 64.0 in January from 61.8 in December.
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US trade officials hope to sell lawmakers on a 12-nation Pacific trade pact that is to be formally signed in New Zealand on Thursday even as US elections look likely to delay congressional action. "Momentum for passage is growing," US Trade Representative Michael Froman told reporters, pointing to support from US business and agriculture groups for the Trans-Pacific Partnership. However congressional leaders have indicated they will put off a vote on the deal agreed among member countries last year until after November presidential and legislative elections.
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By Arvind Bhunjun; [email protected]; @ArvindBhunjun
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