2nd Mar 2016 11:16
LONDON (Alliance News) - The following is a summary of top news stories Wednesday.
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COMPANIES
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ITV said it expects "another good year" in 2016, after it reported a rise in pretax profit for 2015, increased its regular dividend, and announced a bigger special dividend as well. ITV proposed a final dividend of 4.1 pence per share, taking its total dividend for 2015 to 6.0p, up from 4.7p in 2014. Additionally, it plans a 10.0p per share special dividend, ahead of the 6.25p special dividend it paid in 2014, which ITV said reflects its strong cash generation and confidence in its business. ITV reported a pretax profit of GBP641 million in 2015, up from GBP605 million the year before, on revenue of GBP2.97 billion, up from GBP2.59 billion.
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Rolls-Royce Holdings granted activist investor ValueAct Capital a seat on its board as the engine maker pushes forward with is massive restructuring. San Francisco-based ValueAct has built up a stake of around 11% in Rolls-Royce, starting in the middle of 2015, following the slew of profit warnings the company has issued. It has been pushing for a seat on the board to better influence future strategy and won that battle on Wednesday when Bradley Singer, a ValueAct partner and chief operating officer, was appointed as a non-executive director.
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SABMiller confirmed Anheuser-Busch InBev is selling SAB's 49% interest in its Chinese joint venture, China Resources Snow Breweries Ltd to China Resources Beer for USD1.60 billion. CRB already owns the remaining 51% of the joint venture. SABMiller said the sale is in line with AB InBev's commitment to address potential regulatory concerns relating to the GBP71 billion takeover of Anglo-African SABMiller by its Belgian-American rival. The transaction is expected to close in conjunction with the completion of the takeover, which is currently anticipated to occur in the second half of 2016.
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Michael Dobson is set to step down as the chief executive of blue-chip fund manager Schroders this week after more than 14 years running the business, the Financial Times reported. Peter Harrison, the head of investment at Schroders, will take over from Dobson, according to people familiar with the matter. He had been widely-tipped as Dobson's heir after being appointed to the board in 2014, the FT said. Dobson's departure is expected to be announced on Thursday alongside Schroders' 2015 results.
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Intertek Group booked a big impairment charge in its 2015 results related to the weakness of the oil and gas industry, causing the testing, inspection and certification services company to swing to a significant loss. the FTSE 100-listed group said its pretax loss for the year to the end of December was GBP307.7 million, swung from a GBP252.2 million profit a year earlier. The loss was driven by a GBP577.0 million non-cash impairment charge Intertek booked on past acquisitions as a result of the continued difficulties facing its oil and gas-related businesses.
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Specialty chemicals company Johnson Matthey said Den Jones will step down from his role as finance director this summer. The company said Jones will step down for personal reasons and following a mutual agreement with Johnson Matthey. The company said the process of recruiting his successor has started and an appointment will be announced in due course. It expects the process to be completed by the time Jones steps down in the summer.
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Virgin Money Holdings said its pretax profit surged in 2015 as it performed ahead of the wider market on core mortgages, savings and credit card growth. In it first set of full-year results since floating in late 2014, the lender said its pretax profit for the year to the end of December increased to GBP138.0 million from GBP34.0 million a year earlier, helped by higher income and one-off costs it booked the year prior on its listing in London and the acquisition of mortgage lender Northern Rock. Virgin Money will pay a final dividend of 3.1 pence per share, taking its total dividend payout to 4.5p.
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Funeral services provider Dignity swung to a pretax profit in 2015 due to financing costs not repeating, though its revenue and underlying results were robust without the one-off boost. Pretax profit for the FTSE 250-listed company was GBP69.0 million, compared to a GBP67.7 million loss a year earlier when Dignity booked significant costs related to its refinancing. Underlying pretax profit, stripping out one-offs, rose to GBP72.2 million from GBP58.5 million. Revenue increased to GBP305.3 million from GBP268.9 million, up 14%, as deaths in the UK rose 7.0% year-on-year to 588,000, the largest growth in the country's death rate for 60 years.
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Stagecoach Group said it is on track to meet its expectations for the financial year ending April, with revenue growth in its UK rail and regional bus businesses coming in lower for its second half, as predicted in its interim statement. The transport company reported weaker revenue growth from its UK regional bus and rail businesses during the second half, which meant like-for-like revenue growth in its financial year to February 6 was 0.7% for its regional bus division and 4.6% for its UK rail division. This is in line with trends reported in November by Stagecoach, when it downgraded its adjusted earnings per share guidance for the full year. Stagecoach said that since then its expectation "has not significantly changed".
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Discount retailer Poundland Group named Kevin O'Byrne as chief executive to succeed current CEO Jim McCarthy, who is retiring. O'Byrne will begin his role as chief executive designate on April 4 and will then become CEO on July 1. He was previously a director at electronics retailer Dixons Retail, now Dixons Carphone, and at DIY retailer Kingfisher, where he was CEO of B&Q UK and Ireland. McCarthy has been CEO of Poundland since 2006.
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Low-cost airline Wizz Air Holdings reported growth in passenger numbers and load factor in February, year-on-year. The Central and Eastern European-focused carrier said its load factor increased by 2.6 percentage points in February to 86.4% from 83.7%, as the number of passengers carried grew 22% to 1.4 million from 1.2 million.
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Darty confirmed it has received a competing takeover proposal to one it agreed with French electronics retailer Groupe Fnac SA late last year, from household goods retailer Conforama Investissement SNC. Conforama operates in Europe and is owned by South African-based furniture chain Steinhoff International Holdings NV Group. It has proposed to acquire the electrical goods retailer at an offer of 125 pence per share in cash.
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Entertainment One said trading was in line with expectations in the first nine months of its financial year. The entertainment company, which produces television and film content, said underlying earnings before interest, tax, depreciation and amortisation was 15% higher in the nine months to December 31, year-on-year, reflecting a strong performance in Television and from acquisitions, partly offset by weaker trading in Film.
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Specialty chemicals company Synthomer posted pretax profit growth for 2015 despite revenue falling, thanks to favourable conditions for its nitrile business in Asia and cost-cutting. Pretax profit rose to GBP95.3 million from GBP86.0 million, despite revenue falling 9.7% to GBP894.0 million from GBP894.0 million. A weak Europe and North America divisional performance weighed on the results, but the good conditions in the high-margin Asian nitrile business and cost cuts made across the business helped keep profit healthy.
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MARKETS
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UK indices were mixed with ITV among the biggest blue-chip losers. The pound was flat against the dollar after disappointing UK construction PMI data. Wall Street was pointed to a lower open.
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FTSE 100: up 0.1% at 6,156.51
FTSE 250: flat at 16,790.22
AIM ALL-SHARE: down 0.1% at 696.43
GBP: firm at USD1.3965 (USD1.3928)
EUR: flat at USD1.0860 (USD1.0851)
GOLD: down at USD1,230.34 per ounce (USD1,233.30)
OIL (Brent): flat at USD36.43 a barrel (USD36.47)
(changes since previous London equities close)
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ECONOMICS AND GENERAL
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British construction activity expanded at the weakest pace in ten months in February, defying economists' expectations for a modest improvement, survey data from Markit Economics and the Chartered Institute of Procurement & Supply showed. The Markit/CIPS UK Construction Purchasing Managers' Index fell to 54.2 in February from 55.0 in the previous month.
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The UK government is stepping up its warnings over the dangers of leaving the EU, with a fresh analysis by officials concluding that any of the alternative arrangements for relations with Europe would leave Britain worse off. The paper, which looks at arrangements adopted by Norway, Switzerland and Canada as well as the option of falling back on World Trade Organisation rules, is expected to say each would carry serious risks if they were adopted by the UK. Foreign Secretary Philip Hammond said the "hard-headed analysis" showed it was working people who would pay the price, with lost jobs and higher prices, if the country votes for "out" in the referendum on June 23.
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UK shop prices declined for the thirty-forth consecutive month in February, British Retail Consortium said. Shop prices declined 2% year-on-year in February, faster than January's 1.8% fall. Food prices returned to deflationary territory, falling 0.4% in February reversing a 0.1% rise in January. Meanwhile, non-food deflation remained at 3% for the third straight month. "With consumer confidence falling back and wage growth remaining subdued, retailers continue to support their customers with prices and promotions to maintain market share in the tough trading environment," BRC Chief Executive Helen Dickinson said.
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China's credit rating outlook was downgraded by Moody's, premised on weak fiscal metrics, a fall in reserve buffers and uncertainty about the government's ability to implement reforms. Moody's Investors Service lowered the outlook to 'negative' from 'stable', while affirming the government bond ratings. The sizeable foreign exchange reserve buffers give the authorities time to implement reforms and gradually address imbalances in the economy. This underpins the decision to retain its Aa3 rating, Moody's said.
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Super Tuesday could be summed up this way: It delivered clear victories for the front-runners and slivers of hope for the losers. The biggest day thus far in the US presidential campaign saw Hillary Clinton, the Democratic favourite, and Donald Trump, the leading Republican, make big strides toward their goal of becoming their party's nominee to run for president in November's general election. But their rivals performed well enough to postpone tough decisions about any of them leaving the race, at least until after the primaries in other large states later in March.
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By Arvind Bhunjun; [email protected]; @ArvindBhunjun
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