12th Aug 2015 10:08
LONDON (Alliance News) - The following is a summary of top news stories Wednesday.
----------
COMPANIES
----------
Pearson said it has struck a deal to sell its 50% stake in The Economist Group for GBP469 million in cash to Exor SpA, the investment vehicle run by Italy's Agnelli family, and to The Economist publisher itself. The sale comes after the FTSE 100-listed education and publishing company announced the sale of the Financial Times Group, which includes the Financial Times Newspaper, to Japanese media group Nikkei Inc for GBP844 million in cash last month, as part of its efforts to focus on its education business. Under the deal, Exor will acquire 27.8% of The Economist Group's shares for GBP227.5 million, along with all of the B special shares for GBP59.5 million from Pearson. In addition, The Economist Group will acquire the rest of Pearson's shares for GBP182 million.
----------
The UK's competition regulator has found that consumer goods company Reckitt Benckiser Group acquisition of the K-Y personal lubricants brand could lead to a lessening of competition in competition and will force Reckitt to licence the K-Y brand to a UK competitor for eight years. The final report from the Competition and Markets Authority backs the provisional findings it published back in May, when it said Reckitt's acquisition of the brand from US healthcare giant Johnson & Johnson, agreed in March 2014, to be merged with its existing Durex brand, would lead to a substantial reduction in competition in the personal lubricants market, potentially through higher prices, meaning customers buying the products would be worse off.
----------
Outsourcing firm G4S said its pretax profit fell in the first six months of 2015 on the back of restructuring and impairment charges, but its revenue edged higher despite a decline in the UK and Ireland. The group said its pretax profit fell to GBP70 million in the first six months of the year, down from GBP80 million a year earlier as a rise in revenue was offset by restructuring charges and goodwill impairments it booked in the half. G4S said it would pay an interim dividend of 3.59 pence per share, up 5% year-on-year.
----------
The size of the bids set to be tabled for Tesco's Dunnhumby data analysis business are set to be slashed after those interested in acquiring the unit found it was less profitable than initial forecasts, the Financial Times reports. Dunnhumby was put up for sale by the retailer earlier this year with a price tag of up to GBP2 billion, but the FT, citing two people familiar with the auction, said bidders are now understood to be considering offers of around GBP700 million, having found the business was less profitable than thought.
----------
Construction and support services company Balfour Beatty scrapped its interim dividend as it posted a substantially wider pretax loss for the first half of 2015 thanks to writedowns of onerous contracts in its UK construction arm. The group said its pretax loss for the six months to the end of June was GBP150 million, sharply wider than the GBP58 million loss it posted a year earlier. As a result of the drop in profit, the company said it won't pay an interim dividend, having paid 5.6 pence per share a year earlier.
----------
Construction and support services company Interserve posted a rise in half-year profit on the back of robust revenue growth and a stronger order book at the end of the period, though it expects its UK support services business to see margins squeezed by the UK's new National Living Wage. The company said its pretax profit for the six months to the end of June was GBP33.7 million, up 19% on the GBP28.3 million it posted a year earlier, as revenue increased by 16% to GBP1.60 billion from GBP1.37 billion.
----------
Zoopla Property Group said its UK estate agency membership returned to growth in the first four months of its current financial year and said the uSwitch price comparison business it acquired earlier in 2015 is trading well. The property portal said it added 213 net new branches to its UK agency membership in the period from April 1 to July 31, returning to growth after having taken a hit from the launch of OnTheMarket.
----------
Galliford Try said its facilities management business has secured a place on the new Crown Commercial Services Facilities Management Framework. Galliford said its Galliford Try Facilities Management unit, via a joint venture with OCS Group UK Ltd, has been appointed to the Total Facilities Management lot of the framework under the moniker Sigma Support Services. That part of the framework will be offering work of up to GBP3 billion. Without OCS in tow, Galliford Try Facilities Management separately has been appointed to the Hard Facilities Management portion of the framework, which is worth up to GBP500 million.
----------
Telecommunications and IT services company Colt Group said its takeover by US financial services company Fidelity has been declared unconditional after the bidder secured enough support for the offer. FMR LLC and FIL Ltd will acquire Colt in a 190 pence per share deal, valuing Colt at around GBP1.72 billion. The bidder said it has now secured acceptances from shareholders representing a total of 89.9% of Colt's issued share capital, including shares Fidelity already owned.
----------
Centamin said its pretax profit rose in its second quarter and the first half of 2015, leading the company to increase its interim dividend by 11%. The gold miner with its flagship Sukari gold mine in Egypt reported a pretax profit of USD18.8 million in the second quarter of 2015, rising from USD11.3 million in the same period a year earlier, as revenue rose to USD124.2 million from USD102.6 million. Centamin raised its interim dividend to 0.97 cents per share from 0.87 cents a year earlier.
----------
MARKETS
----------
UK stocks are incurring heavy losses mid-morning following a second devaluation of the yuan by Chinese authorities in as many days.
----------
FTSE 100: down 1.4% at 6,572.02
FTSE 250: down 1.3% at 17,429.68
AIM ALL-SHARE: down 0.5% at 750.38
----------
The pound trades flat after initially sinking against the dollar after data showed that the UK unemployment rate rose unexpectedly in the second quarter and total wage growth slowed.
----------
GBP: flat at USD1.5567
EUR: up at USD1.1133
GOLD: up at USD1116.24 per ounce
OIL (Brent): up at USD49.52 a barrel
(changes since end of previous GMT day)
----------
ECONOMICS AND GENERAL
----------
UK jobless claims declined unexpectedly in July, data from the Office for National Statistics showed. The number of people claiming unemployment benefits declined by 4,900 in July from June, while it was expected to rise by 1,000. The claimant count rate held steady at 2.3% as expected by economists. During April to June, the unemployment rate was 5.6%, compared to 5.5% in three months to March, but down notably from 6.3% in the same period of last year. There were 1.85 million unemployed people in April to June, 25,000 more than in January to March period.Average earnings including bonuses increased 2.4% from last year. Excluding bonus, pay climbed 2.8%.
----------
China's central bank devalued the yuan for the second time in two days, to aid a slowing economy. The People's Bank of China unexpectedly adjusted its daily reference exchange rate by a further 1.6%, setting it at 6.3306 to the US dollar. On Tuesday, the bank had cut the rate by 1.9%, triggering the biggest one-day slide in yuan value against the dollar since China unified official and market exchange rates in 1994. Addressing market concerns Wednesday, China's central bank said there was no basis for a sustained depreciation of the yuan given international and domestic economic conditions. The International Monetary Fund said Beijing's move to devalue the yuan was "a welcome step," to allow market forces to have a greater role in determining the exchange rate.
----------
China's industrial production and retail sales growth eased in July, providing broad signals that policies taken so far prove insufficient to achieve its GDP growth target of about 7%. According to data released by the National Bureau of Statistics, industrial production expanded 6% year-on-year in July, slower than June's 6.8% increase and the 6.6% rise forecast by economists. At the same time, retail sales growth slowed marginally to 10.5% from 10.6% in June. The growth rate was expected to remain unchanged at 10.6%.
----------
Greece and its creditors have struck a provisional deal on a new bailout for the near-bankrupt country, the two sides said Tuesday, with efforts underway to secure political backing for the agreement in the coming days. The breakthrough came after two weeks of intense negotiations on what Athens will have to do in return for the three-year bailout, which is expected to total between EUR82 billion and EUR86 billion. "What we have at the moment is a technical-level agreement reached by the staff of the [creditor] institutions and the Greek authorities," European Commission spokeswoman Annika Breidthardt said. "What we don't have at the moment is a political agreement."
----------
Germany is expected to give its official reaction to the new Greek bailout on Wednesday, a day after Chancellor Angela Merkel expressed her concerns to Greece's Prime Minister Alexis Tsipras about the plan by telephone, officials in Athens said. In the Tuesday call with Tsipras, Merkel proposed that cash-strapped Athens should be granted a bridging loan to cover urgent payments, so as to allow further work on the up-to-EUR86 billion rescue plan to proceed, the officials said. Merkel's call for a bridging loan is yet another sign that Germany thinks the rescue plan needs to be more comprehensive than it currently is.
----------
The leading economic index in the UK, which measures the future economic activity, decreased for the second straight month in June, the results of a survey by the Conference Board showed. The Conference Board leading economic index fell 0.2% in June, following a 0.4% fall in May. In April, the index had risen 0.3%.
----------
Eurozone industrial production declined more than expected in June, data from Eurostat revealed. Industrial production dropped 0.4% in June from May, when it decreased by revised 0.2%. This was the second consecutive fall in production. The decline for May was revised from the initial estimate of 0.4% drop. Economists has forecast a 0.1% fall.
----------
Militias loyal to exiled Yemeni President Abd Rabu Mansour Hadi said they were advancing on the key central Yemeni city of Ibb, a day after they claimed full control of Hadi's native Abyan province in the south. Sources in the Gulf-backed militias fighting the Iran-backed Houthi rebels said they had captured two districts neighbouring Ibb and were surrounding the city. Ibb residents told dpa that Houthi fighters and allied military units were present in force on the streets and said they feared clashes inside the city.
----------
Thirty-two people have been charged over an alleged scheme to use stolen, unpublished news releases to make millions on illegal stock trades, US authorities said. The US Securities and Exchange Commission said the alleged conspiracy netted 100 million dollars over several years and was one of the most intricate and sophisticated they had ever seen.
----------
By Arvind Bhunjun; [email protected]; @ArvindBhunjun
Copyright 2015 Alliance News Limited. All Rights Reserved.
Related Shares:
InterserveBalfour BeattyTescoPearsonCentamin PLCGalliford TryRB..LGFS.LZPLA.L