26th Feb 2016 11:16
LONDON (Alliance News) - The following is a summary of top news stories Friday.
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COMPANIES
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Royal Bank of Scotland Group reported its eighth consecutive annual loss, with the state-backed lender still suffering in 2015 from the 2008 financial crisis, with the extent of the clean-up meaning there will be some delay to returning excess capital to its shareholders. The Edinburgh-based bank's net loss narrowed to GBP1.98 billion in 2015 from GBP3.47 billion in 2014. Adjusted operating profit, which strips out restructuring and litigation costs, among other items, fell to GBP4.41 billion from GBP6.06 billion, due to lower income and asset disposals.
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Pearson said it swung to a loss in 2015 due to the huge restructuring it is undertaking to return itself to health, as sales also dipped in competitive markets and it said stability will start to return only by 2018. The education and publishing group said it swung to a pretax loss of GBP433.0 million for the year to the end of December, compared to a GBP255.0 million profit in 2014, primarily due to the one-off costs the group will book for the restructuring programme. Pearson said it will pay a final dividend of 34.00 pence per share, meaning its total dividend will edge up to 52.00p from 51.00p, in line with the level at which it set the payout when it outlined its restructuring plans last month.
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International Consolidated Airlines Group reported a more than doubling in profit in 2015, as revenue grew despite taking a small hit to sales in the fourth quarter following the terrorist attacks in Paris. The airline operator - which owns British Airways, Aer Lingus, and Spanish carriers Iberia and Vueling - said its pretax profit in 2015 grew to EUR1.82 billion from EUR828 million in 2014, as revenue rose by 13% to EUR22.86 billion from EUR20.17 billion.
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London Stock Exchange Group and Deutsche Boerse, the European exchanges which are in talks to merge, said the outcome of the UK's Brexit vote would not be a condition of a deal. The news came as the companies said a combined entity would be a UK PLC domiciled in London, with headquarters in London and Frankfurt. Deutsche Boerse Chief Executive Officer Carsten Kengeter would lead the combined entity, the companies said, taking the position of chief executive officer, with LSE Group Chief Executive Officer Xavier Rolet to step down on completion of a deal.
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BHP Billiton said progress has been made in its negotiations with Brazilian authorities on a settlement for the Samarco tailings mine dam burst. Responding to recent news reports that Brazilian authorities are seeking to substantially increase the value of a compensation settlement regarding the mine disaster, BHP said significant progress has been made in the negotiations and it was "hopeful" an agreement will be reached.
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Intu Properties returned to like-for-like rental income growth in 2015 following an improved performance in the second half, the Bluewater and Lakeside shopping centre owner said, though its pretax profit dipped due to lower total valuation gains made on its portfolio. The FTSE 100-listed group said its like-for-like rental income grew 1.8% in the year to the end of December, compared to a 3.2% decline a year earlier. The group expects this to continue in 2016, guiding to like-for-like rental growth of 2-3%.
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Sports Direct International said it will stop drawing down from its loan facility with Mike Ashley/Mash Holdings Ltd due to criticism it has received about related-party transactions and instead will solely use its revolving credit facility, which was recently increased to GBP788 million.
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Online property portal Rightmove appears to be unaffected by property portal OnTheMarket's bid to take a larger market share, and said its pretax profit was lifted in 2015 by higher revenue, driven by a strong audience growth and an increase in its average revenue per advertiser. The FTSE 250-listed company said its pretax profit was up 16% to GBP144.3 million in the year to the end of December, from GBP124.6 million in 2014, boosted by the 15% increase in revenue to GBP192.1 million from GBP167.0 million.
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William Hill reported a drop in profit in 2015, as revenue fell slightly following a tough comparative period which included the football World Cup and as it faced additional gambling duties in the UK, but increased its dividend payout ratio and announced a share buyback. The betting company said pretax profit in 2015 fell to GBP184.7 million from GBP233.9 million in 2014, as revenue decreased by 1% to GBP1.59 billion from GBP1.61 billion.
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Engineer IMI said its pretax profit and revenue fell in 2015, in line with the profit warning the group issued earlier in the year as it contended with tough markets. IMI said its pretax profit fell 34% to GBP163.0 million from GBP246.0 million a year earlier, as revenue declined 7.0% to GBP1.58 billion from GBP1.69 billion. IMI will hike its final dividend slightly to 24.5 pence from 24.0p, taking its total dividend up to 38.4p from 37.6p.
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MARKETS
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UK stock indices were in the green with Pearson and mining stocks among the risers. Brent oil rose above USD35 a barrel following reports of an upcoming meeting between major oil producers to curb global supplies. Wall Street was pointed to a higher open.
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FTSE 100: up 1.2% at 6,083.03
FTSE 250: up 0.8% at 16,535.31
AIM ALL-SHARE: up 0.1% at 689.88
GBP: flat at USD1.3936 (USD1.3940)
EUR: flat at USD1.1013 (USD1.1029)
GOLD: down at USD1,231.14 per ounce (USD1,237.46)
OIL (Brent): up at USD35.97 a barrel (USD33.75)
(changes since previous London equities close)
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ECONOMICS AND GENERAL
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UK export growth slowed at the end of 2015 on the face of considerable challenges, the latest quarterly International Trade Outlook report from the British Chambers of Commerce and DHL showed. Export sales and orders across manufacturing and services sectors fell significantly in the fourth quarter of 2015. The trade confidence index dropped by 2.5% in the fourth quarter from last year. Among manufacturers, the balance of firms reporting improvements in export sales dropped to 1% from 10%. Slowing growth in China and the US, along with the continued weakness in the Eurozone, have made it harder for firms to build momentum, John Longworth, BCC director general said.
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Consumer confidence in the UK deteriorated in February, the latest survey from GfK revealed on Friday as its index score fell to 0. That was shy of forecasts for +3 and down from +4, and it marks a 14-month low score for the index. "Despite the positive impact of continued low interest rates and subdued inflation on day-to-day household budgets, the feeble outlook for growth and a variety of economic uncertainties since the start of the year has depressed optimism," said GfK's Joe Stanton.
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The People's Bank of China has more monetary policy space and multiple instruments to address possible downside risks, Governor Zhou Xiaochuan said. He reiterated that there is no room for persistent renminbi depreciation. In the long-run, the exchange rate will reflect economic fundamentals, he noted. The economic growth remains relatively strong, Zhou said ahead of this week's G20 meeting in Shanghai. The central bank said foreign reserves will be maintained around appropriate and reasonable level.
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Home prices in majority of the Chinese cities increased at the beginning of the year, figures from the National Bureau of Statistics showed. On a monthly basis, new homes prices climbed 38 out of 70 cities surveyed by the government. Prices dropped in 24 cities but remained flat in eight cities.
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Overall nationwide consumer prices in Japan were flat on a yearly basis in January, the Ministry of Internal Affairs and Communications said. That was in line with forecasts and down from 0.2% in December. Core CPI also was flat, matching forecasts and down from 0.1% in the previous month. On a yearly basis, overall CPI was down 0.4% and core inflation slipped 0.7%.
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The US economy still needs support from the Federal Reserve, a top central banker said Thursday. The ongoing recovery requires a "gentle shove forward," according to San Francisco Fed President John Williams. Williams expects inflation to rebound toward the Fed's 2% target as the economy continues to improve. He anticipates 2.25% GDP growth this year. In terms of rate hikes, Williams expects "a gradual process".
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Republican presidential contenders Marco Rubio and Ted Cruz took aim at Donald Trump Thursday in the final debate before crucial primaries in a dozen states next week. They criticized the billionaire businessman for allegedly hiring illegal immigrants, failing to release his tax returns and shifting his positions on a variety of issues. Trump leads in national polls and is on top in most of the states that will vote next week on so-called Super Tuesday, which could give him the necessary momentum to become the Republican Party's candidate.
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A French court has given authorities the go ahead to clear part of migrant camps near Calais, evicting hundreds of people, ruling that only sites of public use could stay in place. The court in the northern city of Lille upheld an expulsion order issued by local authorities. The judge said that arguments presented by humanitarian groups decrying limited housing alternatives were outweighed by efforts made by local authorities and the state to provide sufficient accommodation.
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Football's beleaguered ruling body FIFA approved a wide-ranging reform package with an overwhelming majority of 89% to restore its credibility in the wake of corruption probes. With a 75% majority required, 177 approving voting members made up 89%, while 11 members opposed the reforms at an extraordinary FIFA congress. Acting FIFA president Issa Hayatou and reform commission chairman Francois Carrard had urged delegates to approve the reforms with major governance changes, term limits for top officials, greater transparency and bigger women's representation.
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By Arvind Bhunjun; [email protected]; @ArvindBhunjun
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