29th Apr 2016 10:03
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 said its first-quarter net loss widened after paying a fee to the UK government that will eventually allow the state-backed lender to resume dividends. RBS's net loss, which included a GBP1.19 billion payment to the government to retire the so-called dividend access share, amounted to GBP968 million in the three months ended March 31, the lender said in a statement, widening from the GBP459 million net loss the corresponding quarter a year earlier. First-quarter pretax profit jumped to GBP421 million from GBP37 million. The results come after RBS on Thursday warned there is a significant risk it will miss a deadline by which it must sell the UK retail branch network known as Williams & Glyn.
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Drugmaker AstraZeneca reiterated its full-year guidance for 2016 at constant currency, as it said revenue rose 5% in the first quarter on a constant currency basis, driven by a significant increase in externalisation revenue. The company also outlined a cost cutting plan, with an aim to create benefits of USD1.1 billion by the end of 2017, at the cost of one off USD1.5 billion in restructuring charges, as it looks to increase its investment in its oncology business. AstraZeneca reported a pretax profit of USD723 million for the quarter, up from USD678 million the year before, as revenue rose at actual exchange rates by 1.0% to USD6.12 billion from USD6.06 billion a year before.
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Education company Pearson reiterated its guidance for 2016, as it said it continued to trade in line with expectations in the first quarter of the year, seeing underlying sales decline by 4%. In a statement ahead of its annual general meeting, Pearson said it continues to expect an adjusted operating profit and adjusted earnings per share before restructuring costs of between GBP580 million and GBP620 million and between 50 pence and 55 pence, respectively, for the full year. The company said its sales were down 4% in the first quarter in underlying terms, hit by weakness in assessment revenues in the US and UK. Revenue was down 9% at constant currency, it said, hit by a change in the revenue model at its Connections Education business.
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International Consolidated Airlines Group said it swung to a pretax profit in the first quarter of 2016, boosted by growth in traffic, passenger numbers and revenue. However, IAG warned that the impact on travel of the Brussels terror attack has continued into the second quarter. IAG - which owns British Airways, Ireland's Aer Lingus, and Spanish carriers Iberia and Vueling - said it made a pretax profit of EUR124 million in the three months to March 31, having suffered a EUR37 million pretax loss in the first quarter of 2015. Revenue grew to EUR5.08 billion from EUR4.71 billion, boosted by 14% growth in traffic measured in revenue passenger kilometres, and a 22% rise in passenger numbers.
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Anheuser-Busch InBev said it has offered to divest the entirety of SABMiller's assets in Eastern and Central Europe in order to address potential regulatory concerns related to its takeover of SABMiller. The businesses comprise Dreher Breweries in Hungary, Kompania Piwowarska in Poland, Plzensky Prazdroj and Pivovary Topvar in the Czech Republic and Slovakia, and Ursus Breweries in Romania. The move comes after AB InBev agreed earlier this month the sale of SABMiller's Peroni, Grolsch and Meantime brands to Japan's Asahi for EUR2.55 billion.
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Restaurant Group warned on profit for its full financial year after experiencing a "deterioration in trading conditions" which will lead to a fall in full-year like-for-like sales, as it revealed the resignation of its chief financial officer. The restaurant operator, which runs the Frankie & Benny's, Chiquito and Garfunkel's chains, said it is continuing to see a deterioration in trading conditions in financial 2016 so far, particularly in the leisure business, which it had warned about with the release of its financial 2015 results last month.
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Actuators manufacturer Rotork said favourable exchange rates and acquisition contributions drove up revenue and order intake in its first quarter, and announced the purchase of valve gearbox manufacturer Mastergear for USD25.0 million. Rotork said its order intake rose 2.5% over the period from the start of 2016 to April 3, on a quarter-on-quarter basis, whilst revenue rose 0.7%. Rotork said it benefited from favourable exchange rates, which contributed 3.1% to order intake and 3.0% to revenue, and its acquisitions contributed 8.4% to order intake and 9.2% to revenue.
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Ophir Energy said talks with Schlumberger over the Fortuna floating liquefied natural gas project in Equatorial Guinea have been terminated. Ophir said that despite Schlumberger completing technical due diligence, the two companies were unable to complete the transaction on terms agreed in the heads of terms, and as such, talks between the two were terminated. In January, the company had struck a deal for Schlumberger to take a 40% stake in the Fortuna project as its upstream partner. Ophir currently has an 80% working interest in Fortuna.
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MARKETS
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London markets were trading lower, following a sell-off on Wall Street on Thursday and amid some big decliners in the FTSE 100 and FTSE 250. US shares took a late-session hit, led by iPhone maker Apple after billionaire investor Carl Icahn said he offloaded his stake. In London, blue chips IAG and lender RBS were down, while mid-cap stocks Restaurant Group and Ophir Energy both lost around a fifth of their value. In New York, the Dow 30 and S&P 500 were both called up 0.1%, while the Nasdaq 100 was seen flat.
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FTSE 100: down 0.6% at 6,285.5
FTSE 250: down 0.5% at 16,990.65
AIM ALL-SHARE: down 0.5% at 3,447.75
GBP: down at USD1.4582 (USD1.4586)
EUR: up at USD1.1384 (USD1.1318)
GOLD: up at USD1,275.00 per ounce (USD1,264.30)
OIL (Brent): up at USD48.03 a barrel (USD47.60)
(changes since previous London equities close)
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ECONOMICS AND GENERAL
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UK mortgage approvals declined to a 3-month low in March, while secured lending and consumer credit expanded strongly, the Bank of England reported. The number of mortgages approved in March fell unexpectedly to 71,357 from 73,195 in February. It was forecast to rise to 74,200. Total lending to individuals increased by GBP 9.3 billion in March, much bigger than a GBP 5 billion rise seen in February.
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Consumer confidence in the UK worsened more-than-expected in April, after remaining steady in the previous month, survey data from Gfk showed. The consumer confidence index dropped to -3 in April from 0 in the preceding month. Economists had expected the index to fall to -1. Households' expectations regarding the general economic situation of the country over the next twelve months slid by 2 points to -14 in April.
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Motorists have been warned that the UK bank holiday getaway will add around 25% to normal traffic levels from 3pm until early evening on Friday. Drivers should delay their journeys until after 7pm to avoid the expected surge in congestion, according to the AA. Some main routes in and around London and the South East could experience a 50% increase in regular Friday late afternoon traffic, the motoring organisation said. It expects 10 million motorists to take to the road at some point over the weekend - around a third of all licence holders.
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The euro area economic growth accelerated more than expected in the first quarter, preliminary data from Eurostat showed. Gross domestic product climbed 0.6% from prior quarter, following a 0.3% rise in the fourth quarter. Economists had forecast the growth rate to improve marginally to 0.4%. On a yearly basis, GDP growth remained at 1.6%, while it was forecast to ease to 1.5%.
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