4th Aug 2015 10:07
LONDON (Alliance News) - The following is a summary of top news stories Tuesday.
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COMPANIES
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The UK government has sold a 5.4% stake in Royal Bank of Scotland Group for GBP2.08 billion, taking the milestone first step on the way to returning the bank to full private ownership six years after its GBP45.5 billion bailout during the global financial crisis. HM Treasury, which is the UK's economic and finance ministry, has sold 630 million ordinary shares at 330 pence each, leaving it with an overall 72.9% stake in RBS. It now controls 51.5% of the voting rights in the bank, compared with 61.3% before the sale. It said late on Monday it had expected to sell about 600 million ordinary shares.
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Standard Life said it expects a lower contribution to its results for 2015 from annuity new business in the wake of changes to UK pensions rules that mean retirees are no longer required to purchase them. The Edinburgh-based investments and savings company said it expects annuity new business to fall by about GBP10 million to GBP15 million in 2015. The news came as Standard Life reported assets under administration of GBP302.1 billion on the basis of continuing operations at the end of June, up from GBP296.6 billion six months earlier, driven by demand for investment products and services, as well as the GBP390 million acquisition of Ignis Asset Management in 2014. Standard Life increased its interim dividend by 7.5% to 6.02 pence.
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Direct Line Insurance Group improved its guidance for a key measure of underwriting profitability in 2015, as it recorded higher-than-expected reserve releases from prior years in the first half and reported improved profit figures. The motor and home insurer said it expects its combined operating ratio for 2015 to be in the range of 92% to 94%, an improvement on the previous guidance of 94% to 96%, assuming a "normal annual level" of home claims from major weather events of about GBP80 million. Pretax profit from continuing operations increased to GBP315.0 million in the half, compared with GBP211.7 million in the prior year period. Direct Line increased its interim dividend by 4.5% to 4.6 pence per share.
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Aerospace engineering company Meggitt said its pretax profit jumped in the first half of 2015 as revenue increased, though the company's order intake was weaker in the period. The group said its pretax profit for the half to the end of June was up to GBP115.8 million from GBP98.2 million, driven by a 10% rise in revenue in the half to GBP793.7 million from GBP718.9 million. The group said it would pay an interim dividend of 4.60 pence per share, up from 4.25p a year earlier.
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Builders' merchant and home improvement retailer Travis Perkins hiked its interim dividend by 20% on the back of a rise in profit driven by stronger revenue and robust like-for-like sales growth. But shares in the company sunk in morning trade amid concerns about its reliance on an improvement in market conditions in the second half and as its shares trade close to highs. The FTSE 100-listed company, which runs the Wickes DIY chain along with plumbing and heating and contract merchanting businesses, said its pretax profit for the six months to the end of June was GBP158.6 million, up from GBP153.7 million a year earlier.
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Mexico-focused precious metals miner Fresnillo said its gold and silver production both rose in the first half, but its pretax profit plunged as the prices for its metals dropped heavily. The company said its pretax profit for the six months to the end of June was USD136.1 million, sharply down from the USD208.2 million it posted a year earlier. The group's silver production in the half was up by 11% to 23.8 million ounces from 21.5 million ounces a year earlier, while gold production increased to 364,020 ounces from 265,670 ounces, up 37%. But Fresnillo said its realised price for silver fell by 18% in the half, while its realised price for gold was down 7.4%. On the back of the fall in pretax profit, Fresnillo said it will pay an interim dividend of 2.1 US cents, less than half the 5 cents it paid out a year earlier.
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US activist hedge fund ValueAct has emerged as a shareholder in engineering company Smiths Group, just days after it was revealed the fund had become the largest shareholder in Rolls-Royce Holdings, the Financial Times reports. ValueAct's holding in Smiths, which makes products including airport scanners and medical devices, is below the 5% threshold required for disclosure to the London Stock Exchange, the FT said.
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Just Eat reported growth in profit in the first half of 2015 and said it expects revenue for the full year to be higher than originally anticipated due to additional orders delivered by extra investment. The online takeaway company reported growth in pretax profit in the six months ended June 30 to GBP14.0 million from GBP8.6 million in the first half of 2014, as revenue rose to GBP107.8 million from GBP69.8 million.
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Rotork said its pretax profit and revenue both declined in the first half as the group continues to suffer the effects of the downturn in the oil and gas industry, and said it has struck a deal to acquire a unit of fellow UK-listed engineer Spirax-Sarco Engineering. Rotork said its pretax profit was down to GBP56.3 million from GBP61.5 million in the first half. Revenue declined to GBP274.2 million from GBP278.5 million, and order intake sunk 9.5% to GBP274 million from GBP302.7 million. Rotork increased its interim dividend payout by 1.6% to 1.95 pence per share.
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MARKETS
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UK stocks have reversed a lower open to trade slightly higher mid-morning with the resource sector rebounding somewhat from its recent losses
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FTSE 100: up 0.2% at 6,700.50
FTSE 250: up 0.2% at 17,700.35
AIM ALL-SHARE: up 0.2% at 753.23
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The pound trades flat against the dollar after initially falling sharply after the release of a weaker-than-expected UK construction purchasing managers' index score.
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GBP: flat at USD1.5584
EUR: up at USD1.0972
GOLD: up at USD1092.67 per ounce
OIL (Brent): up at USD50.24 a barrel
(changes since end of previous GMT day)
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ECONOMICS AND GENERAL
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UK construction sector growth slowed unexpectedly in July with business activity and incoming new work expanding at slower rates, survey results from Markit Economics showed. The Markit/Chartered Institute of Procurement & Supply construction Purchasing Managers' Index fell to 57.1 in July from June's four-month high of 58.1. It was forecast to rise to 58.5.
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UK house price growth accelerated as expected in July, after easing in the previous two months, data from the Nationwide Building Society showed. House prices rose 3.5% year-over-year in July, in line with expectations, faster than previous month's 3.3% climb. On a monthly basis, the house price index increased 0.4% in July, reversing a 0.2% fall registered in June. The figure was also matched with consensus estimate. "After moderating over the past twelve months, there are tentative signs that annual house price growth may be stabilising close to the pace of earnings growth, which has historically been around 4%," Robert Gardner, Nationwide's chief economist, said.
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Ireland's manufacturing sector continued to expand at a solid pace in July, as growth of output, new orders and employment accelerated, survey figures from Markit Economics showed. The seasonally adjusted Investec purchasing managers' index rose to 56.7 in July from 54.6 in the previous month. Any reading above 50 indicates expansion in the sector. The index remained above-50 for the twenty-sixth month running in July.
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US President Barack Obama unveiled the revised Clean Power Plan, a historic step in the Obama Administration's fight against climate change on Monday. Releasing the Plan along with Environmental Protection Agency (EPA) Administrator Gina McCarthy at the White House, Obama said "We have a moral obligation to leave our children a planet that's not polluted or damaged." He termed it as "the biggest, most important step we have ever taken" in tackling climate change.
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By Arvind Bhunjun; [email protected]; @ArvindBhunjun
Copyright 2015 Alliance News Limited. All Rights Reserved.
Related Shares:
Direct LineJust EatRBS.LTravis PerkinsSmiths GroupRotorkMGGT.LFresnilloRolls-RoyceSpirax-SarcoSL..L