11th Jan 2017 11:14
LONDON (Alliance News) - The following is a summary of top news stories Wednesday.
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COMPANIES
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J Sainsbury reported growth in sales in the third quarter of its financial year boosted by a record Christmas week, and said it is well placed to "navigate the external environment" despite a "very competitive" market. The supermarket chain said total retail sales in the 15 weeks ended January 7 grew by 0.8% excluding fuel year-on-year, as like-for-like retail sales rose by 0.1% also excluding fuel. At Argos, the general retailer that Sainsbury's bought last year, total sales increased by 4.1% and like-for-like sales were up 4.0%, driven by the Black Friday sales event and Christmas trading. This means combined Sainsbury's and Argos like-for-like sales grew by 1.0% in the period. Sainsbury's said it had a record Christmas week, with over 30 million customer transactions at Sainsbury's and over GBP1 billion of sales across the group.
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Taylor Wimpey said it expects its profitability for 2016 to come in at the upper end of market consensus, after housing completions rose over the year. The housebuilder said it continued to see good demand for housing and solid trading into the second half of the year, ended December 31, with completion numbers rising by 4.0% year-on-year to 13,881 from 13,341 the prior year.
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Cobham said 2016 profit will miss its thrice-downgraded guidance and it will scrap its final dividend. The defence and aerospace technology groupsaid group trading profit for the year to December will be GBP245.0 million, below the guidance range of GBP255.0 million to GBP275.0 million that it provided in October. Cobham said its management team is starting a balance-sheet review, including looking at major contracts and carrying values. The profit guidance it provided on Wednesday is before any adjustments this review may require. In light of the challenges it faces and the "disappointing" 2016 performance, Cobham said it will scrap its final dividend payment for 2016. It paid a 2.030 pence dividend at the interim stage of 2016, down from 2.585p a year before. In 2015, it paid a total dividend of 11.180p.
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Ted Baker reported sales growth in the recent holiday season, adding it will end the year with a clean stock position and its gross margins remain on track. The fashion firm, which sells clothing and runs grooming salons, consistently reported growing sales in 2016 as it shrugged off issues that have hampered other the luxury goods industry. In the UK and Europe, the Brexit vote caused economic uncertainty and a spate of terror attacks in Europe over the course of the year discouraged tourism, a key demand driver for luxury goods companies. In North America, the retail market saw high levels of promotional activity and a fall in tourism as well. Slowing growth in China put pressure on Asian trading.
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Recruitment firm PageGroup said it increased gross profit over 2016 and expects operating profit to be towards the top end of market forecasts. PageGroup said it expects gross profit of GBP621.1 million for 2016, a 12% increase from GBP556.1 million in 2015, although just 3% in constant currency terms. The company also said it expects its operating profit to be towards the top end of the range of current market forecasts, which its own compiled figures put between GBP91.0 million and GBP100.6 million. The 2016 performance was aided by a strong fourth quarter, generating gross profit of GBP163.4 million, a 20% increase from GBP135.8 million in the same quarter in 2015, a 3.8% increase in constant currency. This came despite a 6.7% slump in UK gross profit in the quarter, hit by "uncertain market conditions".
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National Express Group said it has agreed to sell the c2c rail franchise in the UK to Trenitalia, the passenger rail transportation company arm of Italian transport company FS Italiane Group. The c2c franchise covers the rail line linking London to Southend and Tilbury in Essex. Trenitalia will pay around GBP70.0 million to acquire the franchise, resulting a "small" net profit for National Express, the UK public transport operator said. The deal remains subject to final approval from the UK's Department for Transport, expected in the next three to four weeks.
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Tullow Oil announced a series of leadership changes and said oil production from its assets in West Africa met its guidance for 2016. Tullow said Paul McDade, currently chief operating officer, will become chief executive after the AGM on April 26. Aidan Heavey, Tullow's CEO and founder, will become chairman, and Simon Thompson, the incumbent chairman, will step down at the same time. Heavey's appointment as chairman will be for a phased transition period of up to two years, starting after the AGM, Tullow said. The reshuffle was announced as Tullow said oil production from its assets in West Africa hit its guidance of 65,500 barrels of oil per day. The group expects its oil production from West Africa to rise in 2017 to 78,000 to 85,000 barrels a day.
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Cineworld Group reported growth in revenue in 2016 as it announced the appointment of a new chief financial officer. The cinema operator has promoted Nisan Cohen to CFO. Cohen has been part of the group for 16 years, serving as vice president of finance before working as deputy CFO. Interim CFO Dean Moore will now work as an independent non-executive director. Cineworld reported 13% growth in total revenue in 2016, meaning its overall full-year performance is expected to be line with current market forecasts.
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MARKETS
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London shares were mixed mid-morning, with Sainsbury's leading blue-chip risers as the FTSE 100 touched a fresh record intraday high of 7,293.26. US president-elect Donald Trump will hold his much-anticipated first press conference since July at 1600 GMT. Wall Street was indicated to a flat to higher open with the Dow 30 and NASDAQ Composite indices indicated up 0.1%.
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FTSE 100: up 0.2% at 7,291.37
FTSE 250: down 0.1% at 18,388.11
AIM ALL-SHARE: up 0.1% at 870.24
GBP: soft at USD1.2122 (USD1.2162)
EUR: soft at USD1.0516 (USD1.0577)
GOLD: firm at USD1,187.70 per ounce (USD1,187.33)
OIL (Brent): soft at USD54.05 a barrel (USD54.36)
(changes since previous London equities close)
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ECONOMICS AND GENERAL
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UK industrial production recovered at a faster than expected pace in November, data the Office for National Statistics revealed. Industrial output climbed 2.1% in November from October, when production eased 1.1%. Output was expected to rise 1%. Similarly, manufacturing output climbed 1.3% in contrast to prior month's 1% decrease. The 1.3% expansion was the biggest since April 2016 and better than the forecast of 0.5%. Year-on-year, industrial output rebounded 2% after falling 0.9% in October. This was the fastest growth since July and exceeded the expected 0.7% rise.
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The UK visible trade deficit widened more-than-expected in November, the Office for National Statistics reported. The trade in goods showed a deficit of GBP12.2 billion versus a shortfall of GBP9.9 billion in October. Economists had expected the deficit to rise to GBP11.5 billion. The deficit with EU countries rose to GBP8.6 billion in November from GBP7.6 billion in the preceding month. Similarly, non-EU trade deficit climbed to GBP3.6 billion from GBP2.1 billion. It was forecast to rise to GBP3.5 billion. At the same time, the surplus on services shrank to GBP8.0 billion from GBP8.3 billion.
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UK Labour leader Jeremy Corbyn has staged an embarrassing climbdown after his call for a maximum pay cap for high earners was branded "totally idiotic" by a former top economic adviser. The leader of the UK's opposition party said salaries paid to some company bosses and top footballers were "utterly ridiculous" and that he would like to see a cap to counter the soaring levels of income inequality. But after business leaders warned the proposal was a "non-starter", a spokesman said he "misspoke" after being asked about a "cap" during a radio interview. Corbyn later said a better way of curbing executive pay was by controlling the pay ratio between the highest and lowest earners in a company.
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A political crisis engulfing Stormont has left Northern Ireland facing a brutal election and a return to Westminster direct rule, outgoing First Minister Arlene Foster warned. The Democratic Unionist leader, who was forcibly removed by her counterpart Martin McGuinness's resignation on Monday, also announced plans for a public inquiry into the renewable heating scandal at the heart of the Executive's collapse. Foster said she would be willing to enter talks with Sinn Fein to avert an election, but the republican party made clear the region was heading to the polls.
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Ireland's consumer confidence dropped to a near two-year low in December as consumers remained cautious amid high uncertainty, survey results from the KBC Ireland and the Economic and Social Research Institute showed. The consumer sentiment index dropped to 96.2 from 97.8 in November, marking its lowest level since February 2015.
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Gale-force winds and blizzard-like conditions could bring travel chaos to parts of the UK on Wednesday. Tricky driving conditions are expected as gusts of up to 75mph and wintry weather sweep across northern areas. Yellow weather warnings for wind and snow across much of Scotland and the north of England have been issued by the Met Office for all of Wednesday. Several centimetres of snow could settle on higher ground in parts of Scotland, while lower areas will receive a dusting.
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Allegations that Russian intelligence officials have compromising information about US president-elect Donald Trump are sure to dominate a long-delayed news conference set for 1600 GMT on Wednesday that was to have focused on how he will separate himself from his business interests. A synopsis of the allegations was attached to the end of a report by US intelligence agencies on Russian interference in last year's presidential election, according to broadcaster CNN. It included graphic details about Trump's activities with prostitutes in a Moscow hotel which were filmed by the Russian secret service in order to potentially blackmail him in the future, the New York Times reported. Trump dismissed the report as "fake news" on Twitter just hours ahead of his first news conference since being elected November 9.
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US President Barack Obama returned to his adopted hometown of Chicago to defend his legacy and urge Americans to protect democracy from challenges both at home and abroad, in his final public speech before he leaves office. "Yes We Can. Yes We Did," he said, echoing the slogan of his 2008 presidential campaign, as he was joined on stage at McCormick Place by first lady Michelle Obama and elder daughter Malia, after delivering his final presidential address from the city where he launched his political career. Obama reflected on eight years in office, pointing to economic accomplishments along with the legalization of same-sex marriage, the opening of diplomatic ties with Cuba and an international nuclear deal with Iran as developments that would have seemed unbelievable when he entered office in 2009. Trump, who will take office after Obama on January 20, hopes to roll back many of those measures.
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By Arvind Bhunjun; [email protected]; @ArvindBhunjun
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