3rd Oct 2014 10:09
LONDON (Alliance News) - The following is a summary of top news stories Friday.
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COMPANIES
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EasyJet raised its full-year pretax profit guidance, saying it had taken about GBP5 million of revenue from Air France after that airline was hit by a costly pilots strike and after fuel prices swung in its favour. In a trading update, the low-cost airline said it now expects pretax profit for the year that ended on September 30 to come in between GBP575 million and GBP580 million, up from the GBP545 million to GBP570 million guidance it gave in July. "The impact of the Air France pilots' strike in September is expected to increase easyJet's revenue by circa GBP5 million as Air France passengers switched to easyJet," the British airline said in a statement.
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United Utilities Group scaled back its future infrastructure spending plans, as it submitted its latest proposal on how it would control the prices it charges customers over the next five years to water industry regulator Ofwat. Ofwat in August told United Utilities that its previous proposals had "very material differences" against the regulator's own assessment of its spending plans and how that would affect price control, particularly on wholesale wastewater price controls. In a statement, United Utilities said it now plans to reduce planned total expenditure by about GBP370 million compared with the previous proposal it put to the regulator.
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The Royal Bank of Scotland Group has hired Goldman Sachs to seek buyers for its Coutts International business and is expected to inform potential suitors that they will be refused the right to use the brand of the private bank, the Financial Times reported Thursday. RBS is planning to keep the UK business of Coutts & Co but is understood to have attracted a number of bidders for the Switzerland-based international arm of the company, the FT said.
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Lawyers representing BP have called for a retrial or revised judgement after identifying what they claim is a legal mistake in the court ruling made last month that the company acted with gross negligence in the 2010 Deepwater Horizon spill, the Financial Times reported. In a filing made on Thursday, BP argued Judge Carl Barbier, who is hearing the civil case related to the disaster, relived on evidence which had been excluded from the trial when reaching his findings, the FT said. BP is to ask Judge Barbier either to revise the ruling to exclude this evidence or to hold a new phase of a trial in order to allow BP to put forward arguments to counter it.
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Sports Direct International said late Thursday it has acquired a further 4.6% equity interest in Debenhams, through the acquisition of 56.4 million shares. In January the company bought a 4.6% stake in Debenhams, which it sold just three days later to replace with an option agreement that will activate if Debenhams shares fall below a certain level in the future. Its maximum exposure to the option is about GBP64 million. At that time the company said it had pledged to work with Debenhams to improve its faltering performance.
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Billionaire investor Warren Buffett on Thursday said he made a "huge mistake" investing in Tesco, and has lost hundreds of millions on the bet, The Times reported. Shares in the supermarket dropped to an 11-year low on Thursday after Buffett, during an interview with CNBC, said he regretted building up a 3.7% stake in the company. Buffett offered a mea culpa during the interview when asked about the investment his Berkshire Hathaway company made in the group. "I made a mistake on that one," Buffett said. "It wasn't anyone else who made it. Yeah, that was a huge mistake by me."
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Renishaw confirmed its financial has started well, with strong first quarter trading which it said it expects to continue into the second. The FTSE 250 engineering company said its first-quarter revenue increased year-on-year, up to GBP101 million from GBP79 million a year earlier, boosted by growth in its Asian business. The group said it expects this performance to continue into the second quarter.
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AMEC said it is trading in line with expectations and affirmed its outlook for the year, though it said sterling strength would hit both profit and revenue. The company said it is continuing to see less greenfield activity in some key upstream oil and gas markets, which is being partially offset by strong growth in its Clean Energy and Middle Eastern Oil & Gas businesses. The FTSE 250 engineering consultancy said it expects modest underlying revenue growth for the full year to December 31 for its existing operations, driven by the Clean Energy and Middle Eastern Oil & Gas divisions. But AMEC said it expects the strength of sterling to hit its revenue by around GBP250 million this year, along with a GBP25 million hit to its full year trading profit.
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Homewares retailer Dunelm Group said strong trading in the first quarter of its financial year was helped by weaker comparatives, but said trading continues to be buoyed by an improving UK economy, new store openings and improvements in its online offering. The company said sales in the 13 weeks to September 27 rose 17% to GBP180.6 million, up from GBP154.3 million a year earlier. Like-for-like sales grew by 8.9%, which it said was helped by a relatively weak performance in the same quarter last year, when footfall was subdued by unusually warm weather.
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MARKETS
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UK shares are trading in the green, rebounding from the heavy losses incurred on Thursday from disappointment in the outcome of the European Central Bank meeting, with discount airline easyJet providing some early cheer.
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FTSE 100: up 0.9% at 6501.29
FTSE 250: up 1.2% at 15181.29
AIM ALL-SHARE: up 0.2% at 759.38
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The pound continued its decline against the greenback after data showed that UK service sector activity grew at the slowest pace in three months during September.
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GBP-USD: down at USD1.6066
EUR-USD: down at USD1.2622
GOLD: down at USD1207.58 per ounce
OIL (Brent): down at USD93.29 a barrel
(changes since end of previous GMT day)
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ECONOMICS AND GENERAL
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UK service sector activity grew at the slowest pace in three months during September, but remained robust, supported by increasing demand and strengthening confidence, survey results from Markit Economics and the Chartered Institute of Purchasing and Supply showed. The Markit/CIPS UK Services Purchasing Managers' Index dropped to 58.7 from August's 60.5. Economists had forecast a slower decline in the index to 59. A PMI reading above 50 suggest expansion in the sector.
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Eurozone's composite purchasing managers' index, or PMI, was revised downwards in September, final figures from Markit Economics showed. The Markit PMI composite output index was revised to 52 from the flash estimate of 52.3, logging a ten-month low. In August, the index was at 52.5. Economists had expected the PMI to remain unrevised from the flash estimate. New business increased at the weakest rate since October 2013. Employment levels also remained weak in September.
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Eurozone retail sales grew much faster-than-expected in August following a decline in July, data from Eurostat showed. Retail sales rose 1.2% from July, when they declined 0.4%. Economists had forecast a modest 0.1% gain. The latest growth was the strongest since December 2009, when sales rose 1.3%. It was also the fastest growth in nine months and equaled the gain in November 2013.
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Pro-democracy demonstrators in Hong Kong forced government offices to stay shut Friday following the end of a two-day public holiday, even as the numbers of protesters out on the streets decreased in the Chinese territory. The protesters stopped some civil servants from entering official buildings, and all visits to central government offices (CGO) were postponed or cancelled. Security staff jostled with protesters as they tried to force open barricades to the government headquarters.
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British Prime Minister David Cameron reaffirmed his country's commitments to Afghanistan during an unannounced visit to Kabul. Cameron met Afghanistan's new president, Ashraf Ghani, and chief executive officer, Abdullah Abdullah. "We will continue supporting Afghanistan. We have a common goal which is a secure Afghanistan," he said in a joint press conference with Ghani.
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China's non-manufacturing business activity expanded at a slower rate in September, data from the National Bureau of Statistics showed. The non-manufacturing business activity index decreased to 54 in September from 54.4 in August. This indicated a slower rate of growth.
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Japan's services sector moved back to expansion in September, the latest survey from Markit Economics revealed, with a 16-month high services PMI score of 52.5. The headline figure is up from 49.9 in August, and it moves back above the boom-or-bust score of 50 that separates expansion from contraction.
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Service sector activity in Ireland expanded at a marginally faster rate in September, results of a survey by Markit Economics showed. The Investec purchasing managers' index, or PMI, for the services sector edged up to 62.5 in September from 62.4 in August. This marked the twenty sixth consecutive month of expansion.
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By Arvind Bhunjun; [email protected]; @ArvindBhunjun
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