3rd Jun 2015 10:18
LONDON (Alliance News) - The following is a summary of top news stories Wednesday.
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COMPANIES
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Dixons Carphone said it expects pro-forma headline pretax profit for the year to exceed the top end of its guidance, after it reported growth in like-for-like sales in both the fourth quarter of its financial year and in its full year. The FTSE 100-listed electricals and telecoms retailer said that it expects group pro-forma headline pretax profit to be slightly above the top end of its previously guided range of GBP355 million to GBP375 million for the full year, as it posted like-for-like revenue growth in the 17 weeks to May 2 of 9% and 6% for the full year to the same date.
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Lloyds Banking Group said it is seeking to appeal a court decision that it is unable to refinance costly securities issued in the financial crisis. Failure to successfully appeal the court's ruling would mean the bank would lose out on a benefit of about GBP200 million a year over the next five years. Nevertheless, the group said it is confident that its net interest margin, a key drive of profitability, will exceed about 2.55% in 2015, as guided in May.
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TUI Group joint Chief Executive Peter Long is set to become chairman of the travel and cruise operator and the chairman of Royal Mail after the postal operator said he will succeed Donald Brydon as its chair on September 1. Royal Mail said Long will join its board as a non-executive director and chairman designate on June 18, and will stand for election at its annual general meeting on July 23. He will then succeed current chairman Brydon at the start of September. TUI Group separately said Long will remain as its co-chief executive until its own AGM in February 2016, at which point he will become chairman of TUI Ag's supervisory board. Fritz Joussen will be appointed TUI's sole chief executive.
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Pharmaceutical company Shire said the European Medicines Agency has approved Resolor for the use in male adults for the treatment of chronic constipation in whom laxatives fail to provide adequate relief. Resolor is approved for use in women in Europe, so this approval extends the use of the treatment to male patients.
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The Alton Towers theme park has been closed down while an investigation takes place into a rollercoaster accident at the attraction on Tuesday which left four people with serious injuries, BBC News reports. Two carriages on the Smiler ride at the park crashed on Tuesday, leaving four people with serious leg injuries and another 12 people requiring medical treatment. Nick Varney, the chief executive of Merlin Entertainments, which runs the park, told the BBC the park will remain closed "until we understand better the cause of this dreadful incident".
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WH Smith reported a rise in total sales in the 13 weeks to May 30, although it said that like-for-like revenue was flat, as its travel business continued to outperform the high street business. The books and stationery retailer said that total group sales in the 13 weeks were up 1% compared with the same period the year before, but like-for-like revenue remained flat year-on-year.
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Interserve said its CI-ONE Construction joint venture with China State Construction Engineering Corp has been named as the preferred bidder by Chinese property developer Dalian Wanda for the GBP550 million One Nine Elms scheme in Battersea in south London. The pair will handle the construction of the project, which will comprise high-end residential, hotel and retail space.
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Property company Workspace Group said its pretax profit surged in the financial year to the end of March, as its rental income increased, occupancy improved and the underlying valuation of its portfolio jumped. Workspace said its pretax profit was GBP360 million, up 43% from the GBP252.5 million it posted a year earlier. The group said it will hike its final dividend 15% to 8.15 pence per share, from 7.09 pence, meaning its total dividend is up 13% to 12.04 pence. Workspace also said it has struck a GBP34 million deal to acquire the Angel House property near the Old Street area of London. The net initial yield on the purchase is 3.7%, it said.
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Kier Group said its GBP340 million fully-underwritten rights issue was 91.65% taken up, and the bookrunners are now procuring buyers for the remaining shares. The property and construction services company had announced a five for seven rights issue of 39.6 million new shares at 858 pence a share the end of April. It said 36.3 million had been taken up by the closing time on June 2. Joint bookrunners JP Morgan and Numis Securities are now procuring subscribers for the remaining 3.3 million shares, and will buy the shares themselves if they don't find subscribers.
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UBM said it has acquired Latin American healthcare trade show Hospitalar from SPFC Group for an undisclosed sum. UBM said the return on investment from the buy is expected to exceed its weighted average cost of capital in the first full year of ownership. Hospitalar is a trade show hosted in Brazil which features 1,250 Brazilian and international exhibitors, and attracting around 95,000 attendees. It generated revenue of around BRL32 million at its 2015 show in May.
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Irish budget carrier Ryanair Holdings said its traffic grew year-on-year in May and its load factor improved. Ryanair said its traffic grew by 16% in the month to 9.5 million customers, up from 8.2 million a year earlier. The company's rolling annual traffic to May increased by 13% to 93.1 million customers. The load factor for the airline also improved in the month, up by seven percentage points to 92% from 85% a year ago.
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MARKETS
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London shares are flat to higher mid-morning, as the pound takes a hit from disappointing UK services sector data, while investor focus turns to the European Central Bank's latest monetary policy decision, due at 1245 BST.
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FTSE 100: flat at 6,927.29
FTSE 250: up 0.4% at 18,284.44
AIM ALL-SHARE: up 0.2% at 776.90
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GBP: down at USD1.5277
EUR: down at USD1.1120
GOLD: down at USD1188.77 per ounce
OIL (Brent): down at USD63.98 a barrel
(changes since end of previous GMT day)
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ECONOMICS AND GENERAL
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The British services sector expanded at the weakest pace in five months in May, as growth rates for output and new business worsened, survey results from Markit Economics revealed. The seasonally adjusted Markit/CIPS UK Services Purchasing Managers' Index for the services sector, fell to 56.5 in May from 59.5 in April. However, any reading above 50 indicates expansion in the sector. The latest decline in the index was the steepest since August 2011, but it remained above its long-run trend level of 55.2.
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Shop prices in the UK were down 1.9% on year in May, the British Retail Consortium said. That was unchanged from the rate of decline in the previous month, although it missed forecasts for a decline of 1.8% Food prices were steady at -0.9%, the bureau said, while fresh food prices tumbled 1.9% on year.
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UK house prices increased at the slowest pace in 21 months in May, data from the Nationwide Building Society showed. House prices increased 4.6% year-on-year in May, slower than the 5.2% growth seen in April. This was the slowest growth since August 2013 when prices increased 3.5% and also weaker than the expected 4.9% increase. Month-on-month, house prices increased only 0.3% after rising 1% in the previous month. Economists had forecast a 0.4% growth for May.
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The number of British people who want their country to leave the EU has dropped sharply over the last two years, a report said. A survey by the US-based Pew Research Center found 46% of people wanted Britain to leave the EU in 2013, when Prime Minister David Cameron made his vow to hold an in-out referendum by the end of 2017 if he won a second term in office. In a new survey following Cameron's election victory last month, only 36% of some 1,000 respondents said they favoured a so-called Brexit, a British exit from the EU, despite the UK Independence Party running a strong anti-EU campaign. About 55% of respondents said they wanted Britain to remain part of the EU, compared with 46% in 2013, Pew said.
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European Central Bank chief Mario Draghi is expected to restate at his press conference the ECB's determination to forge ahead with its bond-buying programme, while facing a barrage of questions on the chances of a Greek debt deal. Despite concerns that the eurozone economy may have run out of steam in recent months, the ECB's 25-head governing council is expected to leave its benchmark refinancing rate on hold at a historic low of 0.05% at its meeting in Frankfurt. Instead, analysts say the ECB chief will tell his press briefing after the council's meeting that the Frankfurt-based bank will roll out its EUR60 billion (USD67 billion) a month private and public asset purchasing programme as planned until September next year.
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The euro area jobless rate dropped as expected to the lowest level in more than three years in April, data from Eurostat revealed. The unemployment rate came in at 11.1% in April compared to revised 11.2% in March. This was the lowest rate since February 2012, when it was 10.9%. The rate came in line with expectations. The rate for March was revised down from 11.3%.
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The services sector in China grew at a faster rate in May, the latest report from HSBC Bank showed on Wednesday, with a PMI score of 53.5. That's up from 52.9 in April, and it moves further above the line of 50 that separates expansion from contraction. The composite index came in at 51.2, down from 51.3 in April.
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The Organisation for Economic Co-operation and Development lowered the global growth forecast for this year and next, citing the unexpected weakness in the first quarter. The Paris-based think-tank cut the world growth forecast for this year to 3.1% from 3.6% predicted in November. The outlook for next year was lowered to 3.8% from 3.9%. The group expects global growth to pick up through 2015 and 2016 thanks to low oil prices, widespread monetary easing and a reduction in the drag from fiscal consolidation in the major economies.
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The football world largely welcomed the planned resignation of Joseph Blatter as president of the ruling body FIFA but his motives for the extraordinary step a few days after his re-election, remained unclear. Blatter had refused to step down ahead of Friday's ballot at the FIFA congress in Zurich where he earned a fifth term with 133 votes from the 209 member federations, and his challenger Prince Ali Bin Al Hussein 73 votes. He defiantly said he would steer the FIFA ship into calmer waters but it appears that he would have found himself in a legal storm instead because of corruption investigations by American, and Swiss, authorities.
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