13th May 2015 10:09
LONDON (Alliance News) - The following is a summary of top news stories Wednesday.
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COMPANIES
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TUI Group said its operating loss narrowed in the first half of its financial year, as revenue rose and its hotels and resorts and cruises businesses delivered a significant increase in profitability, and it retained its profit guidance for the year as a whole. The travel company, the result of a recent merger between Germany's TUI AG and the UK's TUI Travel, reported a loss before interest, tax and amortisation of EUR292.0 million for the six months to end-March, compared with EUR341.4 million a year earlier, when profits on asset sales and a refinancing benefit are excluded. Including these benefits, the loss narrowed to EUR272.6 million, from a EUR341.4 million loss, as revenue rose to EUR6.94 billion from EUR6.47 billion.
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Mondi reported a 29% increase in operating profit excluding exceptional items in the first quarter of 2015, driven by higher volumes and lower input costs across most of Europe, strong contributions from capital projects and acquisitions, and higher selling prices in Russia and South Africa. The paper company said its underlying operating profit in the three months to end-March, which excludes what it terms as special items, was EUR236 million, up from EUR183 million a year earlier, and up 9% from EUR216 million in the fourth quarter of 2014.
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Compass Group reported a rise in profit in the first half of its financial year, boosted by strong sales in North America and the emerging markets. The catering and outsourcing company reported a 4.9% rise in pretax profit for the six months to March 31 to GBP621 million, while its organic revenue grew 5.7% to GBP8.9 billion. Its operating margin increased by 10 basis points to 7.5%. Compass said it will pay an interim dividend of 9.8 pence, up 11% on the prior year.
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Admiral Group said Chief Executive Henry Engelhardt is to step down from the role in one year's time and will be replaced by company co-founder and current chief operating officer David Stevens. Engelhardt has been the chief executive of Admiral since its founding in June 1991. Stevens also has been with the company throughout its history and, in addition to the COO role, is the chief executive of the UK insurance business.
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Barratt Developments said it remains on track to report a significant improvement in its results in the year to end-June, as it expects housing completions to be ahead of previous guidance and as it reported a 17.9% increase in total forward sales by May 10. The housebuilder said it now expects housing completions for the year to June 30 to be about 16,100, up from 14,838 in its last financial year, and it said forward sales including joint ventures stood at GBP2.59 billion as of May 10, up from GBP2.20 billion on May 11, 2014.
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SABMiller reported flat pretax profit in its recently ended financial year, as its revenue fell very slightly, it was hit by currency exchange rate changes, and it booked costs associated with joint ventures and acquisitions. The brewer, whose brands include Grolsch, Peroni, Coors Light beers and Bulmers cider, reported a pretax profit for the year ended March 31 of USD4.8 million, flat on the year before, on revenue of USD22.1 million, down slightly from USD22.3 million.
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Severn Trent said it is selling its water purification business to joint venture partner Industrie De Nora in a deal that values the whole unit at USD99 million and Severn Trent's share at USD81.2 million. The water utility said its share will be settled by a cash payment of USD20.1 million, or GBP12.6 million, and the rest through the settlement of net intercompany debt. It expects the sale to complete at the end of June.
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Tesco has closed its last six Homeplus stores and has cut around 650 jobs in the process, Sky News reported. Tesco said the stores in Hartcliffe in Bristol, Bracknell, Nottingham, Denton, Bromborough and Preston will close on June 27. Six other stores were closed by the company in March. The decision brings down the curtain on Tesco's non-food retail business, which launched in 2005 as standalone outlets selling homeware, clothing, electrical goods and stationary products.
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AstraZeneca said it has entered into a deal with US pharmaceutical company Abbott Laboratories to develop companion diagnostic tests to identify patients with severe asthma most likely to benefit from the tralokinumab biological therapy. Under the deal, Abbott will develop and commercialise diagnostic tests to measure serum levels of the periostin and DPP4 proteins, which have been identfied as potential predictive biomarkers in patients with severe asthma. The tests will be developed in conjunction with the phase 3 trial of tralokinumab, a potential asthma treatment developed by AstraZeneca's MedImmune research and development arm.
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Premier Oil shares rose after it said production was ahead of the company's guidance despite falling across all of its portfolio except in Vietnam in the first quarter, but the FTSE 250 explorer and producer reiterated its full-year guidance and said it will focus on reducing costs for the rest of the year. Premier said production averaged 60,200 barrels of oil equivalent per day in the first quarter of 2015, down from 65,800 barrels per day a year earlier. The fall was due to the sale of the Scott area in the UK North Sea and some natural decline across the portfolio. Production in the quarter fell to 13,200 barrels per day in Indonesia from 14,200 barrels, whilst UK production dropped to 16,200 barrels from 20,400 barrels a year earlier.
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Centamin reported a year-on-year rise in revenue, earnings, pretax profit and production in the first quarter of 2015, although all the measures were down quarter-on-quarter. The miner reported a pretax profit of USD28.6 million in the three months to end-March, up from USD20.6 million a year earlier, whilst earnings before interest, tax, depreciation and amortisation came in at USD53.0 million, up 55% from a year earlier when earnings totalled USD34.3 million. Basic earnings per share in the period was 2.50 cents, rising from 1.87 cents in the first quarter of 2014. Revenue in the quarter rose to USD135.2 million from USD102.7 million as gold sales totalled 111,249 ounces compared with only 78,957 ounces a year earlier.
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Renishaw said its revenue and pretax profit surged higher in the third quarter and the first nine months of the year, with growth across its regional operations particularly in the Far East. The FTSE 250-listed engineering company said revenue in the third quarter to the end of March was GBP145.9 million, up from GBP84.5 million a year earlier, driving its third quarter pretax profit up to GBP53.2 million from GBP14.4 million and its nine-month pretax profit up to GBP109.8 million from GBP40 million. The group said revenue in the Far East more than doubled in the nine months, with Americas revenue growing 14%, the UK by 7% and Europe by 1%.
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MARKETS
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London shares are higher with investors awaiting the , due at 1030 BST, while Mondi is the best blue-chip performer after reporting a much higher quarterly operating profit.
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FTSE 100: up 0.6% at 6,976.29
FTSE 250: up 0.8% at 17,826.51
AIM ALL-SHARE: up 0.2% at 758.74
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The pound eased back from previous gains against the dollar after the release of the Bank of England's inflation report. Earlier, sterling had spiked after UK unemployment fell to its lowest level since 2008 and average earning increased by more than expected.
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GBP: flat at USD1.5667
EUR: up at USD1.1233
GOLD: up at USD1193.98 per ounce
OIL (Brent): up at USD67.38 a barrel
(changes since end of previous GMT day)
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ECONOMICS AND GENERAL
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UK unemployment declined to the lowest since 2008 during the first quarter of 2015 and earnings increased more than expected, data from the Office for National Statistics revealed. The ILO jobless rate came in at 5.5% during January to March period compared to 5.7% in October to December quarter. The rate came in line with expectations. This was the lowest since 2008. In the first quarter, average earnings including bonus increased 1.9%, faster than the expected increase of 1.7%. Excluding bonus, pay for employees climbed 2.2%.
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The Bank of England said it thinks UK inflation will rise notably around the turn of the year as the recent falls in food energy and other import prices drop out of the comparisons, and will then rise further as wages and labour costs start rising and the effect of the rise in the pound dissipates. It said the Monetary Policy Committee still thinks it's appropriate to set policy so that it is likely that inflation will return to its 2% target within two years, and thinks that's likely to be achieved as long as the interest rate follows the path currently implied by market yields, rising gradually over the forecast period.
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Eurozone economic growth improved further in the first quarter as growth in France, Spain and Italy accelerated from the prior quarter. Gross domestic product expanded 0.4% sequentially in the first quarter, slightly faster than the 0.3% growth seen in the fourth quarter of 2014, flash estimates published by Eurostat showed. The growth rate matched economists' expectations. Year-on-year, economic growth improved to 1%, in line with forecast, from 0.9% in the fourth quarter.
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Germany's economic growth slowed in the first quarter of the year on weak foreign trade, while the French economy expanded the most since the second quarter of 2013. German gross domestic product rose 0.3% sequentially, slower than the 0.7% expansion seen a quarter ago, data released by Destatis showed. It was also weaker than the 0.5% growth forecast by economists. Elsewhere, the second largest Eurozone economy grew 0.6% in the three months ended March, the fastest growth since the second quarter of 2013, the French statistical office Insee reported. Economists had forecast 0.4% growth after showing no variations in the previous quarter.
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Germany's consumer price inflation accelerated for the third straight month in April at a faster than initially estimated pace, final data from Destatis showed. The consumer price index climbed 0.5% year-over-year in April, revised from a 0.4% increase estimated earlier. In March prices had risen 0.3%. The latest rate of inflation was the highest since November last year, when prices grew 0.6%.
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French consumer prices increased in April after falling for three straight months, the statistical office Insee reported. Consumer prices rose 0.1% from last year, reversing March's 0.1% fall. The annual rate came in line with expectations.
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China's industrial production grew at a faster pace in April, while retail sales growth eased for the third straight month, data from the National Bureau of Statistics showed Wednesday. Industrial output expanded 5.9% year-on-year in April, faster than March's 5.6% increase. Nonetheless, it was slightly weaker than a 6% rise forecast by economists. Annual growth in retail sales slowed to 10% in April from 10.2% in March.
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The European Commission is due Wednesday to unveil its strategy to tackle a growing influx of people immigrating to Europe and curb migrant deaths in the Mediterranean, but its plan to propose national migration quotas has already met with opposition. The EU is a sought-after destination for people fleeing conflict and persecution or looking for a better life. Many migrants undertake perilous journeys across the Mediterranean Sea, which not all survive. The issue took on new urgency last month after a shipwreck in which more than 800 migrants are thought to have drowned, making it the worst such incident to date.
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US President Barack Obama's own party blocked legislation that is key to promoting two of his top economic priorities - trade deals with the Pacific Rim and with Europe. Forty-five Senators, most of them minority Democrats, opposed ending debate on the revival of fast-track trade authority, effectively using a procedural manoeuvre to keep it from proceeding to full debate and a vote.
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The death toll from another powerful earthquake centred in Nepal passed 80, authorities said, with reports still coming in of landslides and further casualties. Some 65 people were killed in Nepal alone by the 7.3-magnitude quake and aftershocks which hit after midday on Tuesday, authorities said, even as the country struggled to deal with the mass deaths and damage caused by a 7.8-magnitude tremor last month. About 17 people were reported to have died in India, mostly in the state of Bihar on Nepal's southern border, and one person was dead in China after the latest quake.
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A passenger train derailed outside the city of Philadelphia in the eastern US late Tuesday, killing five people, local authorities said. Mayor Michael Nutter told reporters that seven cars had derailed and described the scene as "an absolute, disastrous mess." He said over 50 people had been injured, local media reported. Some were in serious condition. Train operator Amtrak reported that there were about 238 passengers and five crew members on board the train, which was on its way from Washington, DC to New York City.
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A Saudi-led coalition halted its air raids on rebel-held positions in neighbouring Yemen late Tuesday as a 5-day ceasefire went into effect at 11 pm local time. The ceasefire, which is intended to allow badly-needed humanitarian aid reach people affected by the conflict, was preceded by a day of intensive airstrikes on positions held by the Houthi rebels in northern and central Yemen.
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By Arvind Bhunjun; [email protected]; @ArvindBhunjun
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Related Shares:
AdmiralAstrazenecaTescoCentamin PLCBarratt DevelopmentsRenishawPMO.LCompass GroupSevern TrentMondiSAB.L