APF.L Share News (APF)

LONDON (Alliance News) - Burberry Group is the worst performing stock on the FTSE 100 Tuesday, after it warned that it was facing tougher trading in Europe and Asia, while luxury goods peer Mulberry Group is one of the worst performers on the AIM market after it issued yet another, largely self-inflicted, profit warning.

Burberry said sales growth slowed in its fiscal second quarter as its key travelling Chinese consumers splurged out less on its clothes and leather goods, and it warned that weak consumer confidence in Europe and slower Asian growth would weigh on its second half.

The warning about the slowdown echoes comments from other luxury goods companies, who are facing increased worries about demand from China in the wake of the political issues in Hong Kong and as sanctions on Russia in the wake of the crisis in Ukraine hits demand from that country.

Bureberry said revenue rose 14% on an underlying basis in the six months to September 30, to GBP1.1 billion, buoyed by 15% sales growth in retail revenue, and 13% growth in wholesale revenue. On a reported basis, retail and wholesale sales were up only 8%, while licensing revenue was down 18%.

That marked a slowdown from the first quarter when it had reported underlying sales growth of 17%, or 9% on a reported basis. Comparable retail sales growth in the first quarter was 12%, but slowed to 8% in the second quarter.

Mulberry, meanwhile, saw a quarter of its market value wiped out in early trade, after it issued a fresh profit warning in the wake of weak demand and sales in the first half, and said it now expects its full year profit to be significantly below expectations.

The company's former Chief Executive Bruno Guillon, who left the company in March, had presided over two years of profit declines. He was blamed for pricing the retailer out of the market by raising its prices too quickly. Under Guillon, Mulberry issued a profit warning four times in just two years, and its reputation was damaged.

Executive Chairman Godfrey Davis Tuesday pleaded for investors to be patient with its new strategy, which has included bringing out new ranges at lower prices and recruiting catwalk model of the moment Cara Delevingne as a brand ambassador.

"I explained that the impact would be progressive and should produce benefits over the medium term. The new products are beginning to reach our shops with the launch of the Cara Delevingne bags at the beginning of September and with further new product being offered in our shops during November," Davis said.

In a statement, the luxury bags, clothes and accessories maker gave a bleak outlook for the remainder of its financial year, after it said revenue in the first half fell 17% to GBP64.7 million, compared with GBP78.1 million the prior year, and warned its pretax profit for the full year to end of March 2015 will be "significantly below current expectations".

Broker WH Ireland said it is now forecasting that Mulberry will report a pretax profit of GBP3.5 million in the current financial year, down from its previous forecast of GBP11.2 million.

Mulberry shares have pared the early losses, but remain down 9.9%.
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Markets: Stocks indices are trading lower in the UK and across Europe, while the pound also has fallen, amid a drop in UK inflation to five-year low and yet more worrisome data from the eurozone economy.

Futures indicate a flat opening across the board for the main US indices.

FTSE 100: down 0.5% at 6,335.73
FTSE 250: down 0.2% at 14,512.25
AIM ALL-SHARE: flat at 697.05
GBP-USD: down at 1.5947
EUR-USD: down at 1.2653
GOLD: flat at USD1,234.12 an ounce
OIL (Brent): down at USD87.76 a barrel
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Other Top UK Corporate News
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Beer and soft drinks giant SABMiller said sales in the second quarter were hit by lower lager volumes and weaker trading in Australia and China, although it said total beverage volumes inched up in the first half as a whole, balanced by stronger growth in soft drinks in Latin America and Africa. The brewer of brands including Peroni, Pilsner Urquell and Grolsch said total beverage volumes were down 1% in the second quarter, hit by weakness in Australia, softer demand in China, and poor summer peak weather in Europe, following some growth in the first quarter.
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Hargreaves Lansdown reported a GBP100.0 million increase in assets under administration over the course of the traditionally quiet first quarter, but said levels of net new business were lower than in the corresponding period last year amid uncertainty over the Scottish independence referendum, concern over Middle East and Ukrainian conflicts and unfavourable Eurozone economic data. In a statement, Hargreaves Lansdown reported GBP970.0 million of net new business inflows in the quarter ended September 30, compared with GBP1.26 billion in the corresponding quarter last year.
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Ten UK companies including WH Smith, Royal Bank of Scotland Group and Rolls-Royce Holdings issued financial statements in the year to March 2014 that failed to meet the Financial Reporting Council's standard for clear reporting, the Financial Times reported. The accountancy watchdog said in a report on Tuesday that it examined the accounts of 271 companies and approached 37% of them for further information and explanation, the FT said. Typically, correspondence from the FRC results in companies agreeing to make some change to their next reports and accounts. The other companies in the group included Anglo-Eastern Plantations, Anglo Pacific Group, Eland Oil & Gas, Pendragon, GKN, and the Co-Operative Bank.
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Bellway reported a jump in full-year profit as higher sales volumes at higher average prices lifted revenue by a third, and the company predicted further volume growth in the current year, albeit at a slower rate. The company reported a pretax profit of GBP245.9 million for the year to end-July, up from GBP140.9 million a year earlier, as revenue rose to GBP1.49 billion, from GBP1.11 billion. It raised its total dividend to 52.0 pence, from 30.0 pence, on the back of the strong results, meaning it will have returned over GBP220 million to shareholders since 2007. The final dividend will be 36.0p, up from 21.0p.
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Ashmore Group reported a USD3.7 billion fall in assets under management over the course of the first quarter, citing negative investment performance of USD3.4 billion and net outflows of USD300 million. In a statement, the emerging markets asset manager said assets under management fell to USD71.3 billion at the end of September from USD75.0 billion at the end of June.
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Michael Page International became the latest name to be hit by the strength of sterling, taking a 7 percentage point hit to its gross profit and warning that currency movements will contribute to operating profit growth coming in below market expectations. The FTSE 250-listed recruitment company said its gross profit grew 11.6% on a constant currency basis in the quarter to September 30, with positive results coming from all four of its operating regions. On an actual currency basis, however, gross profit for the group increased only 4.7% as it was hit by the strength of the pound.
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Just Retirement Group said it has completed its largest defined benefit de-risking transaction, a buy-in deal for GBP75 million which was contracted in September. The specialist insurer said it can't disclose the full details of the deal until all the scheme's members have been told the particulars, but it will provide a bulk annuity contract to the scheme trustees to cover all pensioner members and the deal marks its first completed transaction with the employee benefit consultant advising on the scheme.
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Afren confirmed it has terminated the employment of Chief Executive Osman Shahenshah and Chief Operating Officer Shahid Ullah with immediate effect, firing them for gross misconduct based on evidence found by a review that unearthed irregular payments and starting legal proceedings to recover money from them. It also fired Associate Directors Iain Wright and Galib Virani with immediate effect for the same reasons, and started disciplinary action against seven more employees who it said also received payments.
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Publishing company Informa said it has appointed Andrew Mullins as chief executive of its Knowledge & Networking division as it created a new operating structure due to the retirement of Euroforum Managing Director Alfred Moellenbeck. Moellenbeck's responsibilities for the Euroforum business in Germany have now transferred to Ann-Marie Brems, who reports directly to Mullins, Informa said in a statement.
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Building products company SIG said it has sold its 50.6% stake in Ice Energy Technologies Ltd to that company's existing management for GBP1, although it could earn up to GBP5 million on the sale depending on the future performance of the sold business up to the end of March 2019. In a statement, SIG said It has also provided Ice Energy with a GBP0.85 million interest bearing loan, repayable in five years.
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Luxury shoemaker Jimmy Choo has narrowed downwards the price range for its initial public offering after the poor performance of several high-profile listings in Europe this year soured investor appetite for flotations, the Financial Times reported. The FT said bankers on the deal are now indicating that Jimmy Choo will price at roughly 140 pence to 160p a share, down from an earlier guidance of 140p-180p, but said that the IPO is fully covered at the new, lower range.
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AIM Movers
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Global Energy Development shares are up by a half after it agreed to sell the rights and obligations for its contract areas within the Llanos Basin for USD50 million in cash to a subsidiary of TSX-listed Platino Energy Corp. The company will use part of the proceeds to eliminate its its outstanding debt balance of USD7.5 million, and will decide what to do with the rest after the deal closes. Allocate Software shares are up by over a third after it recommended a GBP109.6 million takeover offer from an HgCapital Group takeover vehicle. The vehicle has made an offer at 153.55 pence per share, which is a 35.3% increase on Allocate's closing price of 113.5 pence Monday. Solo Oil is up after it signed a deal with Aminex to buy up to 13% of the Kiliwani North Development Licence in Tanzania. Scancell Holdings is another gainer after it said it got positive results for its SCIB1 trials on a malignant melanoma treatment. Caledonia Mining is down after it warned its earnings for the full year will be "materially lower" than current market expectations, after production fell at its Blanket Mine in Zimbabwe in its third quarter. Immunodiagnostic Systems Holdings is also down after it said it expects its revenue for the first half to be down on the previous year, as the near-term trading environment for its business "remains challenging."
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Top Economics And General
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UK inflation slowed to a five-year low in September, the Office for National Statistics showed. Consumer price inflation eased more-than-expected to 1.2% in September from 1.5% in August. Economists had forecast the rate to slow marginally to 1.4%. Month-on-month, consumer prices remained flat in September versus 0.4% rise in August. Prices were expected to grow 0.2%. Consumer prices excluding energy, food, alcoholic beverages and tobacco, rose 1.5% from last year, slower than the 1.9% increase seen in August.
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Like-for-like retail sales in the UK were down 2.1% on year in September, the British Retail Consortium said. That was well shy of forecasts for an increase of 1.0% following the 1.3% gain in August. Overall, total sales fell an annual 0.8%.
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Germany's investor confidence deteriorated for the tenth successive month in October, turning negative for the first time since late 2012, as the economic situation is expected to worsen further. The ZEW Indicator of Economic Sentiment dropped to -3.6 from 6.9 in September, the Mannheim-based Centre for European Economic Research/ZEW said. It was far worse than the zero reading forecast by economists. The latest score was the first negative since November 2012, when the print was -15.7.
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The EU measure of inflation for France slowed as expected in September, figures from the statistical office Insee showed. The harmonised index of consumer prices, or HICP, grew 0.4% year-on-year, in line with the consensus estimate. This was slower than the 0.5% rise in August. On a month-over-month basis, the HICP fell 0.4% in September, faster than the 0.2% rise expected by economists. In August, the HICP had increased 0.5%.
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Italy's consumer prices declined at a faster than estimated rate in September, final figures from the statistical office ISTAT showed. Consumer prices fell 0.2% year-on-year in September, which was faster than the 0.1% flash estimate. In August, consumer prices had dropped 0.1%, marking the first decline since 1959.
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An index measuring producer prices in Japan was down 0.1% on month in September, the Bank of Japan said, coming in at 106.3. That was in line with forecasts following the 0.2% decline in August.
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A powerful typhoon swept through Japan before heading out to the Pacific early Tuesday, leaving two people dead and one missing, local media said. More than 90 people were injured as Vongfong, the second typhoon in a week, brought heavy rains and strong winds to many parts of the country, local media reported. Hundreds of residents were advised to evacuate their homes in north-eastern Japan and airlines cancelled about 80 flights scheduled for Tuesday, NHK reported, as the Meteorological Agency warned of strong winds, mudslides and swollen rivers.
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Police cut down bamboo barricades with chainsaws in Hong Kong's business district Tuesday to clear a route for traffic, as hundreds of pro-democracy demonstrators continued a third week of protests in the Chinese territory. Hundreds of protesters remained at three main sites in the city after sleeping in tents overnight, but did not resist the police action.
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The Ukrainian government confirmed that Russian troops were withdrawing from areas close to the border, but cautioned that Russia continues to allow fighters to cross into Ukraine. The Kremlin said over the weekend that President Vladimir Putin had ordered more than 17,000 Russian troops to pull back from the border with Ukraine, where they had been participating in exercises. It was unclear how many Russian troops remain in the region close to eastern Ukraine, where bloody skirmishes between pro-Russian separatists and Ukrainian government troops continued despite a ceasefire.
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Islamic State jihadists seized an army base Monday in the Iraqi town of Hit as they continued their advance in the western province of al-Anbar, local media reported. Al-Mada Press reported the base fell after hours of clashes. The jihadist advance threatens to cut off remaining Iraqi security forces in the Sunni-dominated province, which stretches from the western outskirts of Baghdad to the Syrian border.
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The US government is carrying out a "surge" in staff and resources against Ebola in Dallas after the Texas city was the scene of the first transmission inside the US of the often deadly haemorrhagic fever. Meanwhile, a UN employee who was flown from Liberia to the eastern German city of Leipzig after contracting Ebola had died, the hospital said. The 56-year-old man had been sent to St Georg hospital in Leipzig on October 9 for treatment. "Despite intensive medical measures and the greatest efforts of the medical staff, the 56-year-old UN employee has succumbed to this serious infectious disease," the hospital said in a statement.
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The UK government launched a consultation on which payments systems, including major credit and debit card providers, will be regulated by the new Payment Systems Regulator when it becomes operational from April 2015. The main payment systems used by British businesses and consumers that the government is proposing to bring under the scope of the Payment Systems Regulator include Visa and Mastercard, as well as the main interbank systems which include Bacs, CHAPS, Faster Payments, Link and the cheque clearing system.
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Afternoon Watchlist (all times British Summer Time)

All Day EU EcoFin Meeting
12:30 US NFIB Business Optimism Index
13:55 US Redbook index
16:30 US 3-Month Bill Auction
16:30 US 6-Month Bill Auction
19:00 US Monthly Budget Statement
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Wednesday's Key UK Corporate Events

Connect Group - Full Year Results
Datatec - Half Year Results
Fresnillo - Interim Management Statement
Arbuthnot Banking Group - Trading statement
Secure Trust Bank - Trading statement
Rio Tinto - Q3 Production Report
Vertu Motors - Half Year Results
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Wednesday's Key Economic Events (all times British Summer Time)

02:30 China Consumer Price Index
02:30 China Producer Price Index
05:30 Japan Industrial Production
07:00 Germany Consumer Price Index
08:00 EU ECB President Draghi's Speech
09:30 UK ILO Unemployment Rate
10:00 Italy Public Deficit/GDP
12:00 US MBA Mortgage Applications
13:30 US NY Empire State Manufacturing Index
13:30 US Producer Price Index
13:30 US Retail Sales
15:00 US Business Inventories
19:00 US Fed's Beige Book
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