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LONDON (Alliance News) - The following is a summary of top news stories Tuesday.
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COMPANIES
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Aer Lingus said its board has indicated to International Consolidated Airlines Group that it is willing to recommend the British Airways owners' EUR1.36 billion bid for the Irish airline. IAG, which also owns Spanish airlines Iberia and Vueling, raised its bid for Aer Lingus for a second time on Monday, and is now offering EUR2.55 a share in cash in total. That figure includes a cash dividend of EUR0.05 a share. "Having considered this request, the board has indicated to IAG that the financial terms are at a level at which it would be willing to recommend, subject to being satisfied with the manner in which IAG proposes to address the interests of relevant parties," Aer Lingus said in a statement.
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EasyJet said it expects to report a smaller first-half loss in its current financial year, after it said revenue rose on the back of strong demand from business and leisure travellers and fuel costs fell in the first quarter. In a trading update, the low-cost airline said it expects to report a pretax loss of between GBP10 million and GBP30 million in the first half of its financial year, narrower than the GBP53 million loss it reported in the first half of last year.
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British Land said it experienced a strong third quarter, with a good occupational performance in its retail and offices portfolio and robust rental growth. The FTSE 100-listed property company said it secured 269,000 square foot of retail lettings and renewals in the quarter ended December 31, with investment lettings and renewals in the period 10.9% ahead of estimated rental value. Retail footfall was up 1.3% in the quarter, with retailer same-store sales in its properties rising 4.4%. British Land also confirmed its third quarter dividend at 6.92 pence per share, up 2.5% on last year.
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Cruise operator Carnival Corp signed a memorandum of understanding with China Merchants Group to explore the possibility of two joint ventures designed to accelerate the development and growth of the overall cruise industry in China. The MoU would explore both Port & Destination Development and Ship-Owning joint ventures with the aim of potentially introducing China's first world-class domestic cruise brand, Carnival said. Recently, Carnival announced its plans for capacity growth in China in 2015 to meet growing demand. With Costa Cruises adding the Costa Serena in China in April of this year, Carnival would be the first global cruise firm with four ships home-ported in China.
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Legal & General Group said it is launching a GBP15 billion regeneration vehicle to provide investment into UK regeneration projects including housing and infrastructure. In a statement, the insurance, savings and investment management product provider said it is allocating GBP1.5 billion to the vehicle, which will invest across the UK in both equity and debt. It will take construction risk and invest in different sectors and projects, Legal & General said. According to the company, a fund of this size could be involved in 30 to 50 projects.
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UK regulators have agreed a deal with Affinion International and 11 high street banks and credit card issuers for a scheme that paves the way for about two million customers to claim compensation if they have concerns about the way that card security products provided by Affinion International were sold to them. According to the Financial Conduct Authority, which regulates financial firms and is responsible for protecting consumers, the banks involved were AIB Group (UK), Barclays Bank, Capital One (Europe), Clydesdale Bank, HSBC Bank, Lloyds Bank, Northern Bank trading as Danske Bank, Santander UK, Tesco Personal Finance, The Co-operative Bank, and The Royal Bank of Scotland. Affinion and the banks voluntarily agreed to be part of the scheme and will provide the money needed to fund compensation payments, the FCA said. The regulator added that it has not conducted a formal investigation into the matter.
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Afren shares lurched to another low losing more than half their value after the company said it has entered into talks with a committee of bondholders, warning that it will require equity funding beyond its market capitalisation if its debt structure remains as it is. Shares in the company were down 55% to 7.94 pence on Tuesday, by far the worst performer in the FTSE 250, having touched a low of 5 pence per share during the morning. Since the start of this year, the company has seen its shares drop 83% already and shares in the company are down 95% over the past 52 weeks.
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Fruit Shoot and Pepsi Max maker Britvic said overall revenue dipped by 0.4% in the first quarter, citing "challenging trading conditions" in the UK and internationally, where volumes fell and selling prices remained flat. The FTSE 250- listed soft drinks company warned at the end of last year that the new financial year had started slowly, but had said that it was confident of further profit improvement during the year on the back of new product launches and more benefits from its cost cutting measures.
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FTSE 250-listed pub company Marston's said its trading in the first weeks of its financial year have been encouraging, with a good performance for the company in the Christmas and New Year period. Marston's said its like-for-like sales for its Destination and Premium division in the 16 weeks to January 24 were up 2% year-on-year, with food and drink like-for-like sales rising 2%. In its Christmas trading period, covering the two weeks to January 4, the group said like-for-like sales for the division rose 4.8%, with 12.5% growth on Christmas Day.
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PZ Cussons, maker of bath products Imperial Leather and Original Source, reported a drop in both profits and revenue in the first half of its financial year, due to recent business disposals and weak trading in Africa. The consumer products group posted a pretax profit of GBP39.7 million for the half-year to end-November, down 7.9% on the prior year's GBP43.1 million profit, as revenue fell by more than 10% to GBP386.7 million from GBP431.8 million the year before.
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Irish building materials company Kingspan Group announced that it has acquired Belgian steel manufacturer Joris Ide Group for around EUR315 million, having confirmed it was in "advanced discussions" with the company earlier this week. Kingspan said the acquisition significantly extends its market reach in Europe. It said the EUR315 million is inclusive of debt, and is paying for the acquisition via a combination of cash, debt, and the issue of three million Kingspan shares to Bremhove NV, which is the holding company of the founder and major shareholder Joris Ide. It also said the acquisition is expected to enhance earnings by around 7% each year.
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Crest Nicholson Holdings reported a 44% increase in pretax profit in its last financial year, buoyed by higher house completions and average selling prices, and said it's on track to hit its revenue growth target of between 70% and 80% by 2016 compared with the 2013 level after a strong start to its new year. It also offered a sweetener to shareholders, saying it intends to move its dividend towards being covered 2.0 times by earnings over the next three years, reflecting its strong cash generation. The house builder reported a pretax profit of GBP116.7 million for the year to end-October, up from GBP80.9 million a year earlier, as revenue rose to GBP636.3 million, from GBP525.7 million.
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MARKETS
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London equities are trading mostly lower, as investors react to slower-than-expected growth in UK economic output amid lingering worries over Greece's future in the euro zone.
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FTSE 100: down 0.3% at 6,830.49
FTSE 250: up 0.02% at 16,473.87
AIM ALL-SHARE: down 0.6% at 690.60
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The pound is flat against the dollar, down from a high of USD1.5117.
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GBP-USD: flat at USD1.5078
EUR-USD: up at USD1.1278

GOLD: up at USD1280.73 per ounce
OIL (Brent): up at USD48.41 a barrel

(changes since end of previous GMT day)
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ECONOMICS AND GENERAL
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The UK economy grew at a slower pace in the fourth quarter, preliminary estimates from the Office for National Statistics showed. Gross domestic product grew 0.5% sequentially, slower than the 0.7% expansion seen in the third quarter and a 0.6% rise forecast by economists. Output increased by 0.8% in services and 1.3% in agriculture. In contrast, output decreased by 1.8% in construction and 0.1% in production. GDP grew 2.7% in the fourth quarter compared with the same quarter a year ago, which was slightly slower than the expected growth of 2.8%. In 2014, GDP was up 2.6%.
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UK mortgage approvals decreased more than expected in December, data from British Bankers' Association, or BBA, revealed. The number of loans approved for house purchases fell to 35,667 in December from 36,657 in November. It was forecast to fall to 36,500. After the temporary bottleneck associated with the implementation of the Mortgage Market Review in early 2014, overall approval numbers have been slowing through the rest of the year, the BBA said. However, the number of home mortgage approvals rose to 499,000 in 2014 from 459,000 in 2013.
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Leftist leader Alex Tsipras was sworn in as Greece's new prime minister on Monday, hours after clinching a deal with the right-wing Independent Greeks to form an anti-austerity government. President Karolous Papoulias administered the oath in a ceremony at the presidential palace in Athens, shorting after giving Tsipras the mandate to form a government. "I will always look after the best interests of the country," Tsipras told Papoulias. It was a departure from tradition, as the prime minister-designate is usually sworn in by the head of the Greek Orthodox Church. Tsipras is an atheist.
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The eurogroup is ready to work with the new Greek government, but there is very little support for a writedown of debt, Jeroen Dijsselbloem, head of the eurogroup said late Monday. Pointing out that a number of concessions have already been made to Greece, Dijsselbloem said, "Working within the Eurozone means they will comply with all the rules and agreements that we have within the Eurozone, and on that basis, we will support them where we can." He said that the eurozone has supported Greece by reducing interest rates and by allowing longer repayment periods.
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Standard & Poor's Ratings Services downgraded Russia's sovereign credit rating to below investment grade for the first time in more than a decade. S&P cut Russia's sovereign credit rating to "BB+" from "BBB-". The rating outlook is negative. Last month, S&P placed Russia on negative watch, citing the rapid deterioration of its monetary flexibility and the impact of the weakening economy on the country's financial system. Earlier this month, Fitch Ratings downgraded Russia to its lowest investment grade, followed by Moody's Investors Service.
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Travel bans were issued in several states in the densely populated north-eastern US including New York City as a storm forecast to dump up to 60 to 75 centimetres of snow closed in on the region. About 10 centimetres of snow accumulated in New York by late Monday afternoon and heavy snow was forecast to continue falling into Tuesday accompanied by strong wind gusts. A state of emergency was ordered in New Jersey, Connecticut, Massachusetts and parts of New York state. Travel bans were also put in place beginning Monday night.
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By Arvind Bhunjun; arvindbhunjun@alliancenews.com; @ArvindBhunjun

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