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LONDON (Alliance News) - The following is a summary of top news stories Thursday.
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COMPANIES
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Dixons Carphone said its Connected World Services arm has signed a deal with US mobile carrier Sprint Corp to open and manage a number of Sprint-branded stores in the US. Initially, Dixons Carphone will supply mobile phone retail expertise to Sprint for 20 new stores. If successful, the scheme will then be rolled out further, with plans to open up to 500 stores. In the second phase of the programme, Dixons Carphone will invest up to USD32 million to acquire a 50% stake in the joint venture with Sprint.
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Lloyds Banking Group is continuing its slow return to full private ownership, a stock exchange filing confirmed, with the UK government selling another 1% stake in the lender. According to the statement, the UK government now owns 15.90% of Lloyds Banking Group, having previously owned 16.87% of the lender's shares. At its peak, the taxpayer's stake in Lloyds Banking Group had been as high as 43%, which followed a GBP20.5 billion bailout during the financial crisis of 2007-09.
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Persimmon said it traded well in the first half of 2015, with legal completion volumes and revenue both rising, average selling prices higher, and its total forward sales value at the end of June up by 15%, defying the slowdown in planning applications and housebuying activity prior to the UK General Election in May. The FTSE 100-listed housebuilder said new-home legal completion volumes in the six months to the end of June rose by 7% to 6,855 units, with total revenue rising to GBP1.34 billion from GBP1.20 billion a year earlier. Visitors to its sites in the UK are in line year-on-year and cancellation rates remain low, the company said.
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Four potential buyers have been shortlisted for the sale of Tesco's Homeplus business in South Korea, which is set to fetch around USD6 billion, Reuters reports. Affinity Equity Partners, Carlyle Group, MBK Partners, and the private equity arm of Goldman Sachs have been shortlisted in the auction, Reuters said, citing a report in Korea Economic Daily.
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UK media and communications regulator Ofcom published its review of public service broadcasting in Britain on Wednesday, with a warning that the debate surrounding retransmission fees may result in extra funding but may result in more regulation due to the complexity of implementing a new scheme to govern this. Late in 2014, ITV said major pay-TV broadcasters should pay UK public service broadcasters, which also includes the BBC and Channel 4, fairly for the transmission of their channels and said the government should end what it describes as an effective subsidy for Sky and Virgin Media . While Ofcom said it agrees that the government could go further in pushing for fees to be paid to the public services broadcasters by the pay-TV companies, the regulator said there would be a number of challenges to this, which would depend on the precise nature of any regulatory change.
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Energy services company Hunting said its operating profit has plunged lower in the first half amid a declining rig count in the face of a falling oil price, though it said it is seeing tentative signs of a recovery, even as its full-year results look set also to show a huge drop in profit. The FTSE 250 company said the second quarter, as anticipated, saw continued declines in the oil and gas market, with an additional 34% decline in wells completed in the US, and 33% worldwide, compared to the first quarter. This "severe" decline has meant operating profit for the company in the first five months is down by 76% year-on-year.
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Specialty chemicals company Synthomer affirmed its expectations for 2015 as it said that robust trading in its Asian business will offset challenges in its European arm. The company said it has seen similar trends in its Europe and North America business in the second quarter, with volumes lower year-on-year owing to weaker demand in its paper and carpets businesses. In addition, and as expected by the company, the small margin benefit seen in the first quarter from declining raw materials prices did not continue into the second quarter, with modest raw material price inflation re-emerging.
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Construction and property company Kier Group said it has struck a deal to sell its fleet and passenger services business, Kier FPS, for GBP17.9 million in cash. Kier is selling the business to Alpha Holdco 1 Ltd, a vehicle managed by private equity firm Endless. The sale includes the transfer of the division's finance lease debt of around GBP32 million, Kier said. Kier has also signed a five-year deal with the division under which FPS will continue to supply fleet services to Kier's local authority highways and utilities business.
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MARKETS
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UK stock indices are trading mixed to lower mid-morning as investors reposition ahead of US nonfarm payrolls data later in the afternoon, while the pound rose sharply against its major trading partners after the UK construction sector was reported to have grown at its fastest pace in four months.
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FTSE 100: up 0.2% at 6,619.4
FTSE 250: down 0.2% at 17,675,71
AIM ALL-SHARE: down 0.1% at 761.52
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GBP: down at USD1.5609
EUR: up at USD1.1080
GOLD: down at USD1164.41 per ounce
OIL (Brent): up at USD62.19 a barrel
(changes since end of previous GMT day)
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ECONOMICS AND GENERAL
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Greek Finance Minister Yanis Varoufakis said he will resign on Monday if the "yes" vote wins the weekend's referendum on the term's of Greece's bailout. Asked in an interview on Bloomberg Television whether he would still be finance minister by Monday evening if a majority backs the reforms demanded by creditors in Sunday's referendum, Varoufakis replied, "I will not." He refused to speculate, however, on whether Prime Minister Alexis Tsipras would step down under these circumstances. "When you go into battle, you don't talk about defeat," he said. Opinion polls published this week suggested the Greek public is split over the vote.
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UK house prices dropped in June from May taking the annual growth to the lowest in two years, data from the Nationwide Building Society revealed. The annual increase in house prices moderated to a two-year low of 3.3% in June from 4.6% a month ago. Economists had forecast a 4.5% rise for June. "This maintains the gradual downward trend that has been in evidence since mid-2014, though this is the smallest annual rate of increase for two years," Robert Gardner, Nationwide's chief economist, said. House price growth continues to outpace earnings, but the gap is closing, he observed.
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The Chinese securities regulator has moved to relax collateral rules on margins loans in an attempt to prevent a cycle of price falls and forced selling in the country's stock market, the Financial Times reported. The China Securities Regulatory Commission said late on Wednesday that brokerages are free to set their own rules for demanding more collateral from clients when stocks acquired with borrowed money fall in value.
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Eurozone producer prices continued to decline in May largely due to notable weakness in energy costs, data from Eurostat showed. Producer prices fell 2% year-on-year in May following a 2.1% drop in April. The annual fall matched economists' expectations. Excluding energy, producer prices were down 0.3%, slower than the 0.4% decrease seen a month ago.
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The EU condemned the massive attack by Islamic State-linked militants on Egyptian military posts in the restive northern Sinai Peninsula that has killed at least 50 soldiers. Islamic militants, in a coordinated attack, struck several Egyptian army posts, with fight for Sheikh Zuweid police station still continuing. The attack comes just two days after Egypt's state prosecutor was killed in Cairo.
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By Arvind Bhunjun; arvindbhunjun@alliancenews.com; @ArvindBhunjun
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