News Column

UK MORNING BRIEFING: Carillion Woos Balfour Beatty Shareholders

August 14, 2014

Tom Waite



LONDON (Alliance News) - UK shares have opened mostly flat Thursday after a poor reading on the German economy prior to the market open damped spirits.



Carillion continued to push for a merger with fellow construction firm Balfour Beatty, saying it has held meetings with a number of major Balfour Beatty shareholders since Monday. It also proposed a special dividend for Balfour Beatty shareholders and said it expects to report higher profits of its own for the first half of 2014.



Here is what you need to know at the UK market open:

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MARKETS

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FTSE 100: flat at 6,655.80

FTSE 250: up 0.1% at 15,543.19

AIM ALL-SHARE: flat at 755.71

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Hang Seng: down 0.5% at 24,764.44

Nikkei 225: closed up 0.7% at 15,314.57

DJIA: closed up 0.6% at 16,651.80

S&P 500: closed up 0.7% at 1,946.72

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GBP-USD: down at USD1.6676

EUR-USD: flat at USD1.3361



GOLD: up at USD1,312.62 per ounce

OIL (Brent): flat at USD104.60 a barrel



(changes since end of previous GMT day)

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ECONOMICS AND GENERAL

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Thursday's Key Economic Events still to come

(all times British Summer Time)



09:00 EU ECB Monthly Report

10:00 EU Consumer Price Index

10:00 EU Gross Domestic Product

13:30 US Export and Import Price Indices

13:30 US Jobless Claims

13:30 Canada New Housing Price Index

15:30 US EIA Natural Gas Storage

18:00 US 30-Year Bond Auction

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The average asking price for a house in the UK moderated in July, the latest report from the Royal Institution of Chartered Surveyors revealed on Thursday - showing a score of 49. That's down from 52 in June, and represents a five-month low. The decline in prices was centered on London, which had been enjoying a boom in prices through recent months. Analysts had called the surge unsustainable, however - and that was borne out by the July reading. Buyer inquiries in London tumbled at the sharpest rate since April 2008.

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The German economy contracted more than expected in the second quarter as the extremely mild weather lifted growth rates notably at the beginning of the year. Gross domestic product fell 0.2% sequentially, after expanding 0.7% in the first quarter, preliminary figures from Destatis showed. This was the first decline since the first quarter of 2013. GDP was forecast to drop marginally by 0.1%.

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The French economy stalled for the second straight time during three months ended June, preliminary data from the statistical office Insee showed. Quarter-on-quarter, gross domestic product remained flat in the second quarter. Economists had forecast the economy to grow 0.1% after staying steady in the first quarter.

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A major effort to evacuate Iraqi civilians besieged on a mountain by Islamist militants looks unnecessary, the US said Wednesday after a reconnaissance team found "far fewer" people than believed on Mount Sinjar in northern Iraq. The US had been weighing options, including airlifts, to rescue members of the Yezidi religious minority who fled their homes in the face of territorial gains by militants from the group calling itself the Islamic State. For days, some tens of thousands of civilians had been feared to be on the mountain without shelter and with little food and water. The US carried out airstrikes to disrupt militant forces, while the US, British and Iraqi militaries dropped supplies to the refugees.

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A five-day extension to the ceasefire between Palestinian militants and Israel went into force early Thursday, agreed at the last minute the night before. Israel launched airstrikes shortly after midnight in response to rocket fire from Gaza, but none since 3am, and no rockets were fired since then, a spokeswoman for the Israeli military said. Hamas, which controls Gaza, denied launching the latest rockets at 10pm Wednesday. Three rockets landed in open areas while a fourth was downed over the town of Netivot, an Israeli spokeswoman said. Gaza Health Ministry spokesman Ashraf al-Qedra said that no injuries were reported in the retaliatory airstrikes, which struck unoccupied areas. The latest truce, to expire Monday, was to give indirect, Egyptian-mediated negotiations in Cairo more time to forge a long-term ceasefire.

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A "new model" relationship between the US and China is key to maintaining peace and stability in the Asia-Pacific region, US Secretary of State John Kerry said Wednesday at the conclusion of a trip that included stops in several Asian countries. Kerry highlighted US-China cooperation on Iran's nuclear programme, monitoring North Korea's nuclear aspirations and promoting peace in South Sudan. As the two largest greenhouse gas emitters, China and the US had committed to significantly reducing emissions, he said in a speech at the East-West Center in Hawaii, after visits to Myanmar, Australia and the Solomon Islands. Kerry also said the US opposed the use of intimidation, coercion or force to assert conflicting territorial claims in the Asia-Pacific region.

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The United Nations World Health Organization said Wednesday the current Ebola outbreak in West Africa has now infected nearly 2000 people in the four countries most impacted by the disease, with more than half of those ending in death. The UN agency's latest update show 128 new cases of Ebola virus disease and 56 deaths reported from Guinea, Liberia, Nigeria, and Sierra Leonebetween August 10 and 11. The figure brings the total number of cases to 1,975 and deaths to 1,069.

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BROKER RATING CHANGES

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BERNSTEIN RAISES PRUDENTIAL PRICE TARGET TO 1650 (1500) PENCE - 'OUTPERFORM'

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BERENBERG CUTS MONITISE PLC PRICE TARGET TO 42 (74) PENCE - 'HOLD'

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COMPANIES - FTSE 100

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AstraZeneca PLC said it has started a phase III trial for tralokinumab, a potential treatment for patients with severe, inadequately controlled asthma, developed by the company's global biologics research and development arm MedImmune. In a statement, the drugs company said the Phase III programme will evaluate the safety and effectiveness of tralokinumab in reducing the rate of asthma exacerbations in adults and adolescents with severe, inadequately controlled asthma despite receiving inhaled corticosteroids plus long-acting 2-agonist.

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Barclays PLC's index unit has drawn offers from Nasdaq OMX Group Inc.Bloomberg LP, and CME Group Inc, Bloomberg reported, citing people with knowledge of the matter. According to one of the people, who did not want to be identified because the matter isn't public, the Index Portfolio and Risk Solutions business could fetch about USD1.0 billion.

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A selection of the biggest drugmakers in Europe are understood to be among the bidders for US biotechnology firm InterMune Inc, Bloomberg reported on Thursday, citing people with knowledge of the deal. Goldman Sachs Group Inc and Centerview Partners LLC are advising InterMune on the bids. Shares in the company were up 14% in New York trade, giving the company a market value of USD5.62 billion. GlaxoSmithKline PLC, Actelion Ltd, Sanofi SA and Roche Holding AG are all thought to be interested in acquiring firm, with the sources suggesting Sanofi is showing the most interest.

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COMPANIES - FTSE 250

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Subprime lender Provident Financial PLC said it has agreed to acquire Duncton Group Ltd, which operates under the Moneybarn brand, for GBP120.0 million, and simultaneously unveiled plans to raise an equivalent amount in a placing of new shares. In a statement, Provident Financial said it is acquiring Moneybarn, which provides secured car finance to non-standard customers in the UK and operates mainly through brokers, in order to broaden its product offering and to create a "third leg" of earnings to complement its consumer credit and its credit card divisions.

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Ophir Energy PLC swung to a profit for the first half, boosted by the sale of its stake in three blocks in Tanzania to Pavilion Energy PLC which will leave the company well financed into 2015, while it also said it would launch a share buyback of up to USD100 million. The Africa-focused oil and gas firm said pretax profit in the six months to June 30 was USD589.4 million, up from the USD19.4 million loss posted a year ago. That was primarily driven by the sale of its 20% interest in Blocks 1, 3 and 4 at the Taachui project in Tanzania to Singapore's Pavilion Energy for USD1.25 billion. A further USD38 million is payable on the final investment decision. The board also approved a share buyback programme of up to USD100 million.

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CineworldGroup PLC reported a sharp drop in profits for the first half of its financial year, partially due to acquisition costs of Cinema City, but said the acquisition of the cinema chain helped drive a 33% increase in revenue, boosted by the release of 'The Lego Movie' and the X-Men and Spiderman sequels. The group raised its interim by 2.7% to 3.8 pence per share. The cinema chain - which operates under the brands Cineworld, Picturehouse, Cinema City, and Yes Planet - reported strong revenue growth in the period, up 33% to GBP268.6 million compared with GBP201.6 million a year earlier, boosted by the recent acquisition of Cinema City. Box office revenue and admissions on the other hand were lower, due to the World Cup, as people opted to watch football rather than head to the cinema. However, the group's pretax profit fell by almost 16% to GBP13.9 million, down from GBP16.5 million in the first half of 2013, hit by a number of higher costs it booked during the period, including acquisition costs.

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Carillion PLC said it has held meetings with a number of major Balfour Beatty PLC shareholders since Monday, as it seeks to push through a merger between the two construction companies. Carillion said it continues to believe in the "powerful strategic logic" and financial benefits of a merger with Balfour Beatty and is therefore continuing to consider its position. Carillion said it has proposed that Balfour Beatty's shareholders receive an additional cash dividend, or equivalent, of 8.5 pence per Balfour Beatty share at the time that Balfour Beatty's final 2014 dividend would otherwise have been paid in 2015. The construction company also said it will report a 5% increase in pretax profit for the first half of 2014, although revenue will dip 5% to GBP1.87 billion from GBP1.96 billion. Ahead of its results to be published next week, Carillion said it will post pretax profit of GBP67.5 million for the six months ended June 30, up from GBP64.2 million a year earlier.

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Gold producer Centamin PLC reported lower profit for the second quarter as operating costs rose due a drop in the grade of ore being delivered to its main processing plant, but it predicted that the grade will rise again and it announced a maiden interim dividend. The company reported a pretax profit of USD11.3 million for the three months to June 30, down from USD51.7 million a year earlier, as revenue declined to USD102.6 million, from USD134.3 million. For the first six months of 2014, the company reported a pretax profit of USD31.9 million, down from USD123.6 million a year earlier, as revenue declined to USD205.3 million, from USD272.5 million. The company said it would pay a maiden interim dividend of 0.87 cents a share.

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Derwent London H1 EPRA Pretax Profit GBP32.0M Vs GBP28.0M; NAV Per Share 2,572 Pence Vs 2,264 Pence In Dec; Interim Dividend 11.65 Pence Vs 10.75 Pence

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Rank Group FY Pretax Profit Of GBP14.4M Vs GBP42.7M; Group Revenue Of GBP707.7M Vs GBP625.0M; Increases Dividend By 10% To 4.50p Per Share; Says H2 Improved On Challenging H1

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COMPANIES - LONDON MAIN MARKET AND AIM

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Newly-listed online property portal business Zoopla PropertyGroup PLC Thursday said it has continued to experience strong growth across all areas of the business since April, with website and mobile traffic up 34% on the previous year. Zoopla, which operates the UK's second largest property website after Rightmove.co.uk, owned by Rightmove PLC said it averaged 45.5 million monthly visits across its website and mobile app in the four months to July 31.

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Property investors Helical Bar PLC said it has acquired a portfolio of 11 industrial and distribution warehouse assets from a separate account client of Rockspring Property Investment Managers in a deal worth GBP9.7 million, reflecting a net initial yield of 8.0%. The portfolio, with a total floor area of circa 460,000 square feet, comprises seven multi-let industrial estates located in Gloucester, Northampton, Milton Keynes, Bedford, Slough and Barking and four single let distribution warehouses properties in Bolton, Telford, Cardiff and Rugby.

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The board of mining firm African Minerals Ltd is considering ending the role of Frank Timis as the company's executive chairman and has pledged to strengthen its governance following an internal probe into whether Timis benefited from a USD50 million payment to a Cyprus-registered iron ore company, the Financial Times reported. Roger Liddell, a senior independent director of the company, said at its annual shareholder meeting that Timis should give up his role as executive chairman in the longer term, the FT reported.

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COMPANIES - INTERNATIONAL

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Electronics maker Samsung unveiled its latest addition Wednesday to its smartphone line, the Galaxy Alpha. The less than 7 mm, super thin smartphone has a metal frame, the company said. It features a 4.7-inch high-definition display, which is a little smaller than Samsung's flagship Galaxy 5. which has a 5.1-inch screen. The device is equipped with a 12-megapixel main camera and a 2.1-megapixel front camera, according to the statement. The announcement comes only weeks before Apple is expected to announce its iPhone 6, which is thought to offer a 4.7-inch display.

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Cisco plans cut up to 6,000 jobs as part of major restructuring efforts, after another quarter of slipping profits, the San Jose-based networking company said Wednesday. The layoffs represent about 8% of the firm's work force. A year ago, Cisco had announced plans to cut about 4,000 jobs. Cisco's fourth-quarter net income fell 1% to USD2.2 billion compared to USD2.3 billion a year ago, according to the statement.

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Thursday's Scheduled AGMs/EGMs



Polymetal International

Ncondezi Energy

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Source: Alliance News


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