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Reports UK

UK stock market morning note (July 31, 2014)

July 31, 2014, Thursday, 08:15 GMT | 03:15 EST | 11:45 IST | 14:15 SGT
Contributed by SVS Securities

The FTSE 100 is called to open slightly higher this morning following confirmation from the US Federal Reserve of another USD10bn tapering of its bond buying programme and effective reiteration of its low interest rate policy stance. Overnight we had domestic economic data out from GfK reporting that UK consumers were less optimistic in July with its monthly measure of confidence declining to -2, the first fall in 6 months. This fall was largely accounted for by a less upbeat assessment of the economy over the next 12 months. The economic diary today will focus on the US with the release of the latest weekly jobless claims. Commodity prices are flat to lower and on the foreign exchanges, the dollar is slightly weaker against the pound, euro and yen but all are trading within narrow ranges. It is another busy day of UK corporate results.

Company Announcements

Centrica

Half Year Results see revenue up 15% at GBP15.7bn with operating profit and earnings down 35% and 31% at GBP1.03bn and GBP530m respectively, the latter reflecting a 'challenging' market environment, mild weather in the UK and the Polar Vortex in North America. The interim dividend is raised 4% to 5.1p and it expects to complete its existing GBP420m share repurchase programme in H2 2014. A scrip dividend alternative is to be introduced in April 2015. Basic EPS declined 29% to 10.5p and full year EPS is expected to be in the range 21p-22p, taking into account a GBP40m charge for its wind investment and costs attributable to the Polar Vortex.

Lloyds Banking Group

Half Year Results see underlying profit rise 32% to GBP3.8bn with underlying income ahead 4% at GBP9.25bn. Underlying costs fell 2% to GBP4.67bn and the impairment charge declined 58% to GBP758m. Statutory PBT came in at GBP863m, which includes a charge for legacy issues of GBP1.1bn. It added that 2014 full year net interest margin is now likely to be around 2.45%, it expects run-off assets to be less that GBP20bn by the end of the year and full year statutory PBT to be 'significantly ahead' of H1. It added that it will apply to the PRA in H2 to restart dividend payments and will present a strategic update in the autumn.

Diageo

Preliminary Results see net sales up 0.4% at GBP10.25bn reflecting a mixed performance with growth in North America and stable Western Europe offset by weakness in emerging market economies. Operating profit before exceptionals declined 10% to GBP3.13bn and the full year dividend is raised 9% to 51.7p.

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