TOP NEWS SUMMARY: Brexit Can Be Revoked, EU Court Advisor Says

LONDON (Alliance News) - The following is a summary of top news stories ...

Alliance News 4 December, 2018 | 11:24AM
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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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Ferguson said it saw strong revenue growth in the first quarter of its financial year, as positive performances in the US and Canada offset a decline in the UK. The plumbing and heating specialist reported revenue for the three months to the end of October at USD5.55 billion, up 9.0% from USD5.12 billion the year before, with organic growth of 6.7%. At constant exchange rates, US revenue rose by 12%, while Canada revenue increased by 8.9%; however UK revenue fell by 9.5%. This led to trading profit in the quarter rising by 10% to USD432 million from USD393 million, aided by a 0.5 point rise in gross margin year-on-year to 29.6%. The UK continued to lag, as a result of weak repair, maintenance and improvement markets, as well as closed branches and the exit of low-margin businesses.
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Sage Group said it has appointed Non-Executive Director Jonathan Howell as chief financial officer, starting on Monday next week. The accounting software developer said that Howell will cease to be a non-executive director on commencement of his executive role. Howell has been on Sage board since 2013. Howell most recently was finance director for merchant bank Close Brothers Group for 10 years. He formerly was CFO of London Stock Exchange Group. Donald Brydon is chairman of both Sage and LSE. Howell replaces Steve Hare, who was promoted to chief executive officer back in November.
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Rentokil Initial said it has agreed to a bulk annuity insurance buy-in for the Rentokil Initial 2015 Scheme with the Pension Insurance Corp. Agreed between Rentokil, the trustee of the scheme and the PIC, the agreement will secure the benefits of scheme members, providing security for its 14,200 members, as it is hedged against longevity, interest rate and inflation risks. The scheme currently has liabilities of GBP1.50 billion. The buy-in, which provides a hedge against these liabilities, was secured in expectation of a full buy-out of the scheme, which will remove all future pension liabilities from Rentokil's balance sheet, resulting in a small cash surplus being returned to the group. Throughout the buy-out process, members of the scheme will be granted individual annuity policies with PIC, who will then become responsible for paying out benefits in full, providing security for their pension benefits for the future.
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Go-Ahead Group said it reached an agreement with the UK Department for Transport regarding contractual matters in relation to the Govia Thameslink Railway franchise. GTR is a joint venture between public transport firm Keolis, which holds 35% stake, and Go-Ahead, holding the reminder. The FTSE 250-listed firm said the deal resolves matters relating to the industry-wide failures concerning the introduction of the May timetable. Go-Ahead said the aim of the agreement is to build on recent performance and improve customer journeys. GTR has provided GBP15 million of funding this year for passenger enhancements. However, the Department of Transport said Tuesday it will oblige GTR to contribute a further GBP15 million towards tangible improvements for passengers.
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Ryanair Holdings and Wizz Air Holdings reported a rise in passenger traffic in November, compared to a year before, while Ryanair said it signed a labour agreement in Germany. Ryanair said group traffic rose by 11% to 10.4 million from 9.3 million reported in October last year. The result includes 300,000 passengers carried by Laudamotion. Ryanair's load factor remained unchanged year-on-year at 96%. In addition, Ryanair said it signed an agreement with the German pilot union VC, which will deliver basic pay increases and apply German labour law for all Ryanair's German-based pilots. Wizz Air carried a total number of 2.4 million passengers in November, which was up 11% year-on-year from 2.2 million. The group's traffic, measured in revenue passenger kilometres, rose by 14% to 3.9 million from 3.5 million reported in November last year.
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IG Group said its revenue in the half year that ended November 30 is expected to be lower than last year after regulatory measures took effect. The FTSE 250-listed spread betting firm and contracts-for-difference provider said it expects to report revenue about 6% lower than the first half a year ago. In the six months to the end of November 2017, IG posted record interim revenue of GBP268.4 million, suggesting revenue in the recent year was about GBP252 million. IG said EU financial regulator the European Securities & Markets Authority put in place the prohibition on offering binary options to retail clients at the start of July with restrictions to the provision of contracts for difference to retail clients effective from the start of August. As a result, the company's revenue in the four months since all measures were put into effect is estimated to be about 10% lower than in the same period last year.
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S4 Capital, led by former WPP founder Martin Sorrell, confirmed it will buy US-based online advertising and marketing services firm MightyHive for an enterprise value of USD150 million, launching a share issue to pay for deal. S4 Capital will fund the cash portion of the deal through the issue of 67.3 million new ordinary shares at 110 pence per share by way of a firm placing to raise GBP28.1 million and a placing and open offer to raise GBP45.9 million. The share issue will raise GBP74 million in total. The lead investor for the capital raising will be investment firm Stanhope Capital, and Stanhope's founder & chief executive officer, Daniel Pinto, will join S4 Capital's board.
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MARKETS
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London shares were lower as the euphoria over the temporary trade war truce between the US and China wore off. The pound was up against the dollar after positive UK construction PMI data. Oil was higher ahead of the OPEC meeting on Thursday, at which production cuts are expected. Wall Street was called for a lower open with major stock indices pointed down 0.4% to 0.5%.
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FTSE 100: down 0.3% at 7,042.42
FTSE 250: down 0.4% at 18,496.71
AIM ALL-SHARE: down 0.9% at 930.22

GBP: up at USD1.2824 (USD1.2740)
EUR: up at USD1.1402 (USD1.1355)

GOLD: up at USD1,239.25 per ounce (USD1,234.05)
OIL (Brent): up at USD63.02 a barrel (USD61.57)

(changes since previous London equities close)
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ECONOMICS AND GENERAL
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UK Prime Minister Theresa May will plead with MPs to back her Brexit deal as her government was embroiled in a constitutional row with Parliament. May will begin five days of Commons debate on her Brexit plan before a major test of her authority in a crunch vote on Tuesday next week. But before she even addresses MPs her government will come in for intense criticism over claims it is in contempt of Parliament by refusing to publish the full legal guidance given to ministers about the Withdrawal Agreement and Political Declaration negotiated with the EU. Commons Speaker John Bercow said there had been an "arguable case that a contempt has been committed" and ruled MPs should debate the issue on Tuesday.
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Britain could still unilaterally revoke its decision to leave the EU, a top EU court advisor argued, a week before Parliament is due to vote on a highly contentious Brexit deal struck with Brussels. To make the decision to reverse Brexit conditional upon the agreement of all 27 other member states would be "incompatible" with EU rules on exiting the bloc, according to Advocate General Manuel Campos Sanchez-Bordona. UK campaigners against Brexit and for a second referendum on leaving the EU welcomed the legal opinion. "Fantastic news!" said the Liberal Democrat party's Brexit spokesman, Tom Brake, a leading campaigner against Brexit. "If the recommendation is confirmed, there is now a simple way to #StopBrexit after a successful #PeoplesVote," Brake tweeted. The European Court of Justice is due to rule on the issue at a later date. The Luxembourg-based judges usually follow the advice of their advocate generals.
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The UK construction sector expanded at the fastest pace in four months in November, thanks to an increase in new work and consequent gains in job creation, survey data from IHS Markit showed. The construction Purchasing Managers' Index climbed to 53.4 from 53.2 in October. Economists had forecast a score of 52.5. A reading above 50 suggests growth in the sector. The UK construction sector expanded for an eight month in a row and the latest reading was the highest since July.
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A record GBP1 in every GBP3 of non-food purchases in the UK were made online in November, a report has found. But aggressive promotional activity by retailers ahead of Black Friday failed to lure shoppers, with like-for-like sales in November decreasing by 0.5% on last year, the British Retail Consortium-KPMG retail sales monitor found. The report said the proportion of non-food purchases taking place online increased to 33.8% in November – an all-time high. BRC Chief Executive Helen Dickinson said: "This month cemented Black Friday as an increasingly digital event, with a record GBP1 in every GBP3 of non-food purchases made online during the month. Weak consumer demand and falling confidence mean that retailers are in for a nerve-wracking run-up to Christmas."
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Eurozone finance ministers have reached a compromise on several proposals aimed at strengthening the currency bloc, they announced early Tuesday following all-night negotiations. The package of reforms under consideration would help the bloc to prevent financial crises as well as to tackle them when they occur. One proposal would strengthen the eurozone's bailout mechanism, the European Stability Mechanism, which lends funding to member states in need. It will be able to intervene in troubled economies earlier as well as manage programmes in conjunction with the European Commission. The ESM will be equipped with a long-promised "backstop" to better prevent banking-crisis contagion. Banks already pay into a fund established for this purpose, but in cases when their resources are not sufficient, the ESM can step in and offer "necessary firepower" without relying on taxpayer money, said Klaus Regling, the ESM's managing director. Under the new deal, this fund can be used earlier than 2024 - its initial year of activation - provided that banks reduce their own exposure to risk.
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Eurozone producer price inflation accelerated further in October, defying expectations, figures from Eurostat showed. Producer prices rose 4.9% year-on-year after a revised 4.6% in September. Economists had expected the rate to remain unchanged at September's original figure of 4.5%. On a month-on-month basis, producer prices increased 0.8% after a 0.6% rise in September. Economists had forecast a 0.5% climb.
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The world's biggest oil exporters have seen prices dwindle as US sanctions on Iran turned out to be less stringent than expected. As they mull production cuts this week, they must keep the global economy in mind. In light of oil prices plummeting from USD86 to below USD60 a barrel in recent weeks, major oil-producing countries are set to discuss ways to bolster prices on Thursday and Friday in Vienna. Analysts say that the 15 oil ministers of the Organization of the Petroleum Exporting Countries and 10 other countries, led by Russia, will prolong their 2016 agreement to coordinate how much oil they supply to the market. "It's very likely that new production cuts will be announced," analyst David Wech at the consultancy JBC Energy told dpa in Vienna. "This should stabilize the market, but I doubt whether the announcement will be notable and substantial enough to lead to a clearly positive price dynamic," he added.
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