TOP NEWS SUMMARY: Stobart And Virgin Team Up To Buy Flybe

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

Alliance News 11 January, 2019 | 11:23AM
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LONDON (Alliance News) - The following is a summary of top news stories Friday.
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COMPANIES
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Stobart Group's announcement that it is part of a consortium buying UK regional airline Flybe comes almost a year after it pulled out of an attempted takeover of the struggling Exeter-based carrier. Flybe accepted a 1 pence per share offer that values Flybe at GBP2.2 million, with the airline's closing price of 16.38p on Thursday having had given it a market capitalisation of GBP35.5 million. Flybe had listed on the London Main Market in December 2010 at a share price of 295p. Stobart is buying Flybe as part of a joint venture called Connect Air alongside Virgin Atlantic and DLP Holdings. DLP is owned by funds managed by Cyrus Capital Partners. DLP will own 40% of Connect, and Stobart and Virgin 30% each. As part of the deal, Connect will provide a GBP20 million bridge loan for Flybe's operational requirements. Further, once the acquisition is completed, the partners will provide up to GBP80 million of further funding.
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Builders merchant Grafton Group said it expects 2018 profit to be ahead of market expectations amid a "good" performance, which saw revenue grow strongly. For 2018, revenue grew 8.7% to GBP2.95 billion from GBP2.72 billion the year prior. On a constant currency basis, revenue was 8.4% higher and like-for-like revenue up 4.3%. Following the "good" performance in 2018, earnings before interest, taxes, and amortisation is expected to be "slightly" ahead of the top end of analyst expectations.
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Hastings Group Holdings announced a switch up at the top of its finance operations. Chief Financial Officer Richard Hoskins, who has been with Hastings since April 2015, has decided to retire from the role. In his place comes insurer MS Amlin's CFO John Worth. Hastings expects Worth to join the board "within the next few months". Worth has, in the past five years, also worked at the Co-operative Bank and insurer Hiscox.
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German discounter Lidl said it experienced its best December ever in the UK as it reported an increase in sales over the Christmas trading period. For the six weeks to December 30, the grocer recorded sales up 8% on the previous year, driven by a 33% increase in sales of its premium product range, Deluxe, as customers looked to treat themselves on the cheap. Christian Hartnagel, Lidl UK chief executive officer, said: "We have continued to expand our footprint across the UK over the past year, and it is no surprise that this contributed to more customers than ever before shopping with us in December and over the Christmas period.
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MARKETS
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London shares were higher following dovish comments by US Federal Reserve Chair Jerome Powell on Thursday. Oil rallied on optimism that the US and China can reach a reasonable trade deal. Wall Street was pointed to a flat to lower open ahead of US inflation data at 1330 GMT.
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FTSE 100: up 0.4% at 6,969.43
FTSE 250: up 0.2% at 18,467.12
AIM ALL-SHARE: up 0.4% at 910.95

GBP: flat at USD1.2770 (USD1.2775)
EUR: flat at USD1.1527 (USD1.1520)

GOLD: up at USD1,293.15 per ounce (USD1,289.75)
OIL (Brent): up at USD62.11 a barrel (USD61.33)

(changes since previous London equities close)
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ECONOMICS AND GENERAL
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UK economic growth improved for a second straight month in November, led by services and construction growth, and exceeded economists' expectations, but the growth momentum slowed over the three-month period, the monthly estimate from the Office for National Statistics showed. Gross domestic product grew 0.2% from October, when the economy expanded 0.1%. Economists had expected the pace of growth to remain unchanged. In September, GDP stagnated. Construction output rose 0.6% month-on-month in November, which was double the 0.3% growth economists had expected. Services output grew 0.3% from the previous month after a 0.2% increase in October. Economists had predicted a 0.1% gain. The main driver to growth was retail sales, which saw a boost from Black Friday promotions, which was partially offset by a slight contraction in legal activities and accounting, the ONS said.
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US Federal Reserve Chair Powell predicted no recession in 2019, and said the US central bank will be patient in determining when to hike interest rates. Fed Vice Chair Richard Clarida also said the Fed could afford to take a wait-and-see stance on interest rates if headwinds to the US economy from financial markets or global growth prove persistent. St Louis Federal Reserve Bank President James Bullard, a member of the Fed's Open Market Committee, likewise took a dovish tone, saying he will only support further hikes if inflation expectations pick up.
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US President Donald Trump travelled to Texas for a visit to the US-Mexico border as he intensifies his push for a wall, a demand that the opposition Democrats in Congress flat-out reject. The stalemate over funding the wall has resulted in a partial government shutdown that will reach day 21 on Friday, tying a record for the longest government shutdown in US history. Trump held a roundtable discussion with border guards, local politicians and fellow Republicans who testified to the need for building a wall or barrier to stop illegal immigration, human trafficking and the flow of illicit drugs. He said again Thursday he might declare a national emergency in order to circumvent Democrats in Congress who are blocking funding for a wall.
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UK Prime Minister Theresa May has reached out to union leaders as she makes an 11th-hour attempt to reach out to her political opponents to get her Brexit deal through the Commons. Downing Street said the prime minister had "constructive" phone conversations about her Brexit deal with trade union leader Len McCluskey of Unite, a Brexit supporter and close confidant of Labour leader Jeremy Corbyn, as well as Tim Roache of the GMB. Number 10 also confirmed ministers would "consider very seriously" moves by Labour members of Parliament to safeguard workers' rights after Brexit in an attempt to win support for her deal, if the backbench amendment was selected by the Speaker. The amendment would keep EU rules on pay and conditions, health and safety issues, and environmental standards.
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Securities Mentioned in Article
Security Name Price Change (%) Morningstar
Rating
Stobart Group Ltd 159.20 GBX 1.66 -
Flybe Group PLC 1.36 -
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