Anchor Capital: Essential market review, 4 March

Locally, the All Share Index ended the month 4.1% higher (and up 7.2% YTD) closing at an all-time record level of 53,374.9 on 24 February buoyed by a surge in resource stocks. The RESI 20 rose an impressive 8.7% MoM, with the FINI-15 and INDI-25 gaining 3.4% and 3.2%, respectively. While it recorded ups and downs during the month the rand ended February virtually unchanged (-0.1%), while the gold price dropped 5.5% MoM, hitting a seven-week low during the month. On the economic front GDP grew at 4.1% QoQ, beating estimates after manufacturing and mining rebounded from a series of strikes last year.

Top-20 performers: February 2015
See the attached PDF

Despite ending the month relatively unchanged the rand fell to its weakest intraday trading level in 12 years vs the US dollar during February. This rand volatility saw rand-hedge counters perform well with nearly half of the shares among the top-20 performers offering investors some form of currency protection. At the same time, February also saw a deluge of results releases with most of the bottom-20 performers having released disappointing results or trading updates and gold counters dragged down by the weaker gold price and a stronger US dollar. Conversely, the 20 best performers saw positive results releases buoy their share prices.

Northam Platinum emerged as the best-performing share among the FTSE JSE All Share Index constituents, rising 33.3% for the month after swinging to a first-half profit on the back of increased group production. This follows protracted strikes at its Zondereinde mine in the year-ago period. A higher rand basket price for platinum group metals (PGMs), due to the weaker rand vs US dollar exchange rate, also contributed to the R354.1mn profit vs a R96mn loss in the same period last year. The company recently agreed to buy the mining assets and rights to Aquarius Platinum’s Everest operation in South Africa for R450mn.

Although initial reports indicated that Bidvest had offered to buy the whole of pharma group Adcock Ingram (+21.8% MoM) which it doesn’t already own (Bidvest has a 34.5% stake), Bidvest said on Friday that it would not buy all of the company. This comes as the Adcock share price continued to trade around Bidvest’s planned offer price of R52/share, closing the month at R51.65/share. Press reports have valued the deal as potentially being worth R6bn. Adcock Ingram also released its interim results last month which showed that revenue increased to R2.72bn from R2.69bn posted in the corresponding period a year ago and diluted EPS rose to ZAc83.80 from ZAc60.70 in the year-ago period. Coming in third spot for the month with a 17.6% gain was Telkom which has seen its share price rise 17.1% YTD. In mid-February Telkom announced further restructuring plans in a continuing push by the company to lower costs but, more importantly for the share price, Telkom was also chosen by Cabinet as the lead agency for a countrywide broadband roll-out.

During the month Cashbuild (+17.2% MoM) released a trading statement indicating that it expects 1H15 EPS to be between 30% and 40% YoY higher. Cashbuild was followed by Capevin Holdings which rose 16.6% MoM and New Europe Property Fund (Nepi, +16.5% MoM). During February Capevin’s share price rocketed closing at its highest level ever of R9.91/share on Friday. The company has a stake of c. 29% in drinks-maker Distell which reported growth in its local operations last October. Nepi’s performance was likely due to the fact that it offers local investors fast-growing exposure to offshore real-estate markets and is a rand hedge.

JD Group (+16.2% MoM) and BHP Billiton (+15.6% MoM) also managed to record share price growth above the 15% level for the month, albeit the latter from pretty depressed levels. JD Group saw its share price bounce after 100% of its shareholders voted in favour of selling its finance book to French bank BNP Paribas for R4.6bn. BHP Billiton released 1H15 results which beat analyst expectations even though lower iron ore and petroleum prices saw the company record a drop in revenue to $29.9bn from $33.9bn in 1H14 and a decline in underlying profit ($5.35bn), which came in well below the $7.8bn posted in 1H14, but was nevertheless far better than the $4.89bn analysts had been expecting.
Petmin’s (+14.7% MoM) share price surged after it reported robust interim results, posting a 25% YoY increase in headline earnings. The coal and iron ore company has been under pressure on the back of the significant drop in the iron ore price (which traded at a five-and-a-half-year low of $61.10/tonne in February) and the difficult local operating environment. Nevertheless, Petmin managed to increase production at its flagship mine, the Somkhele anthracite operation in KwaZulu-Natal which also produced more thermal coal. Rand hedges, Mondi and Mondi Plc rose 14.2% and 13.5%, respectively, with the Group reporting FY14 results last month which saw the paper and packaging company’s revenue decreasing marginally to EUR6.40bn vs EUR6.48bn reported a year ago. However, basic EPS rose 22.1% YoY to EUR0.97 despite tough global markets and Mondi said that at 17.2% its returns on capital expenditure were well above its cost of capital, making projects “strongly value-enhancing”. CEO David Hathorn also noted that all of the group’s business units had contributed strongly to the results.

Steinhoff (+12.6%), which owns 86% of JD Group, also benefitted from the approval of the BNP Paribas deal mentioned above. It was followed closely by EOH Holdings (+12.5%), which released a trading statement for the six months ended 31 January 2015, saying that management expected EPS to be between ZAc275.8-ZAc298.7, reflecting a YoY increase of between 20% and 30%.

Anglo American (+12.2%) saw its share price increase despite the company reporting a significant FY14 net loss of GBP1.62bn and its revenue tumbling 7.7% YoY to GBP17.5bn. Anglo American told investors that it aims to complete its iron ore Minas Rio project at $400mn below budget, that it would maintain a range of cost-cutting measures and also said it believed the group would be able “…to ride out the storm of volatile commodity prices” and has a “diversified enough portfolio” to protect it. Omnia Holdings’ share price (+11.3% MoM) has been under pressure since it peaked at R242/share in September 2014, with the share price closing at a 52-week low of R167 on 22 January, however last month it rebounded to close at R190/share at the end of February.

Old Mutual (+10.7%) released FY14 results during the month which showed that total revenue was down 21.9% YoY to GBP15.48bn, while its diluted basic EPS came in at GBp11.50 vs GBp13.90 recorded in the previous year. The company said that its profit fell after the average rate of the rand weakened c. 18% vs the pound. However, it added that its UK and rest of Africa operations were expected to increase their portion of group earnings at a faster rate than the South African business (currently its main profit source).

Paper and plastics packaging group, Mpact (+10.6% MoM) reported interim results which saw it post a 9.7% YoY increase in revenue and a 20.9% YoY rise in underlying EPS to ZAc77.0/share despite a difficult operating environment as the weaker rand improved the company’s export competitiveness and the relative competitive position of “the group’s manufactured products vs imported substitutes – especially in the paper business”.

Iron ore, coal and base metals producer Exxaro (+10.2%) reported a lower-than-expected FY14 loss (due to a write-down in a Congo Republic iron-ore project) and a good performance in its coal arm which saw investors piling into the stock after the counter’s c. 30% YoY loss in 2014. Finally Truworths (+9.7%) and Transaction Capital (+9.1%) made up the remainder of the top-20 performers with both posting single-digit gains. Truworths reported relatively flat half-year earnings during the month but investors seemed to welcome a move by the clothing retailer to hike its dividend (the interim dividend rose 9% YoY to ZAc236/share).

Bottom-20 performers: February 2015 performance
See the attached PDF

As the price of gold (-6% MoM) retreated in February, dented by a strong dollar and expectations of a US interest rate hike, it drove down stocks related to the gold and mining sector while at the same time some disappointing results releases also weighed on several shares in the bottom-20. However, while gold and construction counters (impacted by labour unrest, delays on major local construction projects, and poor economic growth) featured prominently among the month’s worst performers it was junior miner Coal of Africa’s share price which continued to bear the brunt of pressure and the company, which lost 66.1% of its value in 2014, was down a further 17.6% in February – the month’s worst performer. This was despite a five-point turnaround strategy and attempts to reposition itself through the sale of its non-core assets, the finalisation of a short-term loan and a share placement.

Gold Fields (the best performer in January) was the second-worst performer for the month giving back 16.9% of January’s 48.6% MoM gain to close February at R428.22/share. The gold miner reported a QoQ decline in 4Q earnings last month on the back of softer gold prices while its announcement of a delay to plans for its South Deep mine saw the share price plummet. Gold Fields said in mid-February that it would not achieve its goals for a planned 2015 build-up of the mine due to “a skills shortage” and issues it had with underground infrastructure. Another gold counter, Harmony (-15.8%) was the third-worst performer, as it posted a 2Q15 net loss of ZAc10/share and revenue fell to R3.72bn (from R4.43bn in 2Q14). Its gold production shrank 10% to 271,963 oz.

PPC (-15.3% MoM) has been mired in controversy since September 2014 when its now-former CEO Ketso Gordhan resigned suddenly and then demanded to be reinstated. The ensuing drama brought issues at the company to the fore and resulted in shareholders demanding a vote on the replacement of board members. A new board was elected in early February but so far this has seemed to do little to restore investor confidence in the stock. Aveng (-12.4% MoM) released 1H15 results during the month which showed that revenue decreased by 14% YoY to R23.9bn, net operating earnings were down 19% YoY to R413mn (1H14: R510mn) and HEPS plummeted 58% YoY to ZAc34.5. The company blamed the poor performance on the completion of multi-year major mining and infrastructure-related contracts within the Construction and Engineering Australasia and Asia segment and the non-renewal of three gold-mining contracts at Aveng Moolmans.

Despite a successful rights issue in January and undertaking a restructuring of the business, Ellies holdings’ share price (-12.0% MoM) continued to show weakness. Ellies was followed by Tiger Brands (-11.8%), Murray & Roberts (-11.6% MoM), Astral Foods (-11.3%), Bell Equipment (-11.0%) and Shoprite (-10.2%), which all recorded double-digit MoM declines. During the month in review, Tiger Brands reported a slowdown in quarterly sales due to weak local demand and a poor performance at its Nigerian Dangote Flour Mills unit. Murray & Roberts released dismal results as its revenue decreased 15.2% YoY to R15.9bn, operating profit declined 28.0% YoY to R457mn and the Group’s order book dropped 15.8% YoY to R37.8bn as fewer new projects were secured. However, HEPS from continuing operations increased 38.6% YoY to ZAc81.

Despite Astral Foods saying that it expected its interim headline EPS to improve by 120% YoY due to the healthy global maize and soya bean crops, which had resulted in a softening of grain prices (which benefited feed prices and livestock production costs), the company’s share price remained under pressure in February. With the construction and mining sectors under pressure, heavy equipment manufacturer Bell Equipment saw the decline in its share price continue. While Shoprite reported that 1H diluted headline EPS rose 8.6% YoY to ZAc370.2 (a slightly faster pace than the 8% growth in the same period last year), the counter still retreated MoM amid concerns around the health of the local consumer.

Another retail counter Pick ‘n Pay (-8.2%) also saw pressure on its share price. Local retailers have been struggling over the past few years as heavily indebted SA consumers grapple with high unemployment and slow economic growth. Spur (-6.8%) reported a decline in earnings last month, posting a 28.2% YoY drop in headline EPS to ZAc61.15 in the six months to December. However, the Group did indicate that a share-based payment expense of R32.96mn related to a BEE deal with Grand Parade Investments had affected its performance and excluding this, headline EPS would have increased 15.2% YoY. With a protracted period of Eskom loadshedding in effect, companies in the restaurant industry have also warned that this would likely affect turnover. Hospitality Property Fund (-6.5% MoM) reported interim results which showed a 7.4% YoY decline in distributable earnings as the Group, which has for a few years now been trying to sell most of its smaller properties in secondary areas, struggled with the widespread power cuts. Although it has generators installed the company said it couldn’t pass these costs on to tenants because of the way its lease agreements are structured.

The lower gold price also impacted DRDGold, which lost 6.4% MoM despite reporting a stronger half-year performance where it narrowed its interim loss to R2.8mn vs a loss of R26.4mn in the same period last year. Technical problems with the introduction of the FFG (flotation fine grind) circuit which was intended to increase its gold recovery efficiencies by up to 20% has haunted the share price over the past few months. Assore fell 5.8% MoM as a combination of depressed commodity prices and spiralling costs saw its net profit drop by more than 50%. Added to that, low demand from China also significantly impacted results. Aspen (-5.7%) released a 1H15 trading update during the month which missed expectations as its guidance indicated an overall earnings disappointment.

Delta Property Fund lost 5.4% MoM. The company said on Monday that it expected growth in distribution a share of between 15.01%-16.93% for the year to February. Impala Platinum (-5.3%) last month indicated that it had cut capital spending even as its 1H profit plummeted 54% following the prolonged five-month strike at its biggest operation (in Rustenburg) last year. Finally, amongst the worst performers Wilson Bayly Holmes-Ovcon (WBHO) dropped 5.2% MoM after it posted 1H15 results which showed that overall HEPS decreased by 8% YoY.

Top-20 performers: YTD performance:
See the attached PDF

Following a stellar performance by gold counters in January, on the back of a robust gold price, and despite some of these shares retreating in February, YTD the top-20 performers still included several gold shares as Sibanye Gold (+36.6%), Harmony Gold (+33.0%), DRDGold (+29.0%) and AngloGold Ashanti (+28.9%) all posted strong YTD gains. Northam Platinum was also the top-performer among the top-20 YTD gainers – up 40.7%, while Cashbuild (another top MoM performer) gained 32.8% YTD coming in fourth spot.

Hudaco Industries’ share price has gained 28.1% YTD, buoyed by the agreement in January between the company and the South African Revenue Services (SARS), which will see Hudaco paying SARS a final settlement of R312mn vs an expected R1.9bn. Mondi Plc (+26.4%), Mondi Ltd (+26.0% YTD) and EOH Holdings (24.8%) all MoM top performers also featured prominently among the YTD winners coming in at eight, ninth and tenth position among the top-20 YTD shares. These were followed by clothing retailers Foschini (+24.2%) and Lewis Group (+23.9%). Foschini’s January sales update showed that the group posted a sales increase of 16.2% for the period 28 December 2014 to 14 January 2015 while Lewis offered a positive trading update in January.

Mediclinic’s (+22.4%) share price continued to be buoyed by the Swiss National Bank’s move in January to no longer hold the Swiss franc at a fixed exchange rate with the euro – Mediclinic derives c. 50% of its profits from Switzerland. JD Group gained 21.2% YTD (see comment above) followed closely by Nepi and Capitec Bank – both up 20.6% YTD. Combined Motor Holdings, Octodec, Spur and BHP Billiton constituted the remainder of the Top-20 YTD performers, gaining 19.5%, 18.3%, 18.2% and 17.7% YTD, respectively.

Bottom-20 performers: YTD performance:
See the attached PDF

PPC (-34.1%) emerged as the worst performer YTD followed by perennial underperformer Coal of Africa in second spot with its share price declining by 26.3%. A dire local operating environment for construction and related counters was further evidenced by the number of these companies featured among the bottom-20 YTD performers. Added to that, results released in February by most of the construction counters were very disappointing piling further pressure on to their share prices. Stefanutti Stocks (-23.1% and the third-worst performer YTD), Murray & Roberts (-18.2%), Invicta Holdings (-16.0%), Bell Equipment (-16.0%), Group Five (-14.5%), Consolidated Infrastructure (-11.5%) and Aveng (-10.3%) all featured prominently among the list of worst performers.

Last month Grindrod (-18.6%) released a FY14 trading statement saying that HEPS was expected to decrease by between 7% to 12% YoY, while Grand Parade Investments (-12.2%), which posted results on Monday, released a trading statement in February. The Group is loss-making at an HEPS level, due to the initial Burger King roll-out before the business achieves scale.

Lonmin sank 10.9% with Glencore saying in February it would exit its investment in the miner. Business Day also reported that LonMin is bracing for a court battle with members of the Bapo ba Mogale community, who live on the land it mines. They will be going to court this week in a bid to scupper the miner’s R664mn empowerment deal, which was pushed through only three months ago.

Tongaat-Hulett lost 10.8% YTD followed by the aforementioned Aveng, Coronation Fund Managers (-10.2%), African Oxygen (Afrox, also down 10.2%) and York Timber Holdings (-10.0%). Afrox released FY14 results which showed that revenue increased marginally to R5.83bn from the previous year. However, basic and diluted EPS dropped to ZAc26.80c from ZAc100.10c reported a year ago. Looking ahead the company has indicated that its main focus in FY15 would be the effective restructuring of the Group with Afrox saying that benefits should start to be progressively realised from 4Q15.

Pinnacle (-7.3%), RCL Foods (-7.2%), Nampak and MTN Group (both down 6.7%) accounted for the remainder of the top-20 worst performers YTD with all of these shares posting single-digit YTD declines. Despite reporting better 1H15 results RCL Foods is still down 7.2% YTD. The company indicated that actual revenue was up 38.8% YoY to R12.03bn while diluted headline EPS from continuing operations stood at R0.70, compared with R0.05 posted in the same period in the previous year. Finally, MTN Group (-6.7% YTD) indicated last month that its FY14 headline EPS was expected to be between 5.0% and 15.0% YoY higher. Earlier in February the share price had increased on the back of media reports that it might buy a majority stake in fixed-line provider, Telkom.

Yesterday, the Illinois North Central No.2 Yellow corn spot prices rose 1.0% to $3.62/bushel.

At 06:00 SAST today, gold prices advanced 0.3% to trade at $1,207.09/oz. Yesterday, gold declined 0.3% to close at $1,203.74/oz.

Yesterday, copper declined 1.4% to close at $5,841.75/mt. Aluminium closed 0.4% lower at $1,781.25/mt.

The yield on benchmark government bonds rose yesterday. The yield on 2015 bond advanced to 6.16% while that for the longer-dated 2026 issue rose to 7.69%.

At 06:00 SAST, the US dollar is trading 0.2% lower against the South African rand at R11.7467 , while the euro is trading 0.2% lower at R13.1215. At 06:00 SAST, the British pound has declined 0.2% against the South African rand to trade at R18.0371.

Yesterday, the euro declined against most of the major currencies. Meanwhile, data showed that producer prices in the eurozone dropped more than expected in January, while German retail sales rose more than anticipated in January.

Moving ahead, market participants will keep a tab on Markit services PMI data across Europe and eurozone retail sales data due later today.

At 06:00 SAST, the euro dropped marginally against the US dollar to trade at $1.1171, while it has gained slightly against the British pound to trade at GBP0.7275.

The British Retail Consortium (BRC) shop price index dropped 1.7% in the UK on an annual basis in February, higher than market expectations for a fall of 1.2%. The BRC shop price index had recorded a drop of 1.3% in the prior month.

The construction PMI climbed unexpectedly to a level of 60.10 in the UK. In the prior month, the construction PMI had registered a reading of 59.10.

On a quarterly basis, the seasonally adjusted gross domestic product (GDP) registered a rise of 0.6% in 4Q14, in Switzerland, higher than market expectations for a rise of 0.3%. In the previous quarter, GDP had climbed by a revised 0.7%.

In January on a monthly basis, retail sales in Germany recorded a rise of 2.9%, higher than market expectations for an advance of 0.4%. In the previous month, retail sales had registered a revised rise of 0.6%.

In the eurozone, the producer price index (PPI) registered a drop of 0.9% in January on a monthly basis, higher than market expectations for a fall of 0.7%. The PPI had fallen 1.00% in the prior month.

In February, the number of new vehicles sold domestically in the US recorded a drop to 13.13mn, compared with market expectations of a fall to 13.40mn. Number of new vehicles sold domestically had registered a level of 13.54mn in the previous month.

The GDP in Canada recorded a rise of 0.3% in December on a monthly basis, higher than market expectations for an advance of 0.2%. In the prior month, the GDP had fallen 0.2%.

The Markit Economics has reported that Markit composite PMI eased to 50.00 in Japan, in February. In the previous month, Markit composite PMI had recorded a reading of 51.70.

In February, the HSBC/Markit services PMI index in China advanced to 52.00. The HSBC/Markit services PMI index had recorded a level of 51.80 in the prior month.

In 4Q14, on a quarterly basis, the seasonally adjusted GDP in Australia registered a rise of 0.5%, lower than market expectations for an advance of 0.7%. In the previous quarter, GDP had registered a revised rise of 0.4%.

Steinhoff International Holdings: The retailing company, in its 1H15 results, indicated that revenue from continuing operations increased 11.8% to R64.62bn, compared with the same period of the previous year. Its headline EPS from continuing operations rose to 248.40c from 232.80c recorded in the corresponding period of the prior year.

Barclays Africa Group: The banking company, in its FY14 results, revealed that its total income was up 6.3% to R63.13bn, compared with the last year. Its diluted basic EPS was R15.59, compared with R14.13 reported in the prior year. The company does not expect its net interest margin to improve further in FY15, although its loan growth is anticipated to increase. Furthermore, it announced that it has applied for a Nigerian banking licence and wants to take over the Egypt and Zimbabwe unit which is still run by its parent company.

Royal Bafokeng Platinum: The platinum mining company, in its FY14 results, indicated that revenue was R3.77bn, 15.9% up compared with the preceding year. Its diluted EPS stood at R2.38, compared with R1.73 reported in the previous year. The company stated that it does not expect platinum group metal prices improving significantly from FY14 levels in the short term, and would therefore continue to focus on containing cost increases in FY15.

Cashbuild Limited: The building materials retailing company, in its 1H15 results, stated that revenue increased 11.7% to R3.97bn from the same period a year ago. Its diluted EPS was 816.10c, compared with 587.10c posted in the corresponding period of the previous year. The company stated that it is positive about top line trading prospects for the remainder of FY15.

Merafe Resources Limited: The company, in its FY14 results, indicated that revenue increased to R3.61bn from R3.50bn reported in the previous year. However, its diluted headline EPS dropped 23.1% to 8.30c, compared with the preceding year. The company stated that it would pay a R20.00mn dividend to shareholders and is optimistic about the firm’s future prospects.

British American Tobacco: The tobacco company, through its Brazilian controlled company British American TobaccoPrestação de Serviços Ltda., filed with the Brazilian securities regulator, the Comissão de ValoresMobiliários (CVM), a request to register a public tender offer to acquire up to all of the 24.7% of Souza Cruz shares which are not currently owned by the company and to delist the company.

Pioneer Foods Limited: The food and beverages company announced that it has agreed to invest as a majority shareholder in a new company, Food Concepts Pioneer Limited (FCPL), together with a partner, Food Concepts Plc. The new company will have operations in Nigeria.

Aquarius Platinum Limited: The platinum mining company announced that its subsidiary, Aquarius Platinum (South Africa) (Pty), has agreed to sell its entire interest in the Everest mine and related mining and processing infrastructure and immovable properties to Northam Platinum Limited for an aggregate consideration of R450.00mn, payable in cash.

Burger King banks on about 250 outlets: Burger King, the iconic fast-food outlet, could have between 200 and 250 stores open in SA within two years, according to local master franchise holder Grand Parade Investments.

UK and US

JD.Com Inc.: The online direct sales company, in its FY14 results, indicated that total net revenue was up 65.9% to RMB115.00bn from the previous year. Its non-GAAP net income per ADS was RMB0.30, compared with RMB0.26 recorded in the preceding year. The company expects net revenue for 1Q15 to be between RMB34.80bn and RMB35.80bn, representing a growth rate between 54.0% and 58.0% compared with 1Q14.

Autozone Inc.: The company, in its 2Q15 results, stated that sales increased 7.7% to $2.14bn from the same period preceding year. Its diluted EPS was $6.51, compared with $5.63 posted in the corresponding period prior year. Meanwhile, the company is going to contest against a $185.00mn punitive damages that it was ordered to pay a former store manager who suffered pregnancy and gender discrimination on the job.

Best Buy Co..: The consumer electronics company, in its FY15 results, revealed that its revenue decreased marginally to $40.34bn from $40.61bn recorded in the previous year. Its diluted EPS from continuing operations was $3.53, compared with $2.00 reported a year ago. In FY16, the company expects the financial impact of the investments and economic pressures in begin in 1Q16 and continue throughout the year. Meanwhile, the company authorised a $1.00bn share buyback over three years and announced a special dividend of about $180.00mn, or 51.00c/ share, from proceeds from settlements of a lawsuit on price-fixing of TFT-LCD panels.

Middleby Corporation: The manufacturing company, in its FY14 results, stated that net sales were up 14.5% to $1.64bn, compared with the preceding year. Its diluted net EPS stood at $3.40, compared with $2.74 posted a year ago.

Receptos Inc.: The biopharmaceutical company, in its FY14 results, revealed that its collaborative revenue advanced 27.1% to $5.90mn from the last year. It incurred a basic and diluted net loss of $4.63/share, compared with a loss of $4.23/share posted in the previous year. The company also indicated that it plans to move forward with a full Phase 3 programme in ulcerative colitis as well as a Phase 2 trial in Crohn’s disease.

Ascena Retail Group: The retailing company, in its 2Q15 results, indicated that its net sales were up 1.7% to $1.29bn from the same period a year ago. However, its net diluted EPS from continuing operations dropped to $0.05 from $0.19 reported in the corresponding period of the previous year. For FY15, the company reaffirmed guidance for adjusted diluted EPS from continuing operations in the range of $0.70 to $0.75.

Insys Therapeutics: The company, in its FY14 results, stated that net revenue climbed 123.7% to $222.13mn, compared with the previous year. However, its diluted EPS decreased to $1.04 from $1.41 posted in the preceding year. The company stated that it would be able to initiate pivotal Phase III clinical trials with three of its sublingual spray product candidates, and to initiate a Phase III clinical trial of its pharmaceutical cannabidiol candidate in Lennox-Gastaut and Dravet patients in FY15.

Ambarella Inc.: The semiconductor company, in its FY15 results, revealed that revenue was up 38.5% to $0.22bn, compared with the previous year. Its diluted EPS attributable to ordinary shareholders was $1.57, compared with $0.85 reported in the prior year.

Citigroup Inc.: The company announced that it has agreed to sell its 103-year-old subprime lender, OneMain Financial, to Springleaf Holdings for $4.25bn in cash.

Cyclacel Pharmaceuticals: The biopharmaceutical company announced that it intends to offer shares of common stock in a public offering. It further stated that H.C. Wainwright & Co., LLC would serve as the sole book runner for the offering.

Barclays Plc: The company, in its FY14 results, indicated that total income decreased 9.4% to GBP25.77bn from the preceding year. It incurred a diluted loss of 0.70p/share, compared with diluted EPS of 3.70p reported in the previous year. The company further stated that it has set aside another GBP750.00mn for foreign exchange fixing manipulation related settlement charges.

Glencore Plc: The company, in its preliminary FY14 results, stated that revenue decreased 5.0% to $221.07bn from the preceding year. However its diluted EPS was $0.18, compared with diluted loss of $0.73/share reported in the previous year. For FY15, the company expects its industrial capex to be in the range of $6.50bn to $6.80bn.

Ashtead Group: The company, in its 3Q15 results, revealed that total revenue was up 28.2% to GBP0.51bn from the prior year. Its diluted EPS stood at 13.90p, compared with 9.70p posted in the previous year. The company expects its FY15 results would be above its previous expectations.

Travis Perkins: The company, in its FY14 results, stated that revenue was up 8.4% to GBP5.58bn, compared with the last year. However, its diluted EPS decreased to 102.80p from 105.70p reported in the preceding year. The company proposed a final dividend of 25.75p, giving a full-year dividend of 38.00p,up 22.6% from the previous year.

Direct Line Insurance Group: The company, in its preliminary FY14 results, revealed that total income was down 5.0% to GBP3.35bn from the previous year. However, its diluted EPS from continuing operations rose to 23.80p from 20.70p reported a year ago. For FY15, the company expects to achieve a combined operating ratio in the range of 94.0% to 96.0% for ongoing operations after normalising for claims from major weather events.

Taylor Wimpey: The house building company, in its FY14 results, indicated that revenue from continuing operations advanced to GBP2.69bn from GBP2.30bn reported in the previous year. Its diluted EPS from continuing operations stood at 11.50p, compared with 7.30p posted in the prior year. The company stated that it would increase its planned full-year dividend to 1.56p/ share, at the top end of its payout policy range.

Royal Dutch Shell: The energy company announced that it intends to offer the option for shareholders to receive dividends in cash or in shares via a scrip dividend programme with effect from 1Q15 interim dividend onwards.

AstraZeneca Plc: The company announced that it has completed the transaction to acquire the rights to Actavis’ branded respiratory business in the US and Canada.

Financial Times

Downing Street behind challenge to Fridman’s North Sea deal: A decision to challenge Russian billionaire Mikhail Fridman over his purchase of a dozen North Sea gasfields was taken at the highest levels of the British government amid expectations that Moscow is likely to face tougher sanctions over the conflict in Ukraine.

BP Chief received 25.0% pay rise even as profits fell: Bob Dudley, Chief Executive of BP, received a 25.0% rise in total pay and bonuses last year, in spite of deteriorating shareholder returns and as a plunge in oil prices hit company profits.

Moneysupermarket shares tumble amid regulatory concerns: Moneysupermarket.com’s share price tumbled 9.0% on Tuesday as investors worried that the UK’s largest price comparison company may be forced to pay compensation to energy consumers.

Jenkins hails ‘significant progress’ at Barclays: Antony Jenkins says Barclays is in better shape than at any time since the financial crisis.

World’s biggest banks still EUR300.00bn short of safe assets, says regulator: The world’s biggest banks are still short of EUR300.00bn worth of safe assets to comply with new rules designed to reduce their vulnerability to panics, fresh data from the global banking supervisor have revealed.

UK retreat from investment banking gathers pace: Britain’s retreat from investment banking is set to accelerate as Royal Bank of Scotland aims to slash as many as 14,000 jobs in the sector and Barclays’ Chief Executive says he has limited patience with the business.

Partnership turns to majority shareholder for debt: Partnership, the annuity provider hard hit by George Osborne’s pensions reforms, has turned to its private equity backer for GBP100.00mn worth of debt after it failed to strike a deal with independent bond investors.

Tullett to use windfall for acquisitions: Tullett Prebon’s new Chief plans to use the near $130.00mn windfall the UK interdealer broker received from a legal settlement to invest in new ventures, rather than return it to shareholders.

Merck predicts flat earnings for FY15: Germany’s Merck predicted a “slight increase” in sales but little or no improvement in core earnings in FY15 as its best-selling drug, an injection for multiple sclerosis, faces competition from new oral treatments.

Rolls-Royce Chief’s pay halved after profit warnings: John Rishton has gone from the highest-paid Chief Executive in recent Rolls-Royce history to the lowest after a disastrous year in which the UK’s blue-chip engine-maker issued a string of profit warnings and calls to its ethics hotline surged.

Lockheed and Raytheon face off over European missile deals: Two of the world’s biggest defence companies are battling over bids to protect the skies of Germany and Poland, in high-stakes competitions seen as the gateway to a $100.00bn global market.

Carmaker slide blamed on icy weather: US carmaker shares slipped on Tuesday after results from the country’s largest manufacturers fell short of Wall Street expectations, blunted by icy winter weather that kept consumers out of dealer showrooms.

Former IMI Chief to take on rival Rotork’s Chairman role: Martin Lamb is set to take over as Chairman of British engineering group Rotork, as the group warned that the oil and gas sector will be more challenging this year.

Bentley and Aston Martin shift gears at Geneva Motor Show: Two of Britain’s best-known luxury brands have traded blows at the Geneva motor show, with Bentley launching an Aston Martin rival concept car – and Aston firing back with an all-electric crossover model.

Vox chases video payday: When Vox.com landed its first interview with Barack Obama in February, the digital news property did not debut the video on its own site.

Phone hacking was ‘rife’ at the Daily and Sunday Mirror, court told: Phone hacking was “rife” and conducted on a “mass industrial scale” by journalists at the three national newspapers owned by Trinity Mirror, it was claimed in the High Court on Tuesday at the start of a civil case brought by eight victims of voicemail interception.

Former Morrison head of tax jailed for insider trading: The former group treasurer and head of tax at WM Morrison, one of the UK’s four biggest supermarkets, has been sentenced to 12 months in jail after pleading guilty to insider dealing.

Punch Taverns appoints Chief Executive: Punch Taverns, the heavily indebted pub group, has turned to food retailer Duncan Garrood to revive its fortunes after more than a year of painful restructuring that has seen its estate shrink to 3,500 properties and its share price fall 73.0%.

Dubai to build $1.00bn financial zone development: Dubai’s sovereign wealth fund is to build a $1.00bn development in the heart of the emirate’s financial district, the first new construction project there since the real estate crash of FY08.

PCH buys embattled ecommerce retailer Fab.com: PCH, the supply-chain management company, has acquired former ecommerce darling Fab to create a new online store catering to new hardware and gadget start-ups.

Proposals on European net neutrality open ‘two-speed’ internet: European internet providers would be allowed to profit from “two-speed” data services under proposals being considered in Brussels, opening a transatlantic divide on telecoms regulation after the US banned similar tactics last week.

Cyber security loophole found at bank: Britain’s markets watchdog, the Financial Conduct Authority, was warned last July about a loophole in the cyber security of one of Britain’s biggest banks that could give hackers unfettered access to customer accounts.

BlackBerry launches touchscreen smartphone: BlackBerry has launched a touchscreen smartphone without its trademark Qwerty keyboard, the first of four new devices, as the company attempts to regain its relevance amid fierce competition.

Eurostar sale raises GBP757.00mn for Treasury: The Treasury has sold its 40.0% stake in the Eurostar cross-Channel train service for GBP585.00mn, almost twice the sum originally anticipated, in the last main privatisation before the election.

Panama Canal expects boost from US ports dispute: The disruption at US west coast ports over recent months could provide a substantial boost to traffic on the Panama Canal after its expansion is completed next year, the canal’s administrator said, in the latest sign that the dispute has done long-term damage to the ports.

Addison Lee takes on Uber for control of New York’s taxi market: Addison Lee is gearing up for a showdown with controversial Uber app for control of New York’s estimated GBP2.20bn taxi market as it looks to expand its fleet internationally and broaden its appeal to investors.

Travis Perkins: Lost 4.0% to GBP19.44 after results showed store refits weighing on profit at its largest division.

Pace: Gained 8.1% to 363.00p after raising FY15 guidance.

Citigroup: Getting ready for primetime: It is galling when a bad bank turns out not to be so bad after all. Citi Holdings, the non-core unit of Citigroup, delivered a pre-tax profit of $600.00mn last year, as nominally extraneous businesses appeared better under the flattering light of slim interest rates and shrinking charge-offs. Yet continuing to wind the division down is the right thing to do. Citi confirmed that plan on Tuesday, announcing the $4.30bn sale of OneMain, a subprime consumer lender, to Springleaf. Subprime lending is growing (at least during an economic expansion) but it is far too capital-intensive, in an era when big banks have to ration their consumption of that precious resource. The decision by former Chief Executive Vikram Pandit to jettison OneMain looked wise in FY09, when it was reeling from losses. With banks under regulatory pressure to simultaneously shrink while boosting capital, it still looks wise. Even better, current Chief Mike Corbat appears to have got a decent deal. A $4.30bn sale price is not too far adrift of market estimates of about $5.00bn. And offloading a $10.00bn portfolio, for cash, frees about $1bn of capital right off the bat, assuming a 10.0% risk-weighting. Under the various stress test scenarios being mulled by the US Federal Reserve, that capital figure could be higher.

Glencore: trading places: Such is the allure of Glencore, which both produces and trades commodities. The company said on Tuesday that net income fell 7.0% to $4.30bn last year. Try and find a miner that saw a decline that small. Glencore’s shares are, unsurprisingly, up a quarter from the mid-January low, outpacing pure play miners such as Rio Tinto and BHP. The outperformance is down to the trading division, of course. It increased its operating earnings by nearly a fifth, to $2.80bn. That is 42.0% of group earnings – similar to the proportion it contributed before the Xstrata acquisition in FY13. Glencore has pursued an asset intensive strategy since adding Xstrata. Revenues are growing at a slower pace than those industrial assets, weighing on returns, but, in comparison with the struggles of Singapore-listed commodity trader Noble Group, Glencore’s approach looks impressive. Noble has aimed to reduce its asset intensity, highlighting its capabilities in “supply chain management”. But this asset-light model does not seem to be working well. Noble’s return on assets, at 1.7%, is a third lower than Glencore’s. Still, Glencore needs to make its industrial strategy work. A good quarterly performance in one segment within trading is not proof of the integrated model. This will require sustained outperformance by the trading division relative to its asset-light competitors. At 15 times earnings, Glencore trades at a big premium to the miners. It still needs to show that its business mix merits that premium.