14th Nov 2019 08:06
(Alliance News) - Fashion house Burberry said Thursday it was pleased with its performance in the first half, despite escalating conflict in one of its key markets.
Pro-democracy protesters challenging China's rule of Hong Kong on Thursday choked the city for a fourth straight working day, firing arrows at police, barricading roads and disrupting transport links, as schools and businesses closed.
The territory has entered its sixth month of protests, which have morphed from mass rallies into a "blossom everywhere" campaign of debilitating disruption by groups of black-clad mainly student demonstrators.
Key arterial roads were clogged by brick and bamboo barricades, a major cross-harbour tunnel was closed while metro stations and bus services were shut down, as travel chaos gripped the city of 7.5 million people
In London, Burberry said revenue rose 5% in the six months to September 28 at GBP1.28 billion, with comparable store sales rising 4% - made up of first quarter comparable sales growing 4% and this rate accelerating to 5% in the second quarter. Pretax profit grew to GBP192.6 million from GBP174.1 million.
Asia Pacific revenue increased by a mid-single digit percentage, with mainland China up mid-teens, South Korea up high-single digits and Japan up mid-single digits. Hong Kong, however, declined by double-digits.
Europe, Middle East, India and Africa grew by a mid-single digit percentage and the Americas by low-single digits, Burberry said.
The company maintained its guidance for "broadly stable top-line and adjusted operating margin", despite pressure on margins from disruptions in Hong Kong.
Burberry now expects its gross margin to be down around 150 basis points, previously a 100 basis point decline, reflecting mix and "the disruptions in higher margin market Hong Kong".
The stock was up 6.9% in early dealings Thursday, the top blue-chip performer.
Here is what you need to know at the London market open:
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MARKETS
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FTSE 100: down 0.1% at 7,340.72
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Hang Seng: down 1.0% at 26,319.48
Nikkei 225: closed down 0.8% at 23,141.55
DJIA: closed up 92.10 points, 0.3%, at 27,783.59
S&P 500: closed up 0.1% at 3,094.04
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GBP: flat at USD1.2836 (USD1.2840)
EUR: flat at USD1.1006 (USD1.1010)
Gold: up at USD1,466.59 per ounce (USD1,464.30)
Oil (Brent): firm at USD62.78 a barrel (USD62.40)
(changes since previous London equities close)
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ECONOMICS AND GENERAL
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Thursday's Key Economic Events still to come
0930 GMT UK monthly retail sales figures
1100 CET EU flash estimate gross domestic product
1100 CET EU flash estimate employment EU and euro area
0830 EST US producer price index
0830 EST US initial jobless claims
0945 EST US Bloomberg consumer comfort index
1000 EST US Fed Chair Powell testifies to House committee
1030 EST US EIA weekly natural gas storage report
1100 EST US EIA weekly petroleum status report
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The Conservatives are in the lead with 40% while Labour are on 30% ahead of next month's UK general election, according to a new poll. The findings mark the largest Conservative lead in a Savanta ComRes survey since the 2017 ballot, the pollster said. The voting intention poll, which involved 2,022 adults on November 11 and 12, put the Lib Dems on 16% and the Brexit Party on 7%.
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Germany managed to stave off a recession in the third quarter as gross domestic product edged up, figures from Destatis showed. GDP in the three months to September 30 grew 0.1% sequentially. This followed a revised 0.2% contraction the previous quarter. If Germany's economy had shrunk again in the third quarter, the country would have entered a technical recession.
FXStreet consensus had seen a 0.1% quarter-on-quarter fall in GDP in the third quarter. Year-on-year, GDP grew 1.0%, again beating forecasts for a 0.9% advance.
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Chinese industrial production growth slowed by more than expected to 4.7% in October on the year prior. Data from the Chinese National Bureau of Statistics on Thursday showed industrial output expansion decelerated from the 5.8% annual growth recorded in September. The October print also disappointed the 5.4% October growth forecast by economists, according to the consensus cited by FX Street.
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Japan's economy grew between July and September for the fourth quarter in a row, according to figures released by the country's government. Gross domestic product climbed by 0.1% compared to the previous quarter, with an annual increase of 0.2% projected. Consumer spending, which makes up around 60% of the country's economic output, increased in the last minute before prices were due to rise when a tax hike came into force on October 1. Despite the increase, many economists had predicted stronger economic growth. The pace of growth also slowed. In the previous quarter the GDP had increased by an annual equivalent of 1.8%.
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Two top US diplomats delivered gripping testimony Wednesday about Donald Trump's efforts to get Ukraine to investigate his potential 2020 rival Joe Biden, as the impeachment inquiry into the US president shifted into a new phase of high-stakes televised hearings. Trump dismissed the probe in the Democratic-led House of Representatives as a "witch hunt" and said he was "too busy" to watch the first public hearings, during which he received staunch backing from Republican lawmakers. William Taylor, the top US diplomat in Ukraine, began his testimony before the House Intelligence Committee with a new revelation about Trump's efforts to pressure Kiev – the main issue of just the fourth impeachment process in US history. Taylor testified that he was told Trump cared more about the probe into Biden than he did about Ukraine.
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BROKER RATING CHANGES
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GOLDMAN CUTS FRESNILLO TO 'SELL' ('NEUTRAL') - TARGET 580 (670) PENCE
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JEFFERIES CUTS TULLOW OIL TO 'HOLD' ('BUY') - TARGET 168 (275) PENCE
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JPMORGAN CUTS TULLOW OIL TO 'NEUTRAL' ('OVERWEIGHT') - TARGET 249 (278) PENCE
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EXANE BNP CUTS RYANAIR TO 'UNDERPERFORM' (NEUTRAL) - PRICE TARGET 12 EUR
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COMPANIES - FTSE 100
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National Grid said it delivered a "solid" performance in the first half, despite revenue and profit both falling. Revenue was GBP6.29 billion in the six months to September 30, down 0.9% from GBP6.35 billion a year ago. Pretax profit fell 23% to GBP404 million from GBP522 million. "For 2019-20, we continue to expect to deliver good financial performance in our US business following the agreement of a number of regulatory filings. As expected, the UK business remains on track to deliver continued outperformance," said National Grid.
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BHP Group has named Mike Henry, the president of its Australia unit, as its chief executive, effective January 1. Henry replaces incumbent Andrew Mackenzie who will step down as a member of the firm's executive team on December 31, before retiring on June 30, 2020. Henry was appointed president of Operations Minerals Australia, which looks after the company's iron ore, copper, coal and nickel assets in the country, back in 2016. He has been a member of BHP's executive leadership team since 2011.
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COMPANIES - FTSE 250
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UK retailer Card Factory reported a fall in like-for-like sales in the third quarter, though said sales in the first nine months of the financial year have been robust. Card Factory said like-for-like sales in the third quarter fell 0.3%, while sales were up 0.9% in the nine months to October 31. Total sales in the nine months grew 5.0%, a pace the company described as "robust". Card Factory stores saw an increase in average spend, following targeted improvements to its range of card and non-card products, but like-for-like sales were hit by weaker footfall in the quarter and declined 0.4%.
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Transport operator FirstGroup reported a wider interim loss on an impairment charge. Revenue for the first half grew to GBP3.53 billion from GBP3.30 billion a year ago, but its loss widened to GBP187.1 million from GBP4.6 million, largely due to a GBP124.4 million impairment of its Greyhound operations. "We have taken a number of important steps since our announcement in May including the sale process for Greyhound, future UK Bus pension scheme funding and the strengthening of our Rail portfolio. We are intent on realising value for shareholders and will actively manage our entire portfolio by all appropriate means. We look forward to reporting on further progress in the second half," said Chief Executive Matthew Gregory.
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Defence firm QinetiQ reported growth in revenue and profit for the first half of its financial year. QinetiQ posted revenue of GBP486.5 million for the six months to September 30, up from GBP420.3 million a year ago. Pretax profit rose to GBP71.3 million from GBP52.7 million. QinetiQ said it saw a 38% increase in orders, up 30% on an organic basis, driven by growth across the group.
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COMPANIES - INTERNATIONAL
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Disney+ said it hit more than 10 million sign-ups on its first day of launch, far exceeding expectations. Walt Disney's mix of Marvel and Star Wars movies and shows, classic animated films and new series appears to be an immediate hit out after its launch. Disney has invested billions in its streaming service, which costs USD7 a month or USD70 a year after a seven-day free trial. Customers of some phone and home-internet plans were offered a year free.
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US technology firm Cisco Systems said first quarter profit fell on the year prior as costs rose, despite revenue edging higher. For the three months ended October 26, pretax profit narrowed 5.6% to USD3.69 billion from USD3.91 billion the year prior. Earnings per share fell 12% to USD0.69 from USD0.78 the year before. This was despite revenue rising 0.7% to USD13.16 billion from USD13.07 billion the year prior.
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Mizuho Financial Group held its interim dividend despite profit falling on higher costs and lower income, though the firm remained upbeat for its full-year profit performance. For the six months ended September, pretax profit narrowed 17% to JPY391.47 billion - about USD3.60 billion - from JPY473.91 billion the year prior. Shareholder attributable profit fell 20% to JPY287.67 billion from JPY359.36 billion the year before. This was after ordinary income fell 0.4% to JPY1.987 trillion from JPY1.994 trillion the year prior. Tokyo-based Mizuho Financial proposed a JPY3.75 per share interim dividend, unchanged on the year prior.
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Thursday's Shareholder Meetings
Aeorema Communications
Eagle Eye
Picton Property Income
Byotrol
DFS Furniture
Genus
Ricardo
Jupiter European Opportunities Trust
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By Tom Waite; [email protected]
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