17th Dec 2019 07:53
(Alliance News) - Unilever on Tuesday said it expects underlying sales growth for 2019 to be slightly below its guidance of the lower half of its 3% to 5% range.
The Dove soap maker attributed the guidance cut to challenges in some markets, including an economic slowdown in one of its largest markets, South Asia, and continued difficult trading conditions in West Africa.
Further, Unilever said trading conditions in developed markets continue to be challenging, and while there are "early signs of improving performance" in North America, a full recovery there will "take time".
Unilever added that earnings, margin and cash are not expected to be hurt.
"Due to challenges in certain markets, we expect a slight miss to our full-year underlying sales growth delivery. Looking ahead to 2020, growth will be second-half weighted. While we expect improvement in the first half of 2020 versus this quarter, we expect that first-half growth will be below 3%. Our full-year underlying sales growth is expected to be in the lower half of the multi-year range," Chief Executive Officer Alan Jope said.
Here is what you need to know at the London market open:
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MARKETS
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FTSE 100: called up 0.2% at 7,536.10
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Hang Seng: up 1.1% at 27,802.75
Nikkei 225: closed up 0.5% at 24,066.12
DJIA: closed up 100.51 points, 0.4%, at 28,235.89
S&P 500: closed up 0.7% at 3,191.45
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GBP: down at USD1.3264 (USD1.3329)
EUR: flat at USD1.1142 (USD1.1139)
Gold: up at USD1,476.40 per ounce (USD1,473.50)
Oil (Brent): flat at USD65.42 a barrel (USD65.46)
(changes since previous London equities close)
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ECONOMICS AND GENERAL
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Tuesday's Key Economic Events still to come
0930 GMT UK labour market statistics
0930 GMT UK Finance mortgage lending trends statistics
1100 GMT UK CBI industrial trends survey
1100 CET EU foreign trade
0830 EST US new residential construction
0855 EST US Johnson Redbook retail sales index
0915 EST US industrial production & capacity utilization
1630 EST US API weekly statistical bulletin
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UK Prime Minister Boris Johnson is to legislate to prevent members of Parliament extending the Brexit transition period beyond the end of 2020, government sources said. Ministers are understood to have re-worked the Withdrawal Agreement Bill – due to come before the Commons this week – to "legally prohibit" any further extension. The move comes as MPs gather at Westminster for the first sitting of the new Parliament on Tuesday following last week's General Election. The Tories return in buoyant mood after Johnson was swept to an unexpected 80-seat majority as a swathe of Labour strongholds fell to the Tories. Under current plans, the government intends to end Britain's EU membership on January 31, with an implementation to run to the end of 2020 while it negotiates a free trade agreement with Brussels.
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The Bank of England said its 2019 stress test shows that the UK banking system is resilient, even to a disorderly Brexit, with all seven major banks tested passing. The BoE said its stress test showed that banks should be able to withstand "deep" simultaneous recessions in the UK and global economies that are more severe overall than the global financial crisis in 2008, combined with large falls in asset prices and a separate stress of misconduct costs. They would therefore be able to continue to meet credit demand from UK households and businesses even in the unlikely event of these "highly adverse" conditions. In the 2019 stress-test scenario, world gross domestic product falls by 2.6%, UK GDP falls by 4.7%, UK interest rates increase to 4% and the UK unemployment rate shoots up to 9.2%. UK interest rates currently lie at 0.75%, and the UK unemployment rate for September was 3.8%.
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BROKER RATING CHANGES
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CITIGROUP CUTS RBS TO 'NEUTRAL' ('BUY') - TARGET 250 (240) PENCE
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JPMORGAN RAISES EVRAZ TO 'NEUTRAL' ('UNDERWEIGHT') - TARGET 400 (375) PENCE
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BERENBERG CUTS SCHRODERS TO 'HOLD' ('BUY') - TARGET 3510 PENCE
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COMPANIES - FTSE 100
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Bunzl said annual trading expectations remain unchanged, consistent with slowing underlying revenue growth it flagged previously, due to mixed macroeconomic and market conditions in geographies where it operates. Bunzl said revenue for 2019 is expected to have increased by between 2% and 3% at actual exchange rates. At constant exchange rates, revenue is expected to have risen by around 1% and underlying revenue flat from 2018. In addition, Bunzl said it has bought Perth Australia-based emergency response supplies firm fire Rescue Safety Australia. It didn't disclose the purchase price.
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Testings and inspection firm Intertek said it has entered the travel and tourism sector by acquiring security risk management business Check Safety First for an undisclosed sum. Intertek expects Check Safety First to generate around GBP10 million of revenue in 2019.
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COMPANIES - FTSE 250
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Hunting said it expects 2019 earnings before interest tax depreciation and amortisation remaining in the range of current market expectations. However, Hunting said this remains dependent on results for the month of December. Hunting said it continues to trade profitably and generate cash and given the "strong capital discipline implemented throughout the year".
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COMPANIES - INTERNATIONAL
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Australia & New Zealand Banking Group warned of a gloomy outlook "for all banks" going ahead. Speaking at the lender's annual general meeting, which was held in Brisbane, Chair David Gonski noted the company had faced numerous challenges during 2019. This included "intense" competition, lower interest rates, slower credit growth, as well as the impact of regulatory investigations into poor practice by the banking sector in Australia and tighter capital requirements in New Zealand. "While the board is pleased with the progress we have made, we do expect challenging trading conditions for all banks to continue well into the foreseeable future," said Gonski. "Competition will remain intense. Regulation continues to rise and we, of course, need to continue to work even faster fixing the failures of the past."
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Tuesday's Shareholder Meetings
Glenveagh Properties (re capital reorganisation)
Sareum Holdings
Scottish Oriental Smaller Companies
Schroder Income Growth Fund
Dotdigital
Tristel
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By Tom Waite; [email protected]
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