22nd Oct 2019 08:01
(Alliance News) - Whitbread on Tuesday said it delivered a resilient first-half profit performance, despite challenging market conditions in the UK for the Premier Inn chain operator.
For the six months to August 29, revenue was flat at GBP1.08 billion, while pretax profit was down 7% at GBP219.9 million from GBP236.8 million last year. The figures excluded contributions from the Costa coffee chain in the comparison period, as this has since been sold to the Coca-Cola Co.
Whitbread kept its interim dividend flat at 32.7 pence per share.
At Premier Inn in the UK, total accommodation sales declined by 0.6%, driven by weak regional market conditions.
Whitbread Chief Executive Alison Brittain said: "Market conditions in the UK continue to be challenging with business confidence remaining weak and leisure confidence in decline, coinciding with heightened political and economic uncertainty, which has continued into the third quarter of financial 2020. This has impacted hotel domestic demand, particularly in the regional market, where 80% of Premier Inn hotels are located. There has also been a greater decline in short-lead discretionary bookings, which tend to be at higher price points.
"With this uncertainty, it is difficult to predict how business confidence and business investment will evolve in the second half of FY20 and into FY21 and impact demand for short-stay, domestic travel...Trading conditions in the UK hotel market will continue to be monitored closely."
Whitbread shares were down 1.3% in early trade Tuesday.
Here is what you need to know at the London market open:
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MARKETS
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FTSE 100: up 0.1% at 7,173.39
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Hang Seng: up 0.2% at 26,781.63
Nikkei 225: Tokyo market closed for holiday.
DJIA: closed up 57.44 points, 0.2%, at 26,827.64
S&P 500: closed up 0.7% at 3,006.72
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GBP: flat at USD1.2975 (USD1.2982)
EUR: firm at USD1.1154 (USD1.1142)
Gold: firm at USD1,484.75 per ounce (USD1,484.13)
Oil (Brent): flat at USD58.88 a barrel (USD58.68)
(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
Japan Enthronement Ceremony Day. Financial markets closed.
0930 BST UK public sector finances
1100 BST UK CBI industrial trends survey
1100 BST Ireland wholesale price index
0855 EDT US Johnson Redbook retail sales index
1000 EDT US existing home sales
1000 EDT US Richmond Fed business activity survey
1630 EDT US API weekly statistical bulletin
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UK Prime Minister Boris Johnson is urging MPs to back his Brexit deal as he launches a final bid to force through legislation in time for the UK to leave the EU with an agreement on October 31. Ministers have insisted they are confident they have the numbers to get the Withdrawal Agreement Bill through the Commons, despite their defeat in Saturday's special sitting. However they face a fierce parliamentary struggle after announcing plans to fast-track it through the lower House in three days, potentially paving the way for the Lords to consider it over the weekend. They will need MPs to approve a "programme motion" setting out the timetable for its passage through the Commons, setting up a crunch vote on Tuesday evening.
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The European Parliament will not vote to ratify the new Brexit withdrawal deal until the British legislative chamber has done so, officials said. This would mean it is unlikely that MEPs will back the deal this week while the European Parliament sits in Strasbourg, and they will need to hold a special session later in Brussels. If a vote is needed before October 31, currently scheduled to be Brexit day, this would mean meeting next week. But members insisted a session could be arranged quickly in any case.
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US President Donald Trump said progress in developing the text of a partial trade pact with China means he will likely be able to sign it next month. Trump remains upbeat on the chances Beijing and Washington will seal the mini-deal he announced earlier this month – marking a cooling-off period in the two nations' damaging trade war. "We'll be able to, we think, sign a completed document with China on phase one," Trump said at the White House. US Trade Representative Robert Lighthizer said efforts to commit the agreement to paper before the Asia-Pacific Economic Cooperation summit in Chile next month are "on track" though some work remains to be done. "Our target is to have the phase one deal by the time you go to Chile," Lighthizer told Trump.
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BROKER RATING CHANGES
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CITIGROUP CUTS LLOYDS BANKING TO 'NEUTRAL' (BUY)
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HSBC RAISES SSE TO 'BUY' ('HOLD') - TARGET 1480 (1270) PENCE
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MORGAN STANLEY CUTS TUI TO 'EQUAL-WEIGHT' ('OVERWEIGHT') - TARGET 1050 (1150) PENCE
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COMPANIES - FTSE 100
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Drought in Chile has hampered Anglo American's copper production, the bluechip miner said Tuesday, and problems could continue into next year. Anglo produced 159,000 tonnes of copper in the three months to September, 8% lower than a year before. The year-to-date figure is down 1%. The company said this was due to "unprecedented" drought conditions affecting the Los Bronces mine in central Chile. Anglo American said the drought is the longest-ever recorded in the region. For 2019, Anglo has narrowed copper production guidance to 630,000 tonnes to 650,000 tonnes, lowering the top end of the range, having previously had a range of 630,000 tonnes to 660,0000 tonnes. On top of this, the miner has warned the drought in Chile "remains a risk for 2020 production".
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Reckitt Benckiser said third quarter total sales were up 5.3% to GBP3.29 billion, while like-for-like sales during the period rose 1.6%. Reckitt said its annual net revenue growth target has been reduced to a range between 0% to 2%, down from its previous target of 2% to 3%. Reckit said this was "reflecting the reduction in retailer inventory levels of seasonal products in the third quarter and the inherent uncertainties of the season and associated stocking". The Nurofen painkiller maker expects a modest decline in annual adjusted operating margins. CEO Laxman Narasimhan said: "RB's performance in Q3 was disappointing. We delivered another quarter of consistent growth in Hygiene Home. Our Health business, despite good market growth and stable consumer offtake, delivered a weak net revenue performance. This was primarily due to issues in the US and China. In the US, we saw more cautious retailer seasonal purchasing patterns. In China, Infant Formula & Child Nutrition continues to face challenging market conditions.
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Distribution firm Bunzl said expectations for 2019 remain unchanged, with overall trading consistent with the slowing underlying revenue growth it had guided earlier. The company attributed this to mixed macroeconomic and market conditions across the countries and sectors in which it operates. Bunzl reported third quarter revenue growth of 4% at actual foreign exchange rates and 0.5% at constant currency. Bunzl said growth through acquisitions remains an important part of its ongoing strategy, with total committed spend on acquisitions so far this year of GBP100 million. The acquisition pipeline remains active and a number of ongoing discussions are taking place, it added.
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COMPANIES - INTERNATIONAL
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UBS Group reported a double-digit fall in profit in the third quarter of 2019 due to subdued investor confidence and economic outlook. The Swiss bank said pretax profit for the three months to the end of September was USD1.35 billion, down 21% year-on-year, and adjusted pretax profit decreased by 18% to USD1.46 billion. The company's adjusted cost to income ratio was 79.1%. CET1 capital ratio stood at 13.1% and reported return on CET1 capital was 12.1%. On a divisional basis, UBS said Global Wealth Management's invested assets reached a new high of
USD2.502 trillion, while net new business volume growth in the Personal & Corporate Banking division was strong, at 3.0%.
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Three leading American drug distributors and an Israeli drugmaker blamed for a deadly US opioid epidemic settled a bellwether civil lawsuit with two Ohio counties, opening the door for a broader national settlement worth billions of dollars. The USD260 million deal with Ohio's Summit and Cuyahoga counties set the basis for a resolution of lawsuits by some 2,700 addiction-ravaged communities nationwide that had joined the Cleveland case, the first in a federal court to address the causes of a crisis that has wrecked the lives of millions. Late Monday officials from four states driving talks for a global resolution for all those communities announced that they had a tentative deal.
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Japan-based SoftBank Group is ready to buy a controlling stake in WeWork, providing the shared office space startup desperately needed funding at a slashed valuation, a source told AFP. Softbank is ready to invest an additional USD4 billion to USD5 billion in WeWork, taking a majority stake in the New York company while valuing it at USD8 billion overall, the source said, asking not to be identified. WeWork – which declined to comment on the issue – had been valued at more than USD47 billion earlier this year. The SoftBank proposal includes offering to buy more than a billion dollars in shares of WeWork from existing investors and employees, among them co-founder Adam Neumann.
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Tuesday's Shareholder Meetings
ITM Power
McBride
Charles Taylor (re acquisition by LMP Bidco)
Wednesday 23 October
Stanley Gibbons
Standard Life UK Smaller Companies
Hayes Publishing
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By Tom Waite; [email protected]
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