30th Oct 2018 07:42
LONDON (Alliance News) - Stocks in London on Tuesday are seen building on Monday's strong gains following broadly positive trading in Asia overnight, as BP reported a sharp rise in third-quarter profit and Reckitt Benckniser backed its annual guidance.Among other company news on Tuesday, Ocado set out further details on its partnership with US supermarket Kroger, IG appointed a new chief executive, and the Restaurant Group swallowed up pan-Asian restaurant Wagamama.IG says futures indicate the FTSE 100 index of large-caps to open 7.48 points higher at 7033.8 on Tuesday. The FTSE 100 index closed up 1.3%, or 86.76 points at 7,026.32 on Monday.In early company news, BP said higher oil prices and a positive operating performance led to a doubling in the company's quarterly profit and its best underlying profit in over five years.The oil major said its replacement cost profit was USD3.09 billion in the three months to September 30, more than double the USD1.38 billion it posted the same period a year prior.Profit attributable to shareholders came in at USD3.35 billion for the second quarter, around double the USD1.77 billion in the third quarter of 2017 and 20% up quarter-on-quarter.On an underlying basis, BP's replacement cost profit was USD3.84 billion, from USD1.87 billion year-on-year and USD2.82 billion in the second quarter. This USD3.84 billion underlying replacement cost profit figure was its best result in over five years, BP said. BP's production was flat year-on-year at 2.5 million barrels of oil equivalent per day, but on an underlying basis was 6.8% higher. The underlying figure excludes BP's stake in Russian firm Rosneft and portfolio changes. Looking ahead, BP expects fourth-quarter production to rise on the third quarter, due to the acquisition of BHP Billiton's assets in the US. The USD10.5 billion acquisition, announced in July, is expected to complete on Wednesday.Reckitt Benckiser said it remains on track to meet its annual targets following like-for-like growth of 2% in the third quarter.Within divisions, Hygiene Home like-for-like sales grew 4% while Total Health's were flat. On a reported basis, total revenue fell 2% to GBP3.12 billion mainly due to a drag from Total Health, which saw sales down 3% while Hygiene Home was flat."Q3 was another quarter of progress, with continued momentum and growth under our new RB 2.0 organisational structure, " said Chief Executive Rakesh Kapoor.The Air Wick air freshener maker said growth in the quarter was dented by a temporary manufacturing disruption at its European IFCN plant which, while now resolved, is expected to result in some "residual impact" over the remainder of 2018 and into 2019."We have sufficient momentum and progress in our business to absorb this temporary manufacturing disruption. We therefore reiterate our 2018 target of 14-15% total net revenue growth at constant rates," said Kapoor.This net revenue target implies like-for-like growth at the upper end of a 2% to 3% range, the company said.Online grocer Ocado said it has signed service and operational terms with US supermarket Kroger following its May announcement of the partnership.Under the agreement, Kroger will order 20 customer fulfillment centres over the first three years of the agreement, with the first three of these centres ordered by the end of 2018. Ocado said it expects the earnings impact of the agreement to be neutral in its current financial year. Ocado will finance Kroger's customer fulfillment centres in a similar basis to previous deals, up to the point when the final funding structure has been finalised. This is not expected to involve more than the first three centres. The expected peak cumulative net outflow for Ocado of these initial three centres is GBP90 million. The grocer said it has more than sufficient funds to cover this with over GBP500 million of financing headroom.AstraZeneca said it has agreed to sell the prescription medicine rights to gastric ulcer treatment Nexium in Europe, as well as the global rights - bar the US and Japan - to inflammatory disease drug Vimovo, to German-based pharmaceutical firm Grunenthal.The medicines are outside of Astra's three main therapy areas of Oncology, Cardiovascular, Renal & Metabolism and Respiratory, the FTSE 100 constituent explained. For Nexium, Grunenthal will make an upfront payment of USD700 million upon completion, and Astra may also receive future milestones and sales-related payments of up to USD90 million. For Vimovo, Grunenthal will pay USD115 million upfront on closing and will also give Astra future milestones and sales-related payments of up to USD17 million.Spreadbetter IG Group Holdings said it has appointed Non-Executive Director June Felix as its new chief executive, effectively immediately.Felix has been a non-executive at IG since 2015, and has previously held roles at Verifone, Citibank and IBM Corp. "June has a strong track record in strategy and product innovation and has successfully developed businesses of varying scales in the USA, Asia and Europe. Her broad experience makes her ideally suited to take IG forward," said Chairman Andy Green.Restaurant Group said it has agreed to buy the owner of the Wagamama noodle restaurant business, Mabel Topco, for GBP357 million.In order to fund the cash purchase of the pan-Asian restaurant, Restaurant Group will undertake a GBP315 million rights issue."This transaction is an exciting and transformative opportunity to create a business which can pursue a truly multi-pronged growth strategy and create substantial value for our shareholders," said Restaurant Group Chief Executive Andy McCue."The transaction not only gives us a great brand but also creates a business with a multi-pronged growth strategy which will enhance earnings with continued selective UK rollout, accelerated via conversions of some TRG sites."The Restaurant Group also issued a trading update as part of Tuesday's announcement, and said sales in the 42 weeks of 2018 were down 0,.5% and like-for-like sales 2.0% lower. Like-for-like sales were up 1.4% in the 14 weeks following the end of the football World Cup.In the US on Monday, Wall Street ended lower, with the Dow Jones Industrial Average shedding 1.0%, the S&P 500 down 0.7% and Nasdaq Composite off 1.6%.In Asia on Tuesday, the Japanese Nikkei 225 index closed up 1.5%. In China, the Shanghai Composite ended up 1.0%, while the Hang Seng index in Hong Kong is down 0.5%.In Japanese economic data, the unemployment rate declined in September, the Ministry of Internal Affairs and Communications reported. The jobless rate fell to 2.3% from 2.4% in August. This was the lowest rate since early 1990s. The rate was expected to remain unchanged at 2.4%.The unemployment rate is the lowest it has been in a generation and it will fall further over the coming year, Marcel Thieliant, an economist at Capital Economics, noted. The upshot is that wage growth probably won't reach the 2.5% annual rate required to meet the BoJ's 2% inflation target, the economist added.To come in the economic events calendar on Tuesday are German unemployment figures at 0855 GMT, eurozone third quarter GDP at 1000 GMT, and German inflation readings at 1300 GMT.The pound remained sub-USD1.28 early Tuesday, quoted at USD1.2779 compared to USD1.2793 late Monday which, in turn, was down from USD1.2827 late Friday, as the latest UK budget failed to enthuse currency traders.UK Chancellor Philip Hammond on Monday pledged a GBP20.5 billion post-inflation increase for the National Health Service over the next five years as well as unveiling early increases in tax-free personal allowances.In all, the measures announced in Hammond's third Budget amounted to a GBP100 billion loosening of the purse-strings over a six-year period."This budget being dependent on a Brexit deal is what prevented investors from getting giddy at the prospect of more spending and the pound rallying. With no Brexit deal done and talks in deadlock, doubts exist as to whether the largest giveaway in 8 years will ever actually materialise," said Jasper Lawler, head of research at London Capital Group.The Office for Budget Responsibility warned about this on Monday. A disorderly Brexit "could have severe short-term implications for the economy, the exchange rate, asset prices and the public finances", cautioned the government's independent forecaster.Related Shares:
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