6th Sep 2019 11:32
(Alliance News) - The following is a summary of top news stories Friday.
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COMPANIES
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Berkeley Group said market conditions in London and the south east of England were consistent with its June update and prices were stable, although transaction costs and uncertainty are a challenge. Berkeley said its forward sales position is still more than GBP1.8 billion. Berkeley did not provide specific short-term targets but said it plans to generate a GBP3.3 billion pretax profit for the six years to April 2025, with profit in any single year being between GBP500 million and GBP700 million, subject to "the timing of delivery". Berkeley expects its net cash at its half-year mark on October 31 will be similar to where it was at the end of April, when it stood at GBP975 million. This will depend on "the volume of any share buy-backs and investment in new land in the intervening period". Berkeley said the wider market is still "constrained by high transaction costs and the uncertainty in the macro political and economic environment", although there is underlying demand for "new homes built to a high quality that are well located and properly priced to meet the local housing need, supported by good availability of mortgages".
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Ashmore Group reported a "strong" financial 2019 as the emerging markets investment manager ended the period with sharp growth in assets under management, despite escalation of the US-China trade war. At June 30, Ashmore's assets under management stood at USD91.8 billion, up 24% from USD73.9 billion at the same point a year ago. Ashmore delivered USD10.7 billion of net inflows in the period while its investment performance added USD6.9 billion. Ashmore's pretax profit increased 15% year on year to GBP219.9 million. The company's management fees increased 17% to GBP294.3 million, resulting in a 13% increase in revenue to GBP314.3 million. The asset manager's total dividend for the year was flat at 16.65 pence each. Looking ahead, Ashmore believes the greatest threat to the current market environment is US trade and economic policy.
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Greene King reported a fall in like-for-like sales after the tough comparable provided by a strong 2018. For the 18 weeks to September 1, Greene King's like-for-like sales fell 1.8%, due to 2018 benefiting from the football World Cup and a hot summer in the UK. On a two-year basis, like-for-like sales increased by 1.0%. Over the seven weeks to September 1, stripping out the football World Cup period, like-for-like sales in the Pub Company grew 1.5%, and by 2.4% on a two-year basis. For the first 16 weeks, Pub Partners like-for-like net income fell 4.2%, due to softer beer sales, again against a strong year-on-year comparative. In Brewing & Brands, beer volumes fell 6.5% for the 18-week period, and own-brewed volumes dipped 7.9%.
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SIG reported a sharp drop in first half profit, but a rise on adjusted basis, and said that there has been a marked deterioration in construction activity in the UK. The building materials company said, however, that its ongoing business transformation and the normal seasonality pattern will lead to a stronger second half, despite increasing political and macro-economic uncertainty. SIG, which supplies insulation and interiors products, posted pretax profit of GBP5.2 million for the six months to June 30, down 73% from GBP19.6 million profit a year ago. First half reported revenue was down 7.9% to GBP1.27 billion from GBP1.38 billion. Revenue, excluding divested businesses, fell 5.1% to GBP1.26 billion from GBP1.34 billion. SIG has declared an unchanged interim dividend of 1.25p per share.
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MARKETS
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London shares were mixed with utility stocks weighing on the FTSE 100. In the FTSE 250, SIG was the worst performer, down 5.3%. The pound was back down against the dollar as the UK Parliament works to avert a no-deal Brexit. Wall Street was pointed to a higher open ahead of the US jobs report for August at 1330 BST.
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FTSE 100: down 0.1% at 7,265.40
FTSE 250: flat at 19,656.50
AIM ALL-SHARE: up 0.1% at 881.20
GBP: down at USD1.2296 (USD1.2323)
EUR: down at USD1.1031 (USD1.1046)
GOLD: down at USD1,503.20 per ounce (USD1,515.10)
OIL (Brent): down at USD61.02 a barrel (USD62.02)
(changes since previous London equities close)
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ECONOMICS AND GENERAL
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A legal challenge brought over UK Prime Minister Boris Johnson's decision to suspend Parliament for five weeks has been rejected by leading judges. They announced their decision on Friday at the High Court in London. Lord Chief Justice Lord Burnett, Master of the Rolls Terence Etherton and President of the Queen's Bench Division Dame Victoria Sharp dismissed a claim brought against Johnson by businesswoman Gina Miller. Rejecting Miller's case, Lord Justice Burnett said: "We have concluded that, whilst we should grant permission to apply for judicial review, the claim must be dismissed." Their ruling comes in the same week the prime minister fought off a similar legal attack in Scotland.
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Johnson's hopes of securing an election on his own terms appear to be fading as opposition parties continued to resist a vote before the prospect of a no-deal Brexit on October 31 is eliminated. The PM is back on the campaign trail for the election he is yet to successfully call after a torrid day in which his brother resigned from government while describing being torn between family and "the national interest". Johnson's visit to Scotland came as Labour's Jeremy Corbyn and other Westminster opposition leaders were holding talks about their approach to the timing of an election. Labour, the SNP and Liberal Democrats could refuse to back the PM's second attempt to get an early election on Monday, because of concerns the poll should be delayed until a Brexit deadline extension has been secured. Johnson has said he wants polling day to be October 15, but in order to call the snap election he needs a two-thirds majority in the Commons and opposition parties do not trust him to stick to that date.
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Soaring temperatures and Brexit uncertainty led to a dire month for the UK high street in August, figures show. Store sales fell 0.1% off an already poor base of minus 2.7% a year earlier, according to the BDO High Street Sales Tracker. The final week of the month resulted in a calamitous fall in sales as record-setting temperatures kept customers away. The last week of August saw total in-store like-for-like sales plummet by minus 5.10% from an already negative base of minus 1.10% for the equivalent week last year. The result marks six months of negative like-for-like in-store sales this calendar year, as shoppers tighten their belts in the face of mounting Brexit uncertainty.
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The eurozone's growth halved in the second quarter of this year, the EU statistics agency Eurostat said. The economy rose by 0.2% in both the euro area and the EU28 during the second quarter of 2019. The reading was in line with the consensus estimate provided by FXStreet. In the first quarter of 2019, the eurozone economy had grown by 0.4%, while the wider EU28 had risen 0.5%. Compared with the same quarter in 2018, euro area GDP rose 1.2%. The reading beat FXStreet's consensus estimate of 1.1%.
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German industrial production slumped again in July, data from Destatis showed, though the rate of decline slowed slightly. Industrial production in July fell 4.2% on a year before and slipped 0.6% on the previous month. This compares to June's 4.7% year-on-year fall and 1.2% monthly fall. The June figures were revised, positively, from 5.2% and 1.5% falls respectively previously reported.
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Related Shares:
Berkeley Group