28th Sep 2018 11:17
LONDON (Alliance News) - The following is a summary of top news stories Friday.----------COMPANIES----------RSA Insurance Group reported its UK business suffered an underwriting loss for the third quarter of 2018. UK premiums are lower, RSA said, as it takes pricing and re-underwriting action, but international business, such as in Scandinavia and Canada, is more positive, it said. The UK made an underwriting loss of around GBP70 million during the third quarter, recording a 110% combined ratio. A ratio over 100% represents underwriting losses. The company blamed increased weather, large losses, and attritional claims for the disappointing UK performance, with its Marine portfolio the worst hit. "RSA's international businesses performed well in the third quarter, making strong progress against our best-in-class ambitions," said Chief Executive Stephen Hester, "However, our UK and 'London market' business reported an underwriting loss which is disappointing. Actions to improve in the UK are well underway and we are determined to restore satisfactory performance whilst continuing our progress internationally."----------easyJet expects to deliver a strong performance in final quarter of 2018 financial year and profit for the year will be the upper at end of the company's guidance, partly helped by one-off events such as the bankruptcies of rivals Monarch and Air Berlin and the flight cancellations suffered by Ryanair. easyJet expects headline pretax profit for the year to September-end to be between GBP570 million and GBP580 million and revenue, including Berlin Tegel airport, to be around GBP5.89 billion. Passenger numbers for the financial year, excluding Tegel, are expected to increase by 5.4% to 84.6 million, driven by an expected increase in capacity of 4.2% to 90.3 million seats. The capacity was kept lower than originally planned due to the flight disruptions. Load factor for the full year is expected to increase by 1.0 percentage points to 93.6%. For 2019, the airliner predicts capacity to grow by 10% to around 105 million seats. Revenue per seat for the first half of the new financial year at constant currency is estimated to fall by the low to mid-single digits due to the absence of one-off revenue benefits recorded in the previous period.----------
Striking staff have forced Ryanair Holdings to cancel around 250 flights on Friday, potentially affecting tens of thousands of passengers across Europe. A dispute over pay and conditions between the Irish budget airline and staff in six European countries will see them walk out for 24 hours. Ryanair had cancelled 150 flights due to an "unnecessary" strike in Spain, Belgium, the Netherlands, Portugal and Italy. On Thursday the airline said pilots in Germany would also be going on strike, with up to 100 flights shelved as a result.
---------United Utilities said trading in the first half of its financial year was in line with expectations but hot weather drove up costs. United Utilities said that in the six months to September its revenue was above the same period last year, reflecting regulatory revenue changes. The company incurred higher operating costs during the period, which the water and wastewater utility expects to record as an adjusted item. As such, underlying profit for the first half of its year is likely to exceed the previous year despite higher-than usual infrastructure renewals expenditure. Net group debt is expected to be slightly higher at September 30 than at March 31. However, underlying net finance expense is likely to be around GBP30 million below its previous half year. United Utilities said it expects to invest a further GBP80 million to safeguard its water supplies. This includes GBP40 million in operating costs and infrastructure and GBP40 million in capital expenditure.----------Serco said trading in the first few months of the second half will result in a better outcome for 2018, one which will be "meaningfully ahead" of current market expectations. The outsourcing company said a strong operating performance along with several non-recurring trading items, such as end-of-contract settlements, and other commercial negotiations will contribute to the better than expected outcome. Serco is predicting underlying trading profit of GBP90 to GBP95 million on revenue of about GBP2.8 billion. Serco's previous guidance for revenue was GBP2.7 billion to GBP2.8 billion with underlying trading profit expected to be about GBP80 million. The FTSE 250-listed company is also expecting its net debt to be towards the lower end of its range, GBP200 million to GBP250 million, from having previously expected it to be at the mid-to-upper end.----------Peer-to-peer lender Funding Circle confirmed it has priced its initial public offering at 440 pence per share. On Wednesday last week, Funding Circle set a price range for the IPO between 420p and 530p, so the final price is near the bottom of that range. The 440p price will see the company raise gross proceeds of GBP300 million from 68.2 million new shares. Current shareholders also will sell 32.0 million existing shares, which will raise GBP141 million for them. Funding Circle expects unconditional dealings to start on the London Stock Exchange on Wednesday next week, though conditional dealings began on Friday. The company will have a market capitalisation of around GBP1.50 billion, making it a candidate for the FTSE 250 index.----------MARKETS----------Stocks were mixed in London, with RSA Insurance the worst large-cap performer, down 9.6%. The pound was lower against the dollar after a report that the UK economy had its poorest half-year of growth for seven years. Wall Street was called for a lower open, having ended higher Thursday after positive economic data. ----------FTSE 100: 0.2% lower at 7,528.83FTSE 250: 0.1% lower at 20,347.72AIM ALL-SHARE: 0.4% higher at 1,100.59GBP: lower at USD1.3050 (USD1.3096)EUR: lower at USD1.1595 (USD1.1669)GOLD: higher at USD1,184.42 per ounce (USD1,183.00)OIL (Brent): lower at USD81.71 a barrel (USD81.77)(changes since previous London equities close)----------ECONOMICS AND GENERAL----------The UK economy has suffered its weakest six-month growth period since 2011, as the figure for the first quarter was revised lower. While the second reading for gross domestic product confirmed initial estimates of 0.4% growth in the second quarter from the quarter before, the Office for National Statistics said growth was weaker than originally thought in the first three months of the year. The ONS has revised quarter-on-quarter GDP growth down from 0.2% to 0.1% for the period from January to March this year - a period that saw the UK hit by extreme wintry weather brought in by the Beast from the East. The 0.4% quarter-on-quarter estimate for second quarter GDP was in line with economist estimates. The annual rise for the second quarter was revised down to 1.2% from 1.3%.----------UK consumer confidence weakened in September amid heightened uncertainty surrounding Brexit, survey data from GfK showed Friday. The consumer sentiment index dropped to -9 in September from -7 in August. The expected score was -8. Four sub-components of the index deteriorated in September and one stayed unchanged. The index measuring changes in past personal finances decreased three points to +1. Likewise, the forecast for personal finances over the coming 12 months dropped to +5 from +8 a month ago. The measure for the general economic situation during the last 12 months fell two points to -28, this was at the same level as September 2017, GfK said. Expectations for the general economic situation over the next 12 months edged down one point to -27. Meanwhile, the major purchase index stayed the same this month at +6.----------Boris Johnson has issued a blistering attack on Theresa May's Brexit strategy just days before the Conservative Party conference. The former foreign secretary, who sensationally quit the Cabinet in July, described the prime minister's Chequers plan as "a moral and intellectual humiliation for this country" that will "cheat the electorate" if implemented. Johnson, in a Telegraph op-ed, accused the government and civil service of a "pretty invertebrate performance" in negotiations and said there had been "a collapse of will by the British establishment to deliver on the mandate of the people". In a 4,500-word column, entitled "A better plan for Brexit", Johnson also set out an alternative vision which he says would make Britain "rich, strong and free". As a priority, the former London mayor urged the government to ditch Chequers and negotiate a Canada-style free deal which would "fulfil the instruction of the people".----------Eurozone inflation accelerated in September on food and energy prices, flash data from Eurostat showed. Inflation rose marginally to 2.1%, in line with expectations, from 2% a month ago. The European Central Bank targets "below, but close to 2%" inflation. Core inflation that excludes food, alcohol and tobacco, slowed unexpectedly to 0.9% from 1% in August. The core rate was expected to edge up to 1.1%. Food, alcohol and tobacco prices advanced 2.7% in September, following a 2.4% rise in August. Likewise, the increase in energy cost increased to 9.5% from 9.2%. Non-energy industrial goods prices logged a steady growth of 0.4%. Similarly, services cost gained 1.3%, the same rate as seen in August.----------Italy will run a higher-than-expected deficit next year, after its economy minister, Giovanni Tria, surrendered Thursday to demands to fund expensive tax and welfare programmes via extra borrowing. Deputy Premiers Luigi Di Maio and Matteo Salvini, who respectively lead the Five Star Movement and League parties, said a deal was struck "with all the government" to set the 2019 deficit at 2.4% of gross domestic product. "We are satisfied, this is a budget for change," they said in a joint statement. Tria, a technocrat with no formal political affiliation who was seen as a bulwark against reckless spending, wanted to limit the deficit to 1.6% of GDP, keeping Italy's huge public debt in check, as recommended by the EU. The country's public debt is equal to more than 130% of GDP, against a eurozone target of 60%. The decision to run a higher deficit is likely to result in a confrontation with EU authorities.----------
Related Shares:
RSA.L