27th Sep 2016 10:23
LONDON (Alliance News) - The following is a summary of top news stories Tuesday.
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COMPANIES
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Wolseley hiked its dividend by 10% after reporting increases in both profit and revenue during its recently completed financial year, though it noted there will be job cuts in its UK division. The building products company reported pretax profit of GBP727.0 million for the year ended June 30, up from GBP508.0 million a year earlier, and driven by a 9.0% rise in revenue to GBP14.43 billion from GBP13.30 billion. The strong revenue growth came largely within Wolseley's US division, where it noted there were good US residential and commercial markets, though industrial remained weak. Meanwhile, Wolseley announced a turnaround and re-positioning strategy in its UK division, with 80 branches and one distribution centre to be closed, resulting in up to 800 job losses. The company declared a full-year dividend of 100.00 pence per share, up from 90.75p per share a year earlier.
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Insurance company Legal & General Group said its Retirement division is on track to double its new business sales in 2016. Legal & General said sales in the Retirement business now stand at GBP5.40 billion, up from GBP2.90 billion in 2015. The company said that sales include GBP1.40 billion in sales since June 30, and that customer demand has not been impacted by uncertainty around the UK's vote to leave the European Union, low interest rates or the introduction of Solvency 2 capital requirements for insurers in the EU.
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Water company United Utilities Group said trading in the half-year to the end of September has been in line with its expectations and said underlying profit for the period will be slightly higher due to lower spending. Revenue for the half will be slightly lower year-on-year, the group said, reflecting the accounting impact of the Water Plus joint venture that it sealed with blue-chip peer Severn Trent in June. Underlying operating profit for the first half will be marginally higher year-on-year, however, due to slightly lower infrastructure renewal spending, though this is due to increase in the second half.
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Mediclinic International said it continued to see growing demand for its services and maintained its guidance for its financial year to the end of March 2017. The private healthcare company said it traded in line with management's expectations for the five months ended August 31.
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Defence services company QinetiQ Group said it has hired the outgoing chief financial officer of engineer Rolls-Royce Holdings to take up the same role at QinetiQ. David Smith will become the new QinetiQ CFO in 2017, taking over from David Mellors when he leaves to become the finance chief of Cobham. Smith will join QinetiQ from Rolls-Royce, which last week hired Stephen Dainith from media group Daily Mail & General Trust to replace Smith as its CFO.
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Travel operator Thomas Cook Group maintained its guidance for its full financial year, after the summer 2016 holiday season ended as expected and winter bookings are so far in line with last year. Thomas Cook said it saw strong demand for most destinations apart from Turkey in the summer period, with overall bookings down 4%, but up 8% excluding Turkey. Demand for Turkey has weakened dramatically over the past year due to the terrorist attacks and political turmoil which have plagued the country. Meanwhile, winter 2016/17 bookings are up 8% in the UK, but down 3% in Northern Europe due to capacity cuts and a strong comparative period the year before.
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AG Barr reported growth in profit in the first half of its financial year, but revenue declined in a challenging and competitive environment, and it warned on higher input costs following the UK's vote to leave the European Union. The soft drinks company, which makes brands including IRN-BRU, Rubicon and Strathmore Water, said its pretax profit in the six months to the end of July grew to GBP21.1 million from GBP16.9 million the year before, although revenue fell to GBP125.6 million from GBP130.3 million. AG Barr will pay an interim dividend of 3.53p, up from 3.36p the year before.
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Merchant bank Close Brothers Group said it achieved increased growth across its lending businesses despite more challenging market conditions in the year to the end of July, as competitors enter its niche market areas. Close Brothers reported a pretax operating profit of GBP228.65 million for the financial year ended July 31, up from GBP219.9 million the year prior. Operating income grew to GBP687.4 million from GBP672.8 million. Close Brothers' net interest margin dipped to 8.2% for the year from 8.6%. The bank proposed a final dividend of 38.0p, up 7% from 35.5p in 2015. This results in a total dividend for the financial year of 57.0p, up from 53.5p.
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Card Factory reported growth in profit in the first half of its financial year on higher revenue and it said it is on track to meet full-year expectations. The discount card and gift retailer said its pretax profit in the six months to the end of July rose to GBP27.0 million from GBP24.0 million the year before, as revenue grew to GBP169.2 million from GBP161.4 million. Card Factory said its results were boosted by improvements in the quality and range of both card and non-card categories, with good ongoing growth in average spend, helping like-for-like sales to grow by 0.2% year-on-year. It did say, however, that sales growth from its stores was slightly lower than normal due to softer footfall.
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MARKETS
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London shares gave up opening gains and were lower in late morning trade, with Wolseley leading the blue-chip fallers. Brent crude was lower as Organization of the Petroleum Exporting Countries meet at an energy conference in the Algerian capital of Algiers. Wall Street was pointed to a higher open.
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FTSE 100: down 0.3% at 6,800.47
FTSE 250: down 0.9% at 17,565.81
AIM ALL-SHARE: down 0.1% at 816.09
GBP: flat at USD1.2940 (USD1.2974)
EUR: flat at USD1.1244 (USD1.1275)
GOLD: down at USD1,336.19 per ounce (USD1,340.84)
OIL (Brent): down at USD46.57 a barrel (USD47.29)
(changes since previous London equities close)
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ECONOMICS AND GENERAL
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US presidential hopefuls Donald Trump and Hillary Clinton clashed on their domestic and international agendas in a wide-ranging first debate filled with personal attacks and acrimony. The highly anticipated contest covered the two candidates' economic policies, race relations, the war against Islamic State, and US international ties. Republican Trump appeared confident initially as he discussed his opposition to trade deals, his views on race relations and fighting crime. When the debate shifted to foreign policy, Democrat Clinton took control and seemed to frequently bait Trump despite his repeated attempts to interrupt. The first of three debates came as the race has narrowed. An opinion poll released Monday showed a dead heat at the national level, with both nominees receiving 46% of likely voters in a Bloomberg survey.
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UK shadow chancellor John McDonnell thrilled unions at the Labour Party Conference by announcing plans to require employers by law to pay a "real living wage" expected to be more than GBP10 an hour in 2020 if Labour win the general election. The shadow chancellor boldly reclaimed the mantle of "socialism" for the party in a speech to its annual conference days after Jeremy Corbyn's emphatic re-election as leader. But business groups gave a wary response to McDonnell's promise of an "interventionist government", which would borrow to fund a GBP250 billion drive to boost investment in infrastructure and skills. The conference also saw vows to ban fracking and to make up funding for disadvantaged regions which will be lost when Britain leaves the EU.
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The English tourism industry is booming and is predicted to grow faster than the overall UK economy every year for the next decade, according to new research. The Local Government Association said councils that harness new powers given to them through devolution stand to gain the most from the growing industry. Domestic tourism is predicted to grow 2.9% every year over the next decade, outpacing the overall economy which is expected to expand 2.5% yearly, according to research commissioned by the LGA. Tourism is thriving in part due to holidaymakers who are reportedly taking advantage of the falling pound following the EU referendum vote to spend more while in the UK.
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An Italian referendum on constitutional reforms, which could destabilize one of the EU's leading nations if the 'no' camp prevails, will take place on December 4, Prime Minister Matteo Renzi's government decided. The proposed package is the biggest shake-up of Italy's 70-year republican set-up. It slashes the powers of the Senate and regional bodies, with the stated aim of giving the country stronger and more efficient governance. Italy is famous for its revolving door governments. Renzi has been in office for just over two and a half years, and his administration is already the fourth longest-lasting since the country became a republic in 1946.
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China's industrial profits grew markedly in August from a year ago, data from the National Bureau of Statistics showed. Profits earned by large firms in China surged 19.5% year-over-year to CNY534.8 billion in August, faster than the 11.0% climb in July.
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The European Central Bank and the People's Bank of China decided to extend their bilateral currency swap arrangement for three years. The swap arrangement was first put in place in 2013 and has a maximum size of CNY350 billion and EUR45 billion, the ECB said in a statement. The deal extension carries the same conditions and parameters.
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England manager Sam Allardyce faces a Football Association investigation over newspaper allegations he discussed ways to "get around" transfer rules. A report in the Daily Telegraph on Tuesday said Allardyce was secretly filmed speaking to undercover reporters posing as fake businessman about ways to circumvent a FA rule enacted in 2008 about third parties owning parts of a players economic rights.
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By Arvind Bhunjun; [email protected]; @ArvindBhunjun
Copyright 2016 Alliance News Limited. All Rights Reserved.
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