7th Feb 2020 11:12
(Alliance News) - The following is a summary of top news stories on Friday.
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COMPANIES
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Admiral expects to increase its final payout by up to 18% following a "better-than-expected" financial performance in 2019. The FTSE 100-listed insurer said it expects to report a pretax profit in the range of GBP510 million to GBP540 million in 2019, representing 6% to 13% growth on the prior year, thanks to higher-than-expected reserve releases in UK motor insurance. The company's UK motor insurance business grew marginally in customer numbers during the year. As a result, Admiral said it expects to propose a 73 pence to 78p per share final dividend for 2019, having paid a 66.0p a share a year ago. Admiral also said it will award its employees with a special cash bonus of GBP500, which will be paid in the first half of 2020.
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Peter Hargreaves, the co-founder of Hargreaves Lansdown, has sold GBP550 million worth of stock in the FTSE 100-listed fund supermarket, via an accelerated share bookbuild offering to institutional investors. He sold 34.4 million shares at a price of 1,600.00 pence per share. Hargreaves Lansdown shares were trading at 1,647.60p on Friday mid-morning. Following the sale, Peter Hargreaves still holds an interest in about 24% of the company's issued share capital. Peter Hargreaves said the sale is part of a "process of long-term financial planning" to diversify his assets. "I remain, and will continue to be, a substantial shareholder in Hargreaves Lansdown. I am very proud of the business that I co-founded and helped build."
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Burberry said the outbreak of coronavirus in China is having a negative effect on demand for its luxury goods. The luxury fashion retailer said 24 of its 64 stores on the Chinese mainland are closed, with the remaining stores experiencing a significant decline in customer visits. Although the spending patterns of Chinese customers across Europe hasn't been affected, Burberry said it expects the situation to worsen due to widening travel restrictions. The company noted that the benefit of actions taken to mitigate the negative impact will be limited due to the proximity to the end of its financial year in March.
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The UK utilities regulator said energy bills will fall for around 15 million customers from April, as price caps for gas and electricity are lowered. The default annual price cap for 11 million customers will fall by GBP17, or 1.5%, to GBP1,162 from GBP1,179, when the measures come into effect in April, Ofgem said. In pre-payment meters, effectively a pay-as-you-go system where customers manually top up their energy meter, the price cap also has been lowered, by 1.4% to GBP1,200 from GBP1,217. This cap affects four million households, Ofgem noted.
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Credit Suisse said the board has "unanimously" accepted the resignation of Tidjane Thiam as chief executive. His resignation will be effective Friday next week. He will step down following the presentation of the company's fourth-quarter and full-year results, the Swiss bank said. Thomas Gottstein, who has been with Credit Suisse for more than 20 years, has been appointed as the new CEO. He is currently CEO of Credit Suisse (Switzerland). "I had no knowledge of the observation of two former colleagues. It undoubtedly disturbed Credit Suisse and caused anxiety and hurt," Thiam said. "I regret that this happened and it should never have taken place." Credit Suisse was shaken by the discovery in September that surveillance had been ordered on star banker and former wealth management chief Iqbal Khan. Kahn was tailed after he jumped ship to competitor UBS, sparking fears he was preparing to poach employees and clients.
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L'Oreal after the market close on Thursday said it achieved its best sales growth in over 10 years in 2019, with profit also rising. Fourth-quarter sales grew 11% to EUR7.88 billion, up 10% on a like-for-like basis. For 2019 overall, sales grew 11% to EUR29.87 billion, increasing 8.0% like-for-like. Pretax profit for the year was EUR5.41 billion, up 4.4% from EUR5.18 billion in 2018. Looking ahead, L'Oreal said it is "too early" to assess the impact from coronavirus on its business in China and travel retail operations in Asia, but it is "confident in our capacity this year again to outperform the beauty market and achieve another year of growth in both sales and profits".
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MARKETS
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London was giving back some of the solid gains made this week, as investors eagerly await the US jobs report in the afternoon.
The continued uncertainty surrounding the coronavirus outbreak is still heavy in the minds - particularly the doctor who warned the Chinese government over its deadly potential died from the disease overnight - pushing aside the positive market sentiment that had been created by China's announcement of cuts to tariffs on imports from the US.
US was pointed downwards, with the Dow Jones Industrial Average and the S&P 500 expected to open off 0.4% with the Nasdaq Composite 0.5% lower.
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FTSE 100: down 51.21 points, or 0.7%, at 7,453.77
FTSE 250: down 0.6% at 21,453.39
AIM ALL-SHARE: down 0.1% at 962.73
GBP: soft at USD1.2927 (USD1.2933)
EUR: soft at USD1.0952 (USD1.0980)
GOLD: higher at USD1,568.80 per ounce (USD1,563.48)
OIL (Brent): higher at USD54.76 a barrel (USD55.14)
(changes since previous London equities close)
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ECONOMICS AND GENERAL
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US President Donald Trump and Chinese President Xi Jinping reaffirmed their backing of an interim deal meant to stave off the countries' trade war. In a phone conversation with Xi, Trump noted the "great achievement" of the "phase one" trade deal and recommitted to its implementation, a White House spokesman said. Xi said the agreement, signed last month in Washington, was beneficial to China, the US and the world, according to Xinhua news agency. The talk came a day after China announced it would halve punitive tariffs on USD75 billion worth of US imports starting on February 14, the same date the US was due to cut tariffs on some Chinese products.
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A Chinese doctor who was punished after raising the alarm about China's new coronavirus died from the pathogen on Friday, sparking an outpouring of grief and anger over a worsening crisis that has now killed more than 630 people. At least 31,000 people have now been infected by a virus that ophthalmologist Li Wenliang and colleagues had first brought to light in late December. The disease has since spread across China, prompting the government to lock down cities of tens of millions of people, while global panic has risen as more than 240 cases have emerged in two dozen countries. A quarantined cruise ship in Japan now has 61 confirmed cases.
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House prices in the UK saw a modest rise in January, but slowed from the previous month, data from Halifax. House prices grew 4.1% year-on-year in January. On the month-on-month basis, prices rose 0.4%, and were up 2.3% on the quarter. "House prices kicked off the year with a modest monthly increase, rising by 0.4% in January following the stronger gains of 1.8% and 1.2% seen in December and November, respectively. As a result, annual growth remained relatively stable, up just a fraction from the end of 2019," said Russell Galley, managing director at Halifax. Annual growth stood at 4.0% in December. The average house price stood at GBP240,054 in January, versus GBP238,963 in December and GBP230,721 at the start of 2019.
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German industrial production was further ground down in December as the US-China trade conflict dragged on, official data showed, while the country's prized trade surplus also ticked lower over 2019 as a whole. Output at maker firms fell 3.5% month-on-month in December, statistics authority Destatis said in seasonally adjusted data, and was down 6.8% on the year. Production was lower across all manufacturing sectors, with producer goods, consumer goods and capital good firms falling back. Meanwhile there was also a sharp fall of 8.7% in the construction sector, which had been one of the few bright spots.
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Democratic presidential candidate Bernie Sanders joined Pete Buttigieg on Thursday in claiming victory in the chaotic Iowa caucuses as an exasperated party chairman ordered a review of the results of the first nominating contest. Sanders, the leftist senator from Vermont, and Buttigieg, the former mayor of South Bend, Indiana, have been separated by a razor-thin margin in the results released so far from Monday's caucuses. Buttigieg declared himself the winner based on the number of delegates from the Midwestern state who will be sent to the Democratic convention in July while Sanders staked his claim based on the popular vote. Three days after the caucuses, the final results are yet to be released and some doubts have been raised about their accuracy.Democratic Party chairman Tom Perez finally stepped in on Thursday, demanding a review from the caucuses marred by embarrassing technical problems.
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