16th Oct 2019 11:26
(Alliance News) - The following is a summary of top news stories Wednesday.
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COMPANIES
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ASOS shares rallied after management assured it had a positive second half though its annual numbers still represented a "disappointing year" for the online fashion retailer. In the 12 months to August 31, revenue climbed 13% to GBP2.73 billion and UK retail sales grew by 15%, in a tough market, to GBP993.4 million. Neither of these were enough to prevent the 68% year-on-year profit drop to GBP33.1 million as distribution expenses climbed 9.1% to GBP415.6 million. Administrative expenses grew 17% to GBP883.6 million and sales costs soared 19%, both outpacing revenue growth. ASOS offered the market assurances that it ended the year in a better position than it started it in, "having identified the root causes of the issues" it faced. The huge operational change out of the way and the warehouse revamps in Atlanta and Berlin firmly in its wake are causes for caution optimism.
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Barratt Developments said it has started its new financial year well, with home deliveries rising 14%, though completions are to be at the lower end of a target range. Barratt delivered 3,252 new homes during the 15 weeks to October 13, 14% higher than the year before. Total forward sales at October 13 were "strong", comprising 12,963 homes worth GBP3.07 billion. That was up from 12,903 homes at the same point last year, though the value was down from GBP3.15 billion. Barratt's sales rate was 0.72 net private reservations per active outlet per average week, essentially flat on a year before. The company, which is holding its annual general meeting on Wednesday, is making "good" progress on medium-term targets as it looks to improve margins.
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SEGRO said it continued to secure high levels of new rental income in the third-quarter. The company, which manages and develops warehouses and light industrial property, said active asset management and high occupier demand resulted in a "strong" operational performance, with new headline rental income rising 21% year-on-year to GBP15.3 million in the three months to September 30 from GBP12.6 million in the year ago period. Year-to-date new headline rental income totalled GBP48.6 million, down 6.5% from GBP52.0 million a year ago. Rent from existing assets more than halved year-on-year to GBP2.1 million in the third quarter from GBP5.5 million a year ago, but the nine-month figure rose 54% to GBP10.6 million.
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Rio Tinto chopped its bauxite and aluminium production guidance amid worse-than-expected output, while production at Pilbara, located in western Australia, accelerated. The Anglo-Australian miner said Pilbara iron ore shipments of 86.1 million tonnes in the three months to the end of September were 5% higher than in the third quarter of 2018. Pilbara iron ore production of 87.3 million tonnes was 6% higher year-on-year and 10% higher quarter-on-quarter, reflecting a good recovery from the operational and weather challenges experienced earlier in the year. Looking ahead, Rio Tinto kept its guidance for all of 2019 unchanged, with the exception of bauxite production, which has been revised to around 54 million tonnes from a previously estimated range of 56 million to 59 million tonnes. Aluminium production guidance was revised downwards to around 7.7 million tonnes from 8.1 million to 8.4 million tonnes.
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Mediclinic International said it delivered a solid performance in the first half of its financial year across all of its operations, with revenue and earnings set to rise. For the six months to the end of September, the dual-listed private hospital group said adjusted earnings before interest, taxes, depreciation and amortisation will increase by around 3.5% from GBP231 million the year before. This is on revenue that is to grow by 9.0% on a reported basis from GBP1.39 billion the prior year. On a constant currency basis, revenue will increase by 6.5% year-on-year.
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MARKETS
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London shares were lower as fresh uncertainty in relation to Brexit and tensions between the US and China hit sentiment. Wall Street was pointed to a lower open with lender Bank of America set to report earnings before market open in New York. Film and television content streaming provider Netflix follows after the market close.
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FTSE 100: down 0.2% at 7,195.12
FTSE 250: down 0.6% at 20,070.44
AIM ALL-SHARE: up 0.6% at 876.55
GBP: down at USD1.2724 (USD1.2739)
EUR: flat at USD1.1031 (USD1.1036)
GOLD: flat at USD1,482.82 per ounce (USD1,481.99)
OIL (Brent): down at USD58.40 a barrel (USD59.38)
(changes since previous London equities close)
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ECONOMICS AND GENERAL
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UK inflation was unchanged on an annual basis in the month of September, according to the Office for National Statistics. The UK consumer price index rose 1.7% on an annual basis in September, a pace unchanged from August. September's inflation reading missed the market consensus estimate of 1.8%. The core inflation gauge - excluding volatile food and energy items - came in at 1.7% on an annual basis, up from 1.5% recorded in August. The Bank of England's target for inflation is 2.0%. On a monthly basis, UK CPI rose 0.1% in September, slower than August's rise of 0.4%. The reading also missed the market expectation of 0.2%.
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Brexit negotiations are to continue Wednesday on a final day of efforts to get a deal ready for a crucial EU summit on Thursday, after Tuesday's talks ran into the small hours of the morning. UK Prime Minister Boris Johnson is running out of time to get an agreement in place so it can be approved by European leaders at the Brussels summit starting on Thursday. A Number 10 source said progress was still being made in the talks, which ran to about 1.30am in the Belgian capital and will resume on Wednesday morning. Reports had suggested a deal was close ahead of a midnight deadline imposed by the EU, with the prime minister said to be making major concessions on the Irish border. But sources on both sides of the Channel downplayed the suggestions, and the PM's official spokesman said: "Talks remain constructive but there is more work still to do". The PM is expected to update his Cabinet on progress in the negotiations on Wednesday afternoon.
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A no-deal Brexit would be highly controversial in Scotland, Wales and Northern Ireland and risks taking the Union to "breaking point", a leading think tank has warned. The Institute for Government said that since Boris Johnson became UK prime minister, there has been a decline in engagement with the devolved governments. In a report, called No-deal Brexit and the Union, the think tank said: "A no-deal Brexit would be a high stakes gamble with the future of the Union."
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The Liberal Democrats have tabled an amendment to the Queen's Speech calling for any Brexit deal to be put to voters in a referendum. If the amendment backing a so-called "people's vote" is selected by the Commons Speaker, it could be voted on by MPs as early as Tuesday.
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China expressed "strong indignation and firm opposition" to the US House of Representatives' passage of a bill in support of Hong Kong protesters. The Hong Kong Human Rights and Democracy Act requires sanctions against Chinese officials "responsible for undermining fundamental freedoms" in the city. It also provides an annual review of whether Hong Kong is sufficiently autonomous from Beijing to maintain a special trading status with the US.
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A bid by the US to negotiate a ceasefire in north-eastern Syria appeared uncertain as Turkish President Recep Tayyip Erdogan rejected any truce in the region. Turkey will "never" declare a ceasefire, nor will it "negotiate with terrorists," Erdogan told reporters on his plane returning from a trip to Azerbaijan, according to CNN Turk and other media. The reports came after a US announcement that Vice President Mike Pence would travel to Turkey on Wednesday in the hope of negotiating a truce. Pence plans to meet Erdogan on Thursday, the vice president's office said, days after Trump hiked tariffs on Turkish steel imports and sanctioned Turkey's Defence Ministry and Energy Ministry, among other sanctions.
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US President Donald Trump's personal lawyer, Rudy Giuliani, said he will not comply with a subpoena from Democrats in Congress who have mounted an impeachment investigation against the president. The move comes as Democrats held two closed-door depositions of current and former Trump administration officials this week in their investigation into whether Trump unduly pressured the Ukrainian government for personal gain. "I will not participate in an illegitimate, unconstitutional, and baseless 'impeachment inquiry'," Giuliani tweeted.
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