9th Jun 2020 11:28
(Alliance News) - The following is a summary of top news stories Tuesday.
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COMPANIES
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British American Tobacco said it is performing "well" despite the "very challenging" backdrop of Covid-19 and remains committed to its 65% dividend payout policy. The tobacco firm said it continues to see "good" pricing and "strong" volumes, with "good" share growth across all its three new categories - vapour, tobacco heating and modern oral. In developed markets - which accounts for 75% of group revenue - the company has seen "strong" results with "continued good" pricing. In emerging markets, however, BAT noted the coronavirus pandemic has had a "more pronounced" negative effect. The company pointed to the South African government's ban on tobacco sales continuing longer than expected as hurting sales. As a result, BAT now expects about a 3% headwind to constant currency revenue in 2020 from the pandemic. The tobacco firm is now guiding for constant currency adjusted revenue growth between 1% to 3%, down from previous guidance of 3% to 5% growth.
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AVEVA Group reported a sharp spike in annual profit, driven in large part by a rise in Subscription revenue. The Cambridge-headquartered engineering & industrial software firm posted a GBP92.0 million pretax profit for its year ended March 31. This is almost twice the prior year's GBP46.7 million profit figure. This resulted primarily from an 8.8% increase in AVEVA's revenue to GBP833.8 million from GBP766.6 million, thanks largely to a 45% increase in Subsription revenue to GBP316.8 million from GBP218.2 million. Maintenance revenue was up 3.8% at GBP201.7 million. AVEVA has declared a final dividend per share of 29.0 pence, maintained from financial 2019. AVEVA said this reflects confidence in its "resilience, strong balance sheet position and ongoing cash generation" as well as "prudence" in the face of a global economic crisis.
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Carnival said luxury cruise line Cunard will be extending its pause in operations due to the lingering impact of Covid-19. Sailings on Cunard ships Queen Mary 2 and Queen Victoria set to depart up to and including November 1 have been cancelled, along with all departures for the Queen Elizabeth up to and including November 23. Guests booked on cancelled voyages will automatically receive a 125% future cruise credit to be redeemed against any new booking made before the end of 2021.
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City of London Investment Group plans to buy US investment firm Karpus Management in an all-share merger that will see the owners of Karpus take a 48% stake in CLIG. The deal will see CLIG issue 24.1 million shares to Karpus for 325 pence per share, worth GBP78.4 million. The owners of Karpus, which at May 31 had USD3.4 billion in funds under management for 2,273 client accounts, will hold 47.6% of the enlarged company. At March 31, CLIG held USD4.4 billion funds under management.
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France will provide EUR15 billion worth of aid to help its aerospace industry survive the coronavirus crisis, Economy Minister Bruno Le Maire said. The crisis had brought the industry "to an abrupt halt" after years of growing air traffic, with orders for new planes down 80 to 90%, Le Maire said. Air traffic was unlikely to return to pre-crisis levels for two or three years. The sector's recovery would be "at best gradual, but more likely very slow," he told a press conference in Paris. Measures announced include a 12-month moratorium on export credit repayments, which Le Maire said would represent a EUR1.5 billion cashflow gain for the companies concerned. The aid should help European aircraft manufacturer Airbus as well as major aerospace and defence firms Dassault Systemes, Safran and Thales preserve jobs in France, the minister said.
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MARKETS
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London share prices were lower mid-morning as the positive momentum from last week's European Central Bank meeting and US jobs report waned. Stocks in the US were pointed to the lower open as the Federal Reserve's latest monetary policy meeting gets underway on Tuesday.
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FTSE 100: down 1.5% at 6,377.88
FTSE 250: down 1.7% at 17,827.87
AIM ALL-SHARE: down 0.7% at 884.07
GBP: down at USD1.2638 (USD1.2689)
EUR: down at USD1.1268 (USD1.1294)
GOLD: up at USD1,708.88 per ounce (USD1,691.14)
OIL (Brent): down at USD39.95 a barrel (USD41.14)
(changes since previous London equities close)
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ECONOMICS AND GENERAL
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New York City – the epicentre of America's coronavirus outbreak – began partially reopening its shattered economy Monday after almost three months of lockdown, as the World Health Organization warned the health crisis was "worsening" worldwide. Some 400,000 New Yorkers were allowed to return to work as retailers began offering limited in-store and curbside pickup, with construction and manufacturing also permitted to resume operations. As New York entered phase one of its reopening and some of Europe's hardest-hit nations lurched back to a new kind of normal, the WHO reported a record number of new cases globally. Director-general Tedros Adhanom Ghebreyesus said 136,000 cases had been reported in the past 24 hours, "the most in a single day so far," with the majority of them in the Americas and South Asia. "Although the situation in Europe is improving, globally it is worsening," he told reporters. Covid-19 caused more than 21,000 confirmed and probable deaths in New York after America's most populous city quickly became ground zero of the US epidemic in late March.
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Germany recorded the largest month-on-month decline in exports in April since the introduction of foreign trade statistics in 1950, Destatis said. Germany exported goods to the value of EUR75.7 billion in April, down 24% on the prior month. Exports decreased by 31% year-on-year. The Federal Statistical Office also reported imported goods to the value of EUR72.2 billion in April, down 17% month-on-month and 22% year-on-year. For both exports and imports, this was the worst month-on-month decline after calendar and seasonal adjustment since the beginning of the time series. The foreign trade balance showed a surplus of EUR3.5 billion in April, the lowest export surplus shown for Germany since December 2000, when it was at EUR1.7 billion. In April 2019, the surplus was EUR17.8 billion.
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The eurozone economy contracted less sharply than initially estimated during the first three months of the year, but the decline remained the largest on record, Eurostat said. On an annual basis, euro area gross domestic product fell 3.1% in the first quarter of 2020, after a 1.0% rise in the fourth quarter of 2019. The first-quarter reading was revised up from the preliminary figure of negative 3.2%. On a quarterly basis, eurozone first-quarter GDP fell 3.6% from the fourth quarter of 2019, following an 0.1% rise in the fourth quarter from the third. The first-quarter reading was revised up from the preliminary figure of negative 3.8%.
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UK retail sales remained in decline last month, numbers showed, though the May figure made for much better reading for a sector that has been battered by the Covid-19 crisis. The British Retail Consortium-KPMG sales monitor showed May sales dropped by 5.9% year-on-year, versus a 1.9% fall in the year prior. Despite the May fall being the second worst on record in the UK, it was an improvement from the 19% plunge registered in April. It also compares favourably to the three-month average fall of 9.4% but is worse than the 12-month average of a 2.6% decline. On a like-for-like basis, UK retail sales fell 7.9% annually in May, compared to a 2.2% decline a year earlier. BRC Chief Executive Helen Dickinson said: "Sales in May demonstrated yet another month of struggle for retailers across the country, despite an improvement on the previous month."
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