23rd Jul 2020 11:23
(Alliance News) - The following is a summary of top news stories Thursday.
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COMPANIES
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Consumer goods company Unilever reported a 4.1% rise in first-half profit and said that it saw a double-digit sales growth in hygiene products due to the Covid-19 pandemic, which help offset decline in sales of food service and out of home ice cream sales. Unilever traditionally relies in particular on purchases of its ice cream brands such as Magnum and Ben & Jerry's during summer months. The maker of Dove soap and Domestos household cleaner said it increased its hand sanitiser capacity by 600 times across several brands and rolled out its Lifebuoy hygiene brand to more than 50 markets. In addition, Unilever said that it has decided to form a separate entity for its tea business, which generated revenue of EUR2 billion in 2019. The company, which announced a strategic review of its tea business in January, however intends to retain its tea businesses in India and Indonesia and the partnership interests in the ready-to-drink tea joint ventures.
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Johnson Matthey said it expects operating performance to be heavily weighted to the second half of financial 2021, with first-half operating performance materially below last year, largely due to weaker activity in its Clean Air division. The FTSE 100-listed company said sales in the first quarter were down materially due to Covid-19 pandemic. Clean Air division, which provides emissions control, saw a 50% drop in sales as a result of lower consumer demand and temporary customer shutdowns. The unit, however, saw improvement with April, May and June sales across Clean Air down 75%, 60% and 20% respectively. Johnson Matthey expects July sales of Clean Air to be down 20%, with improvement through the remainder of the second quarter.
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Croda International said earnings for the first half of 2020 were hurt by the Covid-19 outbreak, but it declared an unchanged dividend payout. For the six months ended June 30, Croda posted revenue of GBP672.9 million, down 5.8% from GBP714.7 million a year prior. Pretax profit was GBP144.9 million, down from GBP166.2 million. The Yorkshire-based company blamed the deterioration in its performance on a decline in sales due to the Covid-19 lockdowns, with sales in its Personal Care business falling 8% and Life Sciences sales falling by 1%. Sales at Performance Technologies were down 5%, due to lower industrial demand, particularly in the automotive market. Croda said it will pay an interim dividend of 39.5 pence, unchanged from a year prior.
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RELX said its earnings for the first half of 2020 were hurt by Covid-19-related disruption to its exhibitions business. For the six months ended June 30, RELX posted revenue of GBP3.50 billion, down 10% from GBP3.89 billion the year prior. Adjusted pretax profit was GBP858 million, plunging 25% from GBP1.14 billion. The London-based company said its Exhibitions unit - which accounted for 16% of revenue and 13% of adjusted operating profit in 2019 - was hurt significantly by Covid-19 as the pandemic forced countries to block public events and gatherings. In the Exhibitions arm, first-half revenue of GBP201 million was less than a third of GBP684 million last year, and the business swung to an adjusted operating loss of GBP117 million from a profit of GBP231 million. An interim dividend of 13.6 pence was declared, unchanged from the year prior. Looking ahead, RELX said the outlook for the remainder of 2020 remains "highly uncertain". It added it does not intend to resume the suspended 2020 share buyback programme this year.
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Sage Group reported solid growth for the first nine months with recurring revenue expected to grow a good amount for the financial year. The accounting software firm said it expects recurring revenue in the financial year ending September 30 to grow by 7% to 8%, with a organic operating margin of 22%. Sage Group's total organic revenue saw an increase of 4.1% to GBP1.40 billion in the first nine months ending June 30 from GBP1.34 billion, with a 1.1% increase in revenue for the third quarter to GBP460 million from GBP455 million a year before. Recurring revenue for the nine months ending June 30 increased 9.0%. This was driven by a software subscription growth of 23% to GBP885 million, compared to prior year's nine-month result of GBP722 million.
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MARKETS
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London shares were higher shrugging off concerns about worsening relations between the US and China. Unilever was the best blue-chip performer, up 7.0%. Gold continued to appreciate, trading at its highest levels since 2011. US stock market futures were pointed higher with Amazon.com, Twitter and AT&T reporting their second-quarter results.
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FTSE 100: up 0.5% at 6,238.76
FTSE 250: up 0.2% at 17,503.21
AIM ALL-SHARE: down 0.2% at 887.14
GBP: flat at USD1.2729 (USD1.2731)
EUR: flat at USD1.1590 (USD1.1585)
GOLD: up at USD1,882.73 per ounce (USD1,864.40)
OIL (Brent): up at USD44.64 a barrel (USD43.72)
(changes since previous London equities close)
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ECONOMICS AND GENERAL
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US-Chinese relations, already tense over the coronavirus pandemic and Beijing's crackdown in Hong Kong, deteriorated once again Wednesday as Washington ordered the closure of the Chinese consulate in Houston within 72 hours. China slammed the US move, which came one day after the unveiling of a US indictment targeting two Chinese nationals for allegedly hacking hundreds of companies worldwide and seeking to steal virus vaccine research. US President Donald Trump threatened more consulate closures, telling reporters "it's always possible". "We're setting our clear expectations for how the Chinese Communist Party is going to behave," US Secretary of State Mike Pompeo said during a visit to Denmark. "President Trump has said 'enough'," Pompeo added.
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The number of novel coronavirus infections around the world passed 15 million Wednesday, with Latin America and the Caribbean, one of the hardest-hit regions, notching more than four million cases. In the US, home to over a quarter of global infections, Trump warned that the pandemic was likely to get worse before it gets better. The US data makes grim reading, with more than 143,000 fatalities and regular daily death tolls of more than 1,000. Australia, Belgium, Hong Kong and Japanese capital Tokyo had all used restrictive measures to successfully beat outbreaks earlier in the pandemic, but all are now facing an upsurge in cases. Brazil, the world's second hardest-hit country after the US, has registered half of Latin America's surging caseload, with 2.2 million infections and 82,771 deaths.
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German consumer confidence rose in July as consumers gradually put the coronavirus shock of earlier this year behind them, data from market research institute Growth from Knowledge showed. The consumer climate in Germany has improved significantly for the third consecutive month, with propensity to buy gaining 23.1 points in July to reach 42.5 – just four points lower than at the same time last year. As a result, GfK has forecast an overall figure of negative 0.3 points for August, 9.1 points higher than its level in July, which was revised to negative 9.4 points from negative 9.6 points. "There is no doubt that the reduction in value-added tax has contributed to the extremely positive progress. It is clear that consumers are looking to make major purchases earlier than planned, which will help boost spending this year," explained Rolf Burkl, GfK consumer expert.
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Confusion over whether customers will have to wear face coverings in takeaways and sandwich shops in England must be cleared up, opposition members of Parliament have said. UK Health Secretary Matt Hancock announced on July 14 that wearing a face-covering in shops and supermarkets will be compulsory from Friday, July 24, with anyone failing to comply facing a fine of up to GBP100. But the new regulations will only be published on Thursday, less than 24 hours before they come into effect, and ministers were accused of not providing enough clarity. While face coverings will be mandatory in shops and supermarkets from Friday, the opposition accused ministers of "making things up as they go along" over takeaways and sandwich shops.
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