25th Feb 2020 11:18
(Alliance News) - The following is a summary of top news stories Tuesday.
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COMPANIES
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Meggitt reported revenue of GBP2.28 billion in 2019, up 9.6% from GBP2.08 billion in 2018, lifting pretax profit 33% to GBP286.7 million from GBP216.1 million. Orders were up 10% year-on-year in 2019 at GBP2.47 billion, which reflects a strong performance in growing end-markets. The company also said Chair Nigel Rudd is stepping down, but will remain in his role until a successor is found. Looking ahead, Meggitt said "sector specific factors" including the production halt of the grounded Boeing 737 MAX and supply chain disruption, as well as the "wider macroeconomic impact" of coronavirus are expected to hold back margin progression in the short-term. Meggitt expects 2020 organic revenue growth in a range of 2% to 4% and 2020 underlying operating margin improved by 30 to 50 basis points.
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Croda International reported a dip in profit for 2019, on flat sales, but was able to up its dividend payout. In 2019, the Yorkshire-based specialty chemicals company recorded pretax profit of GBP302.3 million, down 4.9% on the GBP317.9 million seen in 2018. Revenue was marginally lower year-on-year at GBP1.38 billion from GBP1.39 billion the year before. Croda declared a total ordinary dividend of 90.00 pence in 2019, up 3.4% in the 87.00p distributed in 2018. The company declared a 115p special dividend in 2018.
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Prudential said it was willing to facilitate a dialogue between shareholder Third Point after the US hedge fund sent a letter to the company on Monday saying it had acquired a stake of just under 5%. Dan Loeb's New York-based fund wrote to Prudential's board calling on the 332-year old insurer to split its existing US and Asian operations and list them as separate entities. Third Point said that there was "no strategic rationale" for the company to be listed in London, following its demerger of UK unit M&G last year.
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SIG said Chief Executive Meinie Oldersma and Chief Financial Officer Nick Maddock have both resigned with immediate effect. Oldersma returned to work on a full-time basis on February 10, following a leave of absence of just under two months due to a family illness. SIG said Steve Francis will become CEO, also with immediate effect, on an initial contract until the end of 2020. SIG noted that he is a "strong" leader with a proven track record of returning radically restructured businesses back to growth. SIG said Kath Kearney-Croft - who joined SIG in January - was appointed as interim CFO with immediate effect. Kearney-Croft was initially hired to provide support to the executive team during the leave of absence of Oldersma. SIG said its 2019 results are anticipated to be in line with the guidance provided in January of underlying pretax profit of GBP42 million. In January, the building products supplier guided for a substantial drop in profit for 2019, amid challenging market conditions and declining revenue.
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AstraZeneca said it has agreed to sublicence the global rights to Movantik to RedHill Biopharma for USD67.5 million. Movantik is indicated as a treatment for opioid-induced constipation. Redhill will pay Astra USD52.5 million upfront for the global rights - excluding Israel, Canada, and Europe - to the drug when the deal closes, plus another USD15 million non-contingent payment in 2021. During the transition period, Astra will keep manufacturing and supplying Movantik, the brand name for naloxegol, to RedHill. Astra entered a US co-commercialisation agreement for Movantik with Daiichi Sankyo Inc in 2015, which Astra will transfer to RedHill. Movantik generated USD96 million worth of sales in the US in 2019. The divestment is set to complete in the first quarter of 2020, provided the "customary closing conditions and regulatory clearances" are met. It will not alter Astra's 2020 guidance.
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Tesco said it will sell its 20% holding in Gain Land to a subsidiary of its joint venture partner China Resources Holdings for around GBP275 million in cash. Gain Land is Tesco's Chinese joint venture with China Resources Holdings. It was established in 2014. The FTSE 100-listed UK supermarket chain said the proceeds realised from the sale will be used for general corporate purposes. It also noted that the disposal will allow it to focus on its core operations. The transaction is expected to complete on Friday.
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MARKETS
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London shares turned lower mid-morning on Tuesday, despite opening in the green, as concerns over the global spread of the coronavirus continue to persist. In the FTSE 100, Meggitt was the worst performer, down 4.5%, while SIG was the worst performer in the FTSE 250, down 16%. Gold managed to recoup earlier losses as demand for the safe-haven asset increased amid virus fears. Wall Street was called for a higher open on Tuesday, after suffering its biggest fall in two years on Monday.
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FTSE 100: down 0.8% at 7,100.12
FTSE 250: down 0.5% at 21,004.66
AIM ALL-SHARE: down 0.2% at 940.81
GBP: up at USD1.2978 (USD1.2937)
EUR: down at USD1.0837 (USD1.0861)
GOLD: flat at USD1,655.33 per ounce (USD1,655.88)
OIL (Brent): down at USD56.12 a barrel (USD56.49)
(changes since previous London equities close)
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ECONOMICS AND GENERAL
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The substance of the Brexit trade talks is due to be finalised as ministers on both sides of the Channel prepare to sign-off on their negotiation red lines. The EU General Affairs Council are meeting on Tuesday morning in Brussels to approve the bloc's mandate for trade talks with the UK, which are gearing up to start next month. The announcement on Brussels' agreed terms, which could be controversial after earlier drafts contained what Downing Street read as a veiled reference to the Elgin Marbles, is expected in the afternoon. In Westminster, the Brexit inner cabinet will also meet at Number 10 to discuss the UK's negotiation stance. The final agreement is then due to be published online and presented in Parliament on Thursday.
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Travellers returning to the UK from northern Italy should self-isolate as part of measures to stop the spread of coronavirus, UK ministers have said. Health Secretary Matt Hancock said official advice has been changed to say that those who have been to northern Italy - north of Pisa - should self-isolate if they have flu-like symptoms. Speaking on BBC Breakfast, he added: "If people have been to the affected areas that the Italian government have quarantined then they should self-isolate whether or not they have symptoms." In Italy, where 229 people have tested positive for the virus and seven have died, police have manned checkpoints around a dozen quarantined northern towns.
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The German economy stopped expanding in the fourth quarter of 2019, the federal statistics office said. The gross domestic product - price, seasonally and calendar-adjusted - did not grow at all in the last quarter of 2019 from the third quarter. Quarter-on-quarter growth in the third quarter had been 0.2%. Year-on-year, the pace of economic growth decelerated towards the end of the year, the statistics office said. Price-adjusted gross domestic product rose by 0.3% in the fourth quarter compared to the same period a year ago. Annual GDP growth had been 1.1% in the third quarter.
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Donald Trump has called his trip to India "unforgettable", "extraordinary" and an expression of "love" as he delivered a joint statement with Indian Prime Minister Narendra Modi following their bilateral talks. Trump announced that India has signed a deal to purchase more than USD3 billion of advanced military equipment, including helicopters. And he said the two leaders made progress on what he describes as a "comprehensive trade deal" after talks.
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