16th Jan 2020 11:16
(Alliance News) - The following is a summary of top news stories Thursday.
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COMPANIES
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Pearson said it expects up to a 15% decline in operating profit for 2020 amid the changing preferences of learners. Pearson said its underlying revenue was flat, while adjusted operating profit was GBP590 million, within the guidance range, and up 8.1% from GBP546 million in 2018. For 2020, Pearson expects to deliver adjusted operating profit between GBP500 million to GBP580 million, including the 25% stake in Penguin Random House. In addition, the publishing and education company said Chief Financial Officer Coram Williams will be leaving the company to take on a similar role at an undisclosed company based in Europe. The move follows the retirement of Chief Executive John Fallon - which was announced in mid-December. Fallon intends to leave in 2020, once a successor has been appointed.
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Whitbread said it delivered a "robust" performance in the third quarter despite challenging market conditions in the UK and it is on track to achieve its full year expectations. In a trading update for the third quarter of its financial year, the Premier Inn chain operator said UK total sales grew by 0.3%, "marginally improving" the year-to-date run rate. Whitbread said total sales of Premier Inn UK were down 0.4%, compared to 0.1% growth in the second quarter. In London, sales grew 5%. Meanwhile like-for-like Premier Inn UK sales were down 2.1%. Growth in Germany "remains firmly on target" and the company continues to extend the total committed pipeline. Looking ahead, in 2021 the company expects net margin headwind of about GBP60 million due to inflation, wages and other costs.
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Associated British Foods reported a sales rise at its Primark high street retail business over the recent 16-week period. Elsewhere, the period to January 4 saw sales rises in the Sugar unit, the Ingredients unit and revenue climbed in the agriculture business. The laggard, AB Foods said, was its Grocery unit, which saw sales level with last year. Primark sales were up 3.0% year-on-year, or 4.5% higher at constant currency. AB Foods largely attributed this to an increase in Primark's selling space. On its full-year guidance, AB Foods said: "Our outlook for the group is unchanged, with progress expected, on both a reported and an IFRS 16 adjusted basis, in adjusted earnings per share for the year.
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Hays warned on interim profit as difficult market conditions persist around the world. The recruiter's net fees for its second quarter ended December 31 fell 7% on the year before, and declined 4% on a like-for-like basis. In the UK & Ireland, net fees fell 4% both reported and like-for-like, while Australia & New Zealand dipped 11% and 7% like-for-like. In Germany, net fees were 12% lower and 9% down like-for-like, while Rest of World net fees fell 1%, but did rise 1% like-for-like. Following this second-quarter performance, Hays now expects operating profit for the first half of around GBP100 million, which would be an approximate drop of 19% from the year before.
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MARKETS
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London shares were lower as investors shift focus to 'phase two' of the US-China trade deal after the two countries put pen to paper for the 'phase one' trade agreement on Wednesday. Pearson was the worst blue-chip performer, down 6.5%. Wall Street was set for a higher open, with major stock indices ending at record highs on Wednesday. Ahead in the US earnings calendar on Thursday, investment bank Morgan Stanley will report fourth-quarter earnings before the opening bell in New York.
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FTSE 100: down 0.4% at 7,608.95
FTSE 250: down 0.3% at 21,651.41
AIM ALL-SHARE: down 0.2% at 968.73
GBP: up at USD1.3052 (USD1.3024)
EUR: unchanged at USD1.1159
GOLD: firm at USD1,555.05 per ounce (USD1,549.30)
OIL (Brent): up at USD64.40 a barrel (USD63.70)
(changes since previous London equities close)
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ECONOMICS AND GENERAL
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Articles of impeachment charging US President Donald Trump with abuse of power and obstruction of Congress were delivered to the Senate on Wednesday, setting in motion a historic trial that threatens the US leader with removal from office. Republican Senate leader Mitch McConnell announced that the articles would be formally read to the chamber Thursday at noon in the US, after which Supreme Court Chief Justice John Roberts will be sworn in to preside over the trial. Senators will then be sworn in as jurors on Thursday, and preparations will get underway for an impeachment trial that will open on Tuesday, January 21. The two articles of impeachment - one for abuse of power and the other for obstructing the House investigation - were delivered in blue folders in a solemn procession by the newly appointed House managers, seven Democrats who will prosecute the case against the president.
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The UK property market has been given a lift by the general election result, according to surveyors. The number of house sales taking place across the UK has increased for the first time in seven months, the Royal Institution of Chartered Surveyors report for December said. Agreed sales in London and East Anglia in particular saw an improvement, although sales reportedly weakened in Northern Ireland and Scotland. Property professionals' expectations for house sales in the year ahead have seen a big improvement, the Rics found. An overall net balance of 66% expect sales will increase rather than decrease over the year ahead, up from 35% the previous month.
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Consumer prices in Germany rose by 1.4% on an average annual basis in 2019, the Federal Statistical Office of Germany said. The average year-on-year increase in 2019 was down on the 1.8% average rise seen in 2018. The deceleration was attributed to a marked slowdown in energy price inflation to 1.4% in 2019 from 4.6% in 2018. Turning to December, the annual German consumer price inflation rate was 1.5%, accelerating from 1.1% in November. December's reading marked the first acceleration since July. Month-on-month, consumer prices were up 0.5% after a 0.8% fall in November. The harmonised index of consumer prices, calculated for EU-wide comparison, rose by 0.6% over the month before, after falling 0.8% in November. Year on year, the index rose 1.5%, accelerating from a rise of 1.2% in the previous month.
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Rebecca Long-Bailey is leading the race to be the next UK Labour leader, a new poll has suggested. The shadow business secretary appears to have clawed back ground on Keir Starmer, after the first poll of Labour members put him narrowly ahead. Long-Bailey would win 42% of first preference votes to the shadow Brexit secretary's 37%, according to a survey by Survation – the second carried out so far in the leadership race. The pollsters asked readers of Labour List, a website focused on party news, for their preferences and then weighted the results to reflect the membership.
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