25th Jun 2020 11:26
(Alliance News) - The following is a summary of top news stories Thursday.
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COMPANIES
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Ryanair Holdings will challenge the EUR9 billion rescue of Deutsche Lufthansa, one of the world's biggest airlines, before an EU court, a top executive said. Ryanair has already appealed to the Luxembourg-based General Court against aid granted by France, Denmark and Sweden to airlines and cleared by EU competition enforcers. The fate of Lufthansa will be decided later Thursday at an extraordinary shareholders' meeting, in which a EUR9 billion government bailout will be put to a vote. The deal, which Lufthansa has said is necessary in order to save the company from insolvency, will see the German government taking a 20% share in the company. Valued at around EUR300 million, that stake is only a small part of the total package - but it has irked investors, who will see their own shares diluted as a result of the state intervention. Meanwhile, the government is set to pay EUR2.56 per share, around a quarter of the current stock market price.
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London Stock Exchange Group has poached Anna Manz, the current Johnson Matthey chief financial officer, as its own CFO. Manz departs London-based speciality chemicals company Johnson Matthey after close to four years, stepping down November 20 - the day before Johnson Matthey's interim results publication. The search for her successor has begun. At stock exchange and clearing operator LSEG, Manz replaces outgoing CFO David Warren starting November 21. She will report to LSEG Chief Executive Officer David Schwimmer. LSEG said back in October that Warren would be leaving by the end of 2020. It said at the time that he would stay on through the close of the company's proposed acquisition of market data firm Refinitiv.
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BAE Systems expects its performance in the second half to be much stronger than in the first half as it returns towards "full operational tempo". the FTSE 100-listed firm said it has continued to focus on its near-term priorities, including supporting its supply chain in dealing with pandemic-related disruption and ensuring the maintenance of appropriate liquidity. In parallel, BAE Systems said it has taken actions to enhance its resilience and position the business towards a return to "full operational tempo". The company noted that it is investing in new facilities to meet the growth profile in a number of sectors. BAE Systems said its productivity levels in June have improved within its defence unit after the pandemic hurt the business in the second quarter.
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Auto Trader Group proposed no final dividend for its recent financial year, as it looks to preserve cash amid the Covid-19 outbreak, despite reporting a solid annual performance. For the year that ended in March, the Manchester-based automotive marketplace reported a pretax profit of GBP251.5 million, up 3.8% from GBP242.2 million the year before, partly due to a fall in finance costs to GBP7.4 million from GBP10.2 million. This was on revenue that grew by 3.9% year-on-year to GBP368.9 million from GBP355.1 million, with average revenue per retailer increasing by 5.7% to GBP1,949 from GBP1,844, as growth from products and pricing more than offset the reduction in stock. As a result of declaring no final dividend, Auto Trader's total annual dividend stays at 2.4 pence per share, down 64% from 6.7p the year before.
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Royal Mail reported a slump in full-year profit, announced plans to cut 2,000 management jobs and said it is targeting the restart of dividends in the 2022 financial year. Revenue for the financial year that ended in March was GBP10.84 billion, up 2.5% from GBP10.58 billion the year before, which comprised 53 weeks. Pretax profit dropped to GBP180 million from GBP241 million as operating costs rose 3.7% to GBP10.62 billion. Profit was hit by a GBP51 million regulatory fine and a GBP91 million impairment charge, which was up from GBP68 million the year before. To save costs, Royal Mail is to cut around 2,000 UK management roles, which is expected to deliver an annual operating profit benefit in the 2022 financial year of GBP330 million. The year's dividend per share of 7.5 pence reflects the board's decision not to recommend a final dividend, against a total payout of 25p the year before. Royal Mail does not expect to pay a dividend in the financial year ahead, but it is targeting the restart of payouts in the 2022 financial year.
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MARKETS
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London shares were lower on Thursday extending losses from Wednesday on the back of a sharp rise in fresh coronavirus infections in the US and elsewhere. Rightmove was the worst blue-chip performer after being hit by a broker downgrade. US stock market futures were pointed to a mixed open ahead of US GDP and jobless claims figures at 1330 BST.
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FTSE 100: down 0.1% at 6,121.13
FTSE 250: down 0.7% at 17,028.83
AIM ALL-SHARE: down 0.2% at 884.24
GBP: up at USD1.2445 (USD1.2427)
EUR: down at USD1.1228 (USD1.1263)
GOLD: down at USD1,762.00 per ounce (USD1,775.65)
OIL (Brent): down at USD40.24 a barrel (USD40.44)
(changes since previous London equities close)
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ECONOMICS AND GENERAL
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The UK government is due to publish the latest data from its coronavirus test and trace service as Prime Minister Boris Johnson continues to defend it from criticism. The Department for Health & Social Care is expected to release figures for England on Thursday the NHS Test & Trace Service between June 11 and 17, its third week of operation. It comes as Johnson insisted the system is a "cluster-busting operation" that would quickly tackle any localised Covid-19 outbreaks after he was challenged by Labour leader Keir Starmer over a discrepancy between the estimated number of coronavirus cases in the UK and those covered by test and trace. Meanwhile, Health Secretary Matt Hancock refused to give a date on when the controversial test and trace app would be made available, but said the government is "going to make it work".
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The mood among German consumers is brightening further as the country emerges from months of coronavirus lockdown, GfK said, but still has ground to make up on the pre-pandemic world. "Rapid reopening of the economy and society in Germany is helping consumers get over the corona shock more and more," GfK said, as its monthly forward-looking barometer predicted -9.6 points for July, up nine points on this month. The measure had fallen as low as -23.1 points, an all-time low, in May. Not only reopening, but "extensive aid from government stimulus programmes including reduced VAT" in the second half of the year is helping lift spirits, according to GfK expert Rolf Buerkl. In another sign of consumption picking up again, a measure of people's inclination to save fell compared with June. But GfK also warned that rising unemployment figures and the deep recession prompting fears of layoffs would likely keep the good vibes in check.
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More than 78,000 people were diagnosed with Covid-19 in the US and in Brazil alone Wednesday, as the International Monetary Fund laid out the unprecedented economic devastation caused by the global pandemic and the World Health Organisation warned the number of infections could reach 10 million worldwide within the next week. As many countries emerged from lockdown hoping to resurrect their economies, US states were reimposing virus restrictions and Brazilian experts were warning the country was sending people "to the slaughterhouse." The International Monetary Fund said that this "crisis like no other" would send the global GDP plunging by 4.9% this year and wipe out an astonishing USD12 trillion over two years. It said that many countries will face a recession more than double that which they suffered during the global financial crisis in 2008-2009.
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US President Donald Trump has said he will move some troops from Germany to Poland, as he bashed Berlin for failing to meet a NATO defence-spending target and for buying energy from Russia. "They will be paying for the sending of additional troops, and we will probably be moving them from Germany to Poland," Trump said during a joint press conference with Polish President Andrzej Duda, meaning that Warsaw would cover the cost. He said the US would be reducing its presence in Germany "very substantially," while confirming the previous new target level of 25,000 troops. Some of the troops would return to the US, while others would be redeployed, including to Poland, Trump explained. Duda said he had asked Trump not to withdraw troops from Europe altogether as the US military presence has guaranteed European security since the end of World War II.
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