LONDON (Alliance News) - The following is a summary of top news stories Wednesday.
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COMPANIES
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Ashtead Group said its pretax profit and revenue both surged higher in the first quarter of its financial year and said its full-year results look set to meet its expectations, sending its shares higher. The FTSE 100 company said pretax profit rose 23% in the quarter to the end of July to GBP155.4 million from GBP117.5 million a year earlier, as its revenue rose to GBP618.6 million from GBP457.9 million, driven by a rise in rental revenue to GBP539.6 million from GBP417.7 million. The revenue growth was driven by strong trading in both Ashtead's US-based Sunbelt rentals arm and in its UK-based A-Plant business, with broad-based growth in both businesses. The company said it was particularly encouraging that its seasonal improvement in demand was strong, which helped its fleet utilisation growth in the quarter, following a spring hit by adverse weather conditions.
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A bidding group led by private equity house MBK Partners is close to agreeing a deal to acquire Tesco's South Korean business for around USD6.0 billion including debt, Bloomberg reported on Wednesday, citing people with knowledge of the matter. The MBK-led group, which also includes South Korea's National Pension Service, is understood to have moved into exclusive negotiations with the retailer on Wednesday morning to acquire the Homeplus business, Bloomberg said.
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Engineering company Weir Group is likely to drop out of the FTSE 100 after a continued decline in its share price since June, mostly due to weak demand in oil and gas markets, while housebuilder Berkeley is set to join the blue-chip index after a strong run in its shares that started with the Conservative Party's majority victory in the UK's General Election in May. Also joining the FTSE 100 is expected to be lender Provident Financial, while engineering company Meggitt is expected to drop out. The index changes will be issued after market close Wednesday, based on closing prices from Tuesday. The changes come into effect from the start of trading on Monday, 21 September.
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Car and bicycle parts retailer Halfords Group said its cycling sales have declined so far in the second quarter and will be below expectations for the period, though trading elsewhere in the business remains robust. Halfords said its cycling sales in the eight weeks from July 4 to August 28 were down 11% on a like-for-like basis against tough comparatives and will now be below its expectations for the second quarter. Trading elsewhere in the business was robust in the eight-week period, with like-for-like retail sales down 1.3% overall, due to the cycling decline, but like-for-like sales rising in its car maintenance, car enhancement and travel solutions divisions. The company still expects its full-year pretax profit to be in line with market consensus and said its retail gross margin should be at the high end of guidance.
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Temporary power company Aggreko said it has struck a deal to acquire the majority of the assets owned by Canada's ICS Group for CAD37.0 million. Aggreko said the acquisition of the company, which provides mobile temperature control services in the Canadian market, will give it a presence in the North American heater market and will expand its operations into new North American locations.
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Technical products and services company Diploma said its revenue growth in the first nine months was held back by the slowdown in the oil and gas industry and sluggish European industrial markets and said its underlying operating margin will take a hit. The company said its revenue for the nine months to the end of September is expected to rise by around 9.0%, driven primarily by acquisitions but offset slightly by translational currency effects. But the group said the issues it has faced so far in its current financial year have continued to be an issue and said its underlying revenue growth, stripping out acquisitions and currency effects, will be around 1.0%.
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Online fashion retailer ASOS confirmed press reports that its chief executive and co-founder, Nick Robertson, is to step down after 15 years in the role with immediate effect. His departure had been well-flagged prior to the confirmation, with Sky News reporting he would leave on Tuesday evening and other outlets following suit later. Robertson will be replaced by Nick Beighton, who joined the company in April 2009 as chief financial officer and who was last October promoted to the role of chief operating officer. Prior to joining ASOS, Beighton was the finance director at Luminar, the nightclub operator, and is the former head of finance at fashion and homeware retailer Matalan.
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Irish low-cost airline Ryanair Holdings said its customer traffic and load factor both improved in August as it announced the summer 2016 schedule for its flights from London's airports. The company said it carried 10.4 million passengers in August, up 10% from the 9.4 million it carried a year earlier, while its load factor increased by 2 percentage points to 95% from 93%.
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MARKETS
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UK indices are mixed with Ashtead Group one of the best performers in the FTSE 100. Asian stocks closed lower ahead of a long weekend in China to celebrate the 70th anniversary of WWII Victory Day. Shanghai is closed Thursday and Friday, while Hong Kong is closed Thursday only.
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FTSE 100: up 0.3% at 6,076.54
FTSE 250: up 0.1% at 16,854.25
AIM ALL-SHARE: flat at 730.43
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GBP: down at USD1.5275
EUR: down at USD1.1265
GOLD: flat at USD1139.40 per ounce
OIL (Brent): up at USD48.98 a barrel
(changes since end of previous GMT day)
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ECONOMICS AND GENERAL
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British construction activity growth improved by less-than-expected in August, survey results from the Chartered Institute of Procurement and Supply and Markit Economics revealed. The seasonally adjusted Markit/CIPS UK Construction Purchasing Managers' Index rose to 57.3 from 57.1 in July. Economists had forecast a higher score of 57.5.
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Eurozone's producer prices declined at a stable rate in July, in line with expectations, figures from Eurostat showed. The producer price index fell 2.1% year-over-year in July, the same rate of decrease as in the previous month, revised from the 2.2% drop reported earlier. The annual decline in July was largely caused by a 6.5% sharp decrease in energy prices. Excluding energy, producer prices dropped at a stable pace of 0.4% in June from a year ago.
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Boston Federal Reserve President Eric Rosengren has said slowing overseas economies, stock market volatility and falling commodity prices may have an impact on US growth, making the case for more modest monetary policy tightening, the Financial Times reported. Speaking in a speech in New York, Rosengren, a dovish member of the US Federal Reserve's rate-setting Federal Open Market Committee, said the slowdown in overseas economies may prompt him to cut his growth outlook in the central bank's next forecasting round and dent his confidence that inflation will accelerate. The FT noted Rosengren made no explicit comment on when he thought short-term US interest rates should start rising, but said that he did not believe moving the timing forward or back a couple of months would make a big economic difference.
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US President Barack Obama toured an Alaska glacier that he said illustrated the dangers of climate change. Obama noted that the Exit Glacier near Seward has receded every year as the climate warms and that the process has been accelerating, noting that it "sends a message". Obama will cross the Arctic Circle Wednesday, becoming the first sitting US president to do so.
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By Arvind Bhunjun; arvindbhunjun@alliancenews.com; @ArvindBhunjun
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