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(Alliance News) - UK housebuilder Crest Nicholson on Tuesday expressed disappointment as it reported a fall in annual earnings.
For the year ended October 31, pretax profit slumped 39% to GBP102.7 million from GBP168.7 million in financial 2018, and revenue slipped 3% to GBP1.08 billion from GBP1.12 billion.
Crest maintained its full year dividend at 33.0 pence. It said it would pay 33.0p again in financial 2020 and then raise its payout in line with UK inflation thereafter.
Crest said it remains confident in its ability to deliver on previous guidance and re-iterated expectations for financial 2020 adjusted pretax profit in a range of GBP110 million to GBP120 million. Adjusted pretax profit in financial 2019 was GBP121.1 million.
"We believe the decisive political outcome should provide support for the sector in the near term. While it is too early to form a view on the impact for 2020 trading we are seeing some encouraging signs. Footfall and visitor numbers on our developments have increased and traffic on our website is up," said Chief Executive Officer Peter Truscott.
Crest Nicholson shares were up 0.6% in early trade Tuesday.
Here is what you need to know at the London market open:
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MARKETS
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FTSE 100: up 0.3% at 7,435.35
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Hang Seng: Hong Kong market closed for holiday.
Nikkei 225: closed down 0.6% at 23,215.71
DJIA: closed down 453.93 points, 1.6%, at 28,535.80
S&P 500: closed down 1.6% at 3,243.63
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GBP: down at USD1.3025 (USD1.3056)
EUR: flat at USD1.1015 (USD1.1020)
Gold: down at USD1,578.23 per ounce (USD1,582.00)
Oil (Brent): up at USD59.26 a barrel (USD58.90)
(changes since previous London equities close)
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ECONOMICS AND GENERAL
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Tuesday's Key Economic Events still to come
Chinese New Year public holiday continues. Financial markets closed in Hong Kong and Shanghai.
US two-day Federal Open Market Committee meeting starts.
0930 GMT UK capital issuance
1100 GMT UK CBI distributive trades survey
1100 GMT Ireland retail sales index
0830 EST US advance report on durable goods
1000 EST US Richmond Fed business activity survey
1000 EST US consumer confidence index
1630 EST US API weekly statistical bulletin
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A Brexit trade row is brewing as Britain is only days away from its EU exit. The Times newspaper reports that Brussels will attempt to gain the upper hand before trade talks start late next month by insisting European judges continue to hold sway in Britain after Brexit. The UK will leave the EU on Friday, with the country entering a transition period where relations with the bloc will largely stay the same while negotiators look to thrash out a trade deal before the end of the year. According to the Times, a leaked diplomatic document suggests the EU is preparing to demand that the European Court of Justice is able to enforce rules on trade, fishing and security even after Britain is classified as a third country. A document seen by the paper reportedly states that having a defined role for the Luxembourg court, which adjudicates on EU laws, would "ensure consistent interpretation of the agreement" between the UK and EU.
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UK Prime Minister Boris Johnson is expected to make a decision on whether to allow Huawei to play a major role in Britain's 5G network amid concerns from the US. The Prime Minister is due to chair a meeting of the National Security Council on Tuesday as he mulls over whether to grant permission for the Chinese technology giant to have involvement in the roll-out of the country's communications upgrade. A decision on Huawei is due by the end of the week. The implementation of 5G is expected to bring with it download speeds 10 times faster than what 4G currently offers. The impending decision has caused trans-Atlantic tension, after the White House warned Mr Johnson away from adopting Huawei due to security fears.
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Cinemas empty, high-speed train trips cancelled, tourist sites closed, an entire province shut down: The extraordinary measures taken by China to contain a deadly coronavirus threaten to dent an already fragile economy. With the world's number-two economy increasingly reliant on its consumers to drive growth, the virus has struck at the worst possible time with hundreds of millions of people fanned out across the country for the Lunar New Year holiday. Gross domestic product expanded last year, its slowest pace in three decades, hit by weak domestic demand and the trade war with the US. Still, figures in the final three months pointed to some stability and the recently signed trade pact with the US had provided further hope. But Julian Evans-Pritchard of Capital Economics said there wasn't "any doubt" the coronavirus outbreak – which has killed more than 100 people – would deliver a fresh blow, warning that transport and broader consumption would be hit, including dining and retail. The holiday has been extended by three days, meaning the country may slowly get back to business only from Monday. Some companies told employees to work from home or stay away, including tech giant Tencent, which told staff to work at home until February 10.
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BROKER RATING CHANGES
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JPMORGAN CUTS DIAGEO TO 'UNDERWEIGHT' (NEUTRAL) - PRICE TARGET 2800 (3200) PENCE
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BARCLAYS RAISES BAE SYSTEMS TO 'OVERWEIGHT' ('EQUAL WEIGHT') - TARGET 760 (550) PENCE
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DEUTSCHE BANK RAISES RYANAIR PRICE TARGET TO 18 (16.5) EUR - 'BUY'
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COMPANIES - FTSE 100
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Online takeaway platform Just Eat said 2019 ended in line with the company's expectations, and it expects to report underlying earnings before interest, tax, deprecation and amortisation of around GBP200 million. It also expects group orders of 254 million and revenue of about GBP1.0 billion. UK order growth in 2019 came in at 8%. The UK competition regulator on Friday stepped into the acquisition of Just Eat by Takeaway.com, saying it would look into whether the combination would lessen competition in the UK takeaway platform sector.
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COMPANIES - FTSE 250
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McCarthy & Stone said it delivered annual results in line with expectations against the backdrop of a "challenging market and strategic structural changes". It added that it is making "significant progress" in both stages of transformation strategy launched in September 2018 and has a more "resilient business model". For the year ended October 31, pretax profit was down 25% to GBP43.4 million from GBP58.1 million in financial 2018, but revenue rose 8% to GBP725.0 million from GBP671.6 million. The company attributed the fall in profit to exceptional costs incurred during the period, representing cost of land that will no longer be developed. The housebuilder, which develops and manages retirement communities, kept its total dividend unchanged at 5.4p.
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Personal products maker PZ Cussons said it was making progress in its new strategy against challenging market conditions. PZ Cusssons said the strategy review - announced in July 2019 - has delivered initial progress, with two disposals, stable revenue in Focus Brands, and action to reduce overhead costs. For the half year to November 30, pretax profit was up 35% to GBP34.7 million from GBP25.8 million last year, but adjusted pretax profit was down 12% to GBP28.0 million. The company attributed the rise in statutory profit to the sale of its Greek business. Revenue slipped 3.1% to GBP293.3 million from GBP302.8 million last year. PZ Cussons kept its interim dividend steady at 2.67p per share. In terms of outlook, PZ Cussons said it expects a stronger second-half pretax profit performance, should there be no further worsening of the economic and trading environments across its key geographies.
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COMPANIES - INTERNATIONAL
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Airbus confirmed it has reached agreement in principle with regulators in France, the UK and the US. "These agreements are made in in the context of investigations into allegations of bribery and corruption as well as compliance with the US International Traffic in Arms Regulations," Airbus said. Airbus said it did not disclose any details of its discussions with investigative authorities for legal reasons. The Financial Times had reported that Airbus was on the brink of settling a bribery and corruption probe with regulators in the UK, France and the US, in a move that could see the aerospace group pay billions of dollars in penalties. FT had said analysts forecast fines of more than EUR3.0 billion.
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German business management software giant SAP reported a rise in annual revenue, but profit fell due to acquisition costs and a restructuring. SAP posted revenue growth of 12% for 2019, reaching EUR27.55 billion, but pretax profit declined by 18% to EUR4.62 billion. The Walldorf-based firm's cloud revenue rose 39% to EUR6.93 billion for 2019, with software licences & support rising 3% to EUR16.08 billion and services by 11% to EUR4.53 billion. SAP met all profit and revenue targets, it said, and reported "remarkable" revenue growth across all regions. Likewise, gross margins rose across all business segments.
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Tuesday's Shareholder Meetings
Euromoney Institutional Investor
Wey Education
Greencore Group
Schroder UK Mid Cap Fund
Lowland Investment
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By Tom Waite; thomaslwaite@alliancenews.com
Copyright 2020 Alliance News Limited. All Rights Reserved.
