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(Alliance News) - British American Tobacco said Thursday it is looking to cut 2,300 jobs in order to create a "more efficient, agile and focused" business.
BAT said it will reduce management layers, create fewer larger more accountable business units and simplify all "key" business processes.
The programme is expected to complete by January 2020 with a loss of 2,300 jobs globally. Around 20% of senior roles will be affected, the company added.
"Since taking on the role of chief executive five months ago, I have been clear that I wanted to make BAT a stronger, simpler and faster organisation and ensure a future fit culture...A programme of this significance involves decisions that will be difficult for our people, but ultimately it is the right thing for our business," said Chief Executive Jack Bowles.
"As a result, BAT will be better placed to deliver on our target of generating GBP5 billion of revenues in New Categories by 2023/24," he added.
BAT shares were up 1.0% in early trade Thursday.
Here is what you need to know at the London market open:
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MARKETS
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FTSE 100: up 0.2% at 7,355.51
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Hang Seng: down 0.1% at 27,135.72
Nikkei 225: closed up 0.8% at 21,759.61
DJIA: closed up 227.61 points, 0.9%, at 27,137.04
S&P 500: closed up 0.7% at 3,000.93
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GBP: flat at USD1.2327 (USD1.2333)
EUR: up at USD1.1009 (USD1.0985)
Gold: up at USD1,497.20 per ounce (USD1,491.40)
Oil (Brent): down at USD61.01 a barrel (USD62.75)
(changes since previous London equities close)
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ECONOMICS AND GENERAL
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Thursday's Key Economic Events still to come
1100 BST Ireland consumer price index
1000 CEST Germany Ifo economic forecast
1100 CEST EU industrial production
0830 EDT US unemployment insurance weekly claims report - initial claims
0830 EDT US CPI
0830 EDT US real earnings
1030 EDT US EIA weekly Natural Gas Storage Report
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UK Prime Minister Boris Johnson has faced renewed pressure to recall Parliament after the prime minister was forced to reveal that a no-deal Brexit could trigger medical shortages, food price rises and major cross-channel trade delays. The opposition seized on the release of Operation Yellowhammer assessments of the impact of leaving the EU without an agreement to insist MPs return to Westminster. It comes after Scottish judges on Wednesday branded the suspension of Parliament "unlawful". While releasing analysis on impacts of no deal, the government refused to comply with a similar Commons demand to make public personal messages from special advisers regarding the controversial five week prorogation of Parliament. The move came as judgment was due on Thursday in a legal challenge that argued the government's Brexit strategy will damage the Northern Ireland peace process.
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The "seemingly never-ending Brexit saga" continues to cast a shadow over the housing market, with flat demand from buyers and sales expectations weakening, according to surveyors. Brexit uncertainty is a significant factor causing hesitation for buyers and sellers, the Royal Institution of Chartered Surveyors said. Rics said expectations for house sales deteriorated in August, with a net balance of 23% expecting sales to dip rather than increase in the next three months. It said August also saw flat demand from new buyers, after a couple of months where inquiries from potential purchasers had increased.
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US President Donald Trump said a planned tariff hike affecting USD250 billion worth of Chinese imports will be delayed "as a gesture of good will," as the world's two largest economies gear up for a fresh round of negotiations. The tariffs in question are to increase from 25% to 30% on October 15, instead of October 1 as originally planned. The move comes at the request of Chinese Vice Premier Liu He "and due to the fact that the People's Republic of China will be celebrating their 70th Anniversary on October 1", Trump tweeted. The delay also comes after China announced earlier Wednesday that it would exempt US products in 16 categories from its own tariffs in the economic superpowers' tit-for-tat trade war, which is slowing the world economy. That announcement appeared to placate Trump, who called it a "good move".
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Japan's core machinery orders dropped 6.6% in July from the previous month, marking the first decline in two months, a government report showed. The reading was better than the median forecast of a 9.9% fall by analysts surveyed by the Nikkei Business Daily, and followed a 14% increase in June.
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BROKER RATING CHANGES
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GOLDMAN CUTS LLOYDS BANKING TO 'SELL' (NEUTRAL) - PRICE TARGET 47 (61) PENCE
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JPMORGAN CUTS INTERCONTINENTAL HOTELS TO 'UNDERWEIGHT'('NEUTRAL'); TARGET 4700 (4350) PENCE
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BERENBERG INITIATES EUROMONEY WITH 'HOLD' - TARGET 1400 PENCE
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COMPANIES - FTSE 100
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Wm Morrison Supermarkets reported modest growth in like-for-like sales in the first half, though profit jumped. The grocer said like-for-like sales were up 0.2% in the half-year to August 4, versus a 4.9% rise a year ago. In the second quarter alone, like-for-like sales were down 1.9%, versus a 6.3% increase in 2018. Total revenue was up 0.4% at GBP8.83 billion, with pretax profit rising 49% to GBP202 million. Morrisons said it is "satisfied" with its like-for-like performance given tough comparisons and "largely unfavourable" summer weather this year. Looking ahead, the company said retail like-for-like sales should improve in the second half with "various" additional cost-saving opportunities. The supermarket declared a dividend of 1.93p, up 4.3%, and a special payout of 2.00p, taking the total interim dividend to 3.93p, up 2.1% year-on-year.
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Unlisted retailing peer John Lewis Partnership reported a jump in interim pretax profit to GBP191.6 million from GBP6.2 million a year before, the recent period benefiting from GBP243.9 million in exceptional items. Revenue slipped 1.4% to GBP4.79 billion from GBP4.86 billion. Ominously, John Lewis said it may not be possible to mitigate the impact of a no-deal Brexit.
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London Stock Exchange Group is likely to reject Hong Kong Exchanges & Clearing's GBP29.6 billion takeover offer, the Financial Times reported. Citing two people "close to the board", LSEG is leaning towards rebuffing the proposal, the FT said. The FT reported that one "top 10" LSEG shareholder said HKEX was "trying to diversify away from their Chinese exposure, which is why they are bidding now and not nine months ago".
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COMPANIES - FTSE 250
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Defence firm Babcock International Group said it has been selected by the UK Ministry of Defence as the preferred bidder to deliver its newest fleet of warships. The Type 31 general-purpose frigate programme will provide the UK with a fleet of five ships, at an average production cost of GBP250 million per ship. Work on the fleet will begin immediately following formal contract award later this financial year, with detailed design work to start now and manufacture commencing in 2021 and concluding in 2027.
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Self-storage provider Safestore reported "another good performance" in the third quarter. Revenue for the quarter to July 31 was up 4.9% to GBP38.2 million, up 4.4% on a like-for-like basis. "I am pleased to report another good performance in the third quarter despite annualising a strong third quarter in 2018. Our top priority remains the significant organic growth opportunity represented by the 1.4 million square feet of unlet space in our existing fully invested estate," said Chief Executive Frederic Vecchioli. He added that the company has started the fourth quarter well and is on track to meet annual expectations.
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COMPANIES - OTHER MAIN MARKET AND AIM
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Online train ticket booking platform Trainline, which will enter the FTSE 250 later this month, said revenue in its first half rose at an impressive rate and upped its annual guidance. Total revenue in the six months to August 31 was up 29% year-on-year to GBP129 million, with net ticket sales amounting to GBP1.84 billion, up 19%. The rise in ticket sales reflected "strong mobile demand", the company said. With this "strong start" to the financial year, Trainline reconfirmed its net ticket sales expectations but raised guidance for its annual revenue growth, which is now expected in the "low to mid 20% range". In its IPO prospectus, Trainline said it was targeting net ticket sales growth in the "high teens" for both the year ending February 2020 and over the medium term.
Deputy Chair Brian McBride will succeed Doug McCallum as chair of Trainline in November. McBride was chair at ASOS from 2012 to 2018, and chief executive of Amazon UK from 2006 to 2011.
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COMPANIES - INTERNATIONAL
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Anheuser-Busch InBev said it has continued to work on a potential initial public offering of its Asia-Pacific subsidiary on the Hong Kong Stock Exchange. The Euronext and Johannesburg-listed brewer said its Asia-Pacific business Budweiser Brewing Co APAC, has resumed its application for the listing of a minority stake of its shares in Hong Kong. In July, AB InBev had cancelled its earlier plan to float its business unit in Hong Kong, blaming "several factors, including the prevailing market conditions". AB InBev first filed the application in May and was aiming to raise up to USD9.8 billion in the Hong Kong listing. It would have been the largest IPO so far in 2019, bigger even than the USD8.1 billion raised by Uber Technologies in New York.
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Oracle said it expects to deliver a third consecutive year of double-digit non-GAAP earnings per share growth following improved performance in the first quarter. The computer technology company reported revenue for the three months to the end of August of USD9.22 billion, up 0.3% compared to USD9.19 billion a year earlier. On a constant-currency basis, revenue increased by 2%. Pretax income declined slightly, however, to USD2.48 billion from USD2.54 billion year-on-year, due to higher cloud services and license support costs, which grew to USD982 million from USD913 million.
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The upcoming launch of Apple's television streaming service marks a shift in the company's business plan, industry experts have said. On Tuesday, the tech giant confirmed that its Apple TV+ streaming platform, first announced in March, would launch in November. Tech experts have argued that the prominence Apple gave the announcement – at an event where the company revealed its latest iPhone handsets – indicated a changing approach to how the firm is looking to appeal to potential customers.
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Thursday's Shareholder Meetings
WH Ireland
AEW UK REIT
XPS Pensions Group
Scancell Holdings
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