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(Correcting currency conversion in Toyota item is USD.)
(Alliance News) - Legal & General on Wednesday revealed earnings "well above" pre-virus levels in a strong first half.
The 185-year old insurer posted operating profit of GBP1.08 billion for the first half of 2021, up 14% on a year ago, and earnings per share of 17.78p, up sharply on the 4.89p achieved a year ago and 21% higher than 2019.
"We remain confident in achieving our five-year cumulative financial ambitions. In the first half of 2021, we continued to build on the good start we made in 2020. We expect to deliver double-digit growth in operating profit at the full year," the company said.
L&G lifted its interim payout by 5% to 5.18p.
Shore Capital said L&G's operating profit before tax was 8% ahead of market expectations and the interim dividend also slightly ahead of expectations.
L&G shares were up 1.9% early Wednesday.
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 7,129.43
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Hang Seng: up 0.7% at 26,372.80
Nikkei 225: closed down 0.2% at 27,584.08
DJIA: closed up 278.24 points, or 0.8%, at 35,116.40
S&P 500: closed up 35.99 points, or 0.8%, at 4,423.15
Nasdaq Composite: closed up 80.23 points, or 0.6%, at 14,761.30
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EUR: up at USD1.1872 (USD1.1860)
GBP: up at USD1.3941 (USD1.3895)
USD: up at JPY109.11 (JPY109.02)
Gold: up at USD1,813.90 per ounce (USD1,809.00)
Oil (Brent): up at USD72.41 a barrel (USD71.83)
(changes since previous London equities close)
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ECONOMICS AND GENERAL
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Wednesday's Key Economic Events still to come
0955 CEST Germany services purchasing managers' index
1000 CEST EU eurozone services PMI
1100 CEST EU retail trade
0930 BST UK services PMI
0815 EDT US ADP national employment report
0945 EDT US services PMI
1000 EDT US ISM services PMI
1030 EDT US EIA weekly petroleum status report
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The Chinese service sector rebounded in July, as containment of Covid-19 domestically and firmer market conditions helped to boost customer numbers and demand, survey results from IHS Markit showed. The Caixin headline seasonally adjusted services purchasing managers' index came in at 54.9 points in July, rebounding from June's 14-month low of 50.3.
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Business activity in Japan contracted at a quicker rate in July, according to IHS Markit. The seasonally adjusted Japan services PMI dipped in July to 47.4 from 48.0 in June, both indicating contraction.
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BROKER RATING CHANGES
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GOLDMAN SACH REINITIATES JUST EAT TAKEAWAY.COM WITH 'BUY' - PRICE TARGET 11,100 PENCE
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BARCLAYS RESUMES CAPITA GROUP WITH 'OVERWEIGHT' - TARGET 80 PENCE
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COMPANIES - FTSE 100
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Housebuilder Taylor Wimpey raised full-year guidance as the UK property market continues to boom. Revenue for the first half of 2021 surged to GBP2.20 billion from GBP754.6 million a year ago, while the construction company swung to a pretax profit of GBP287.5 million from a loss of GBP39.8 million. It highlighted positive momentum in the half-year, with the net private sales rate improving to 0.97 per week, up from 0.70 a year ago, and the opening of 37 new outlets in the period. "The UK housing market has continued to perform strongly across all our geographies in the first half of the year. Having entered 2021 with an excellent order book, we have delivered a strong first half performance, benefiting, as anticipated, from delayed Q4 2020 completions and the continuing strength in the housing market," said Taylor Wimpey. Forward indicators remain robust, it added, and build cost and supply chain pressure is being fully offset by "healthy" house price growth. Taylor Wimpey now expects full-year operating profit to be GBP820 million, above the top end of consensus. This compares with just GBP300.3 million in 2020, and approaches the pre-pandemic level of GBP850.5 million in 2019. The company declared an interim dividend of 4.14p.
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Jet engine maker Rolls-Royce said it has agreed to sell its Bergen Engines medium-speed liquid-fuel and gas engines business to Langley Holdings for an enterprise value of EUR63 million. "Sale proceeds of EUR70m from the transaction together with EUR40m of cash currently held within Bergen Engines which is to be retained by Rolls-Royce, will be used to help rebuild the Rolls-Royce balance sheet," it said. This follows an aborted deal earlier in the year after the Norwegian government put the brakes on the proposed sale of the Bergen unit to TMH Group, a privately owned company headquartered in Russia that makes locomotives and rail equipment. Rolls-Royce had planned to sell Bergen to TMH for EUR150 million. The Norwegian government blocked the sale on national security concerns, as Norway's army is among Bergen's customers. Rolls-Royce on Wednesday said it has notified the Norwegian government of the agreed sale. Bergen Engines will be operated by Langley Group as a stand-alone business.
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COMPANIES - FTSE 250
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Iron ore miner Ferrexpo declared a 39.6 US cents per share dividend, tripled from 13.2 cents a year before, as pretax profit more than doubled to USD796.9 million in the first half of 2021 from USD294.0 million a year before. Revenue climbed by 74% to USD1.35 billion from USD775.8 million a year before. This was despite a 1% decline in iron pellet production and 9% fall in sales volume, as average iron prices doubled from a year before. Chair Lucio Genovese said Ferrexpo's investment programme - capital spending rose to USD142 million from USD96 million - allowed the company to take advantage of a strong iron ore market.
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Retail tycoon Mike Ashley is set to step down as chief executive of Frasers Group, the Telegraph reported. Citing "City sources", the newspaper said the billionaire is expected to pass the baton to his prospective son-in-law, Michael Murray, who is currently the Shirebrook, Derbyshire-based company's "head of elevation". Ashley will assume the role of deputy chair. The Telegraph said the news could come alongside the firm's annual results on Thursday.
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COMPANIES - MAIN MARKET AND AIM
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Ryanair said air traffic doubled in July as travel restrictions eased. The Irish budget airline flew 9.3 million passengers in July, up sharply from 5.3 million in June and more than double the 4.4 million reported for July 2020. This was at a load factor of 80%, improved from 72% in June. Ryanair could be poised for an even better month ahead if the UK government decides to relax travel rules further on Thursday. It already has ruled out plans for an "amber watchlist" as ministers prepare to review the traffic light system. New rules allowing fully-vaccinated passengers from the US and amber-list European countries to avoid self-isolation on arrival in the UK came into force on Monday. The relaxation of rules allows passengers who have been double-jabbed with a vaccine approved by regulators in the US, the EU or Switzerland to avoid 10 days in self-isolation.
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THG, which trades as The Hut Group, confirmed a Sky News report that it is buying online retailer Cult Beauty for GBP275 million. THG also said it is trading ahead of management expectations on a constant-currency basis. It expects annual sales growth of between 35% and 38%.
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COMPANIES - GLOBAL
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Spain's top football league said it has agreed in principle to sell 10% of its business to private equity firm CVC Capital Partners for EUR2.7 billion to help finance its long-term growth plans. The deal for the ownership stake, the first of its type by a major European league, values La Liga at around EUR24.2 billion, the league said in a statement.
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Toyota Motor reported first-quarter earnings that beat pre-pandemic levels but warned of uncertainty ahead as it left its forecasts unchanged. Revenue in the first quarter of the financial year ending March 2022 surged 73% year-on-year, to JPY7.94 trillion - about USD72.79 billion - from JPY4.60 trillion. Pretax profit multiplied to JPY1.26 trillion from JPY118.23 billion, while diluted earnings per share jumped to JPY321.11 from JPY56.87. The results beat the pre-pandemic level of first quarter of financial 2020, when Toyota made JPY7.72 trillion revenue, JPY850.99 billion pretax profit and diluted earnings per share of JPY216.19.
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The US drug regulator is set to fully approve the Pfizer-BioNTech Covid-19 vaccine by early next month, the New York Times reported. The Food & Drug Administration has set an "unofficial deadline" of the September 6 Labor Day holiday "or sooner" to give the anti-Covid shot the final green light, the newspaper reported, citing sources familiar with the plan. The vaccine is currently being administered via an emergency use authorization that was granted in December. The FDA had said in a statement last week that granting the Pfizer vaccine final approval was one of the agency's highest priorities and anticipated being finished with the final review soon.
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Thales it has entered an agreement to sell its Ground Transportation Systems business to Hitachi's Rail unit for enterprise value of EUR1.66 billion. Around 8 billion passengers benefit from GTS's rail technologies every year, Thales noted, and saw its best financial performance in 7 years in the first half of 2021. The unit recorded EUR1.6 billion in revenue in 2020. "Thanks to the strong technical, geographical and commercial complementarities between Hitachi Rail and Ground Transportation Systems, the combination will create a leading rail signalling provider with a broader product offering and stronger capabilities to meet customer demand around the world," Thales said.
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Wednesday's Shareholder Meetings
Argentex Group PLC - AGM
Cadence Minerals PLC - AGM
CML Microsystems PLC - AGM
Ninety One PLC - AGM
Sequoia Economic Infrastructure Income Fund Ltd - AGM
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By Tom Waite; thomaslwaite@alliancenews.com
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