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(Alliance News) - The following is a summary of top news stories Tuesday.
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COMPANIES
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Consumer healthcare firm Haleon, in its first earnings report since being split from pharmaceutical maker GSK and separately listed, reported a strong performance in the first half of 2022, noting double-digit revenue growth during the period. For the six months that ended on June 30, Haleon reported a pretax profit of GBP864 million, up 17% from GBP736 million a year ago, as operating profit increased by 22% to GBP900 million from GBP737 million. Revenue grew 13% to GBP5.19 billion from GBP4.58 billion. In Oral Health, Haleon said revenue grew 5.1% to GBP1.44 billion from GBP1.36 billion a year earlier, maintaining its "track record of market outperformance". Whilst noting current macro-economic challenges and uncertainties, Haleon said the positive momentum seen in the first half has continued into the second half of the year. Haleon said it is confident it is well positioned to deliver on guidance this year. Full-year revenue growth is expected between 6% and 8%.
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AstraZeneca said Evusheld has been approved for use in the EU as a treatment for Covid-19. The approval was based on results from the Tackle Phase III Covid-19 treatment trial. This trial showed one intramuscular dose of Evusheld provided "significant" protection against progression to severe Covid-19 or death compared to placebo. Evusheld previously was granted marketing authorisation in the EU for prevention of Covid-19 and is already available in a majority of countries in Europe.
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Henkel raised its organic sales outlook for 2022, based on a strong performance seen from the group's Adhesive Technologies business and its plans for a new Consumer Brands unit. For the year, the Dusseldorf, Germany-based chemical and consumer goods firm said it expects organic sales growth to come between 5.5% and 7.5%, compared to prior guidance of a 4.5% to 6.5% increase. Meanwhile, the adjusted return on sales guidance remains unchanged at between 9.0% and 11%. Henkel noted the strong performance from Adhesive Technologies over the third quarter of 2022, which led to an increase in guidance for organic sales growth at between 10% and 12% from between 8.0% and 10%. Henkel said it is continuing to move ahead with the formation of a new Consumer Brands business unit, through the merger of Henkel's Laundry & Home Care and Beauty Care units.
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Frasers Group said Founder Mike Ashley will step down from the board, as his son-in-law Michael Murray takes over. Ashley founded the Shirebrook, England-based retail group as 'Mike Ashley Sports' in 1982, evolving into Sports Direct. It now owns many other retail brands including House of Fraser. Ashley holds a 69% stake in the company. In May, Ashley stepped down as chief executive officer, paving the way for son-in-law Murray to become the company's new boss. Previously, Murray was head of 'elevation', meaning upgrading stores. On Tuesday, Frasers said that Ashley will not seek re-election as director at the company's annual general meeting on October 19. It explained that Ashley will continue to be available in an advisory capacity and will inject the company with an additional GBP100 million of funding. This will be on the same terms as its existing unsecured borrowing facilities.
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DIY retailer Kingfisher said it delivered a first-half performance in line with expectations, while facing strong comparatives from the prior year as well as a more challenging environment. Sales in the six months that ended July 31 totalled GBP6.81 billion, down 4.1% from GBP7.10 million a year previous. Pretax profit totalled GBP474 million, down 30% against GBP677 million. Kingfisher said it had seen an "encouraging" start to trading in the second half of the year. It declared an unchanged interim dividend of 3.80 pence per share.
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Ford affirmed annual guidance but warned on its third-quarter outturn as it grapples with part availability worries. The Detroit-based carmaker said a higher number of vehicles than expected are on the production line awaiting needed parts. It means some deliveries initially planned for the third quarter will only be made in the fourth. The company said "inflation-related supplier costs" will be USD1.0 billion higher than expected in the third quarter.
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Chinese electric vehicle manufacturer Zhejiang Leapmotor Technology is hoping to raise more than USD1 billion with an initial public offering in what would be the largest debut so far this year for Hong Kong. The Hangzhou-headquartered company is offering around 131 million shares priced at HKD48 to HKD62, about USD6.10 to USD7.90, according to a prospectus filed with the Hong Kong stock exchange on Tuesday. The listing will be a test of investor appetite in China's EV sector, which has shown huge growth in recent years.
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German car rental firm Sixt pledged that at least 70% of its fleet would be made up of hybrid or electric cars by 2030. The proportion of hybrid and electric vehicles in Sixt's global fleet stood at just 10% midway through the year, making the target an ambitious one, though the company said it expected that proportion to rise to between 12% to 15% by the end of 2023. In addition, Sixt plans to make it possible for customers to charge rental cars using German public charging stations during the course of the coming year.
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MARKETS
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Asian stocks rose on Tuesday but European prices were heading lower, as were Wall Street index futures. Bucking the trend in London, Haleon shares were up 2.1%. Japan and Germany provided further indications of rising global inflationary pressure early in a week that will be dominated by central bank decisions. The US Federal Open Market Committee meeting begins on Tuesday, with an interest rate announcement due on Wednesday. This will be followed by policy decisions from the Bank of Japan, Bank of England and Swiss National Bank on Thursday. On Friday, the UK chancellor will set out his mini-budget, as Parliament gets back to work following the funeral on Monday of Queen Elizabeth II.
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CAC 40: down 0.6% at 6,027.57
DAX 40: down 0.5% at 12,739.63
FTSE 100: marginally higher, up 2.36 points at 7,239.04
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Hang Seng: closed up 1.2% at 18,781.42
Nikkei 225: closed up 0.4% at 27,688.42
S&P/ASX 200: closed up 1.3% at 6,806.40
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DJIA: called down 0.3%
S&P 500: called down 0.4%
Nasdaq Composite: called down 0.5%
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EUR: down at USD1.0006 (USD1.0025)
GBP: unchanged at USD1.1429 (USD1.1431)
USD: up at JPY143.68 (JPY142.93)
Gold: down at USD1,668.77 per ounce (USD1,677.01)
Oil (Brent): firm at USD92.64 a barrel (USD92.24)
(currency and commodities changes since previous London equities close)
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ECONOMICS AND GENERAL
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The euro area current account swung to a deficit in July, figures from the European Central Bank showed. The eurozone posts an EUR20 billion deficit in July, compared to an EUR4 billion surplus in the previous month, with deficits recorded for goods and secondary income. For the 12 months ended July, the surplus amounted to EUR63 billion, down sharply from EUR370 billion the year prior.
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Producer price inflation in Germany accelerated to another record high in August, data from the Federal Statistics Office showed. In August, the producer price index increased by 45.8% compared to the same month a year prior, compared to a 37.2% increase in July, and well above consensus market expectations of a 37.5% hike, according to FXStreet. On a monthly basis, the producer price index rose by 7.9% in August from July, also a record and compared to a 5.3% rise in July from June. The acceleration was due to energy prices, which more than doubled as a result of strong rises electricity and natural gas prices.
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The consumer price index in Japan hit 2.8% in August, the highest level since 2014, government data showed Tuesday, as soaring energy prices bite. The last time such figures were seen, prices had been artificially bolstered by an increase in VAT. Excluding years when tax hikes impacted the rate, August's inflation was the fastest pace in nearly 31 years. Data from the internal affairs ministry showed electricity, gas and petrol were among the key contributors to rising prices. The figure for August was slightly above the 2.7% consensus forecast according to FXStreet, and comes on the heels of a 2.4% rise in July. It comes ahead of this week's meeting of the Bank of Japan, which has bucked the trend of peers elsewhere and stuck with its ultra-loose monetary policy.
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The People's Bank of China kept its key interest rate unchanged, with the one-year loan prime rate at 3.65%, while the five-year rate remained at 4.3%. The central bank had cut the one-year rate in August from 3.7%, while the five-year rate was reduced from 4.45%.
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Minutes from the Reserve Bank of Australia's latest meeting showed that the central bank expects to implement more interest rate hikes as inflation continues to accelerate, but remains mindful of the "risks to growth and employment". Earlier in September, the central bank raised interest rates by half a percentage point to 2.35% from 1.85% previously, its fourth consecutive 50 basis point rate hike. "The size and timing of future interest rate increases will continue to be guided by the incoming data and the board's assessment of the outlook for inflation and the labour market, including the risks to the outlook. All else equal, members saw the case for a slower pace of increase in interest rates as becoming stronger as the level of the cash rate rises," the RBA stated.
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UK Prime Minister Liz Truss is committing to spend at least GBP2.3 billion next year on military aid to help Ukraine fend off Vladimir Putin's invasion. Truss pledged the UK will match or exceed the record support given to Volodymyr Zelensky's "inspirational" troops. Truss announced the support as she prepared to fly to New York, where she will use a United Nations summit in the US to rally support in helping Ukraine fight Russia. She will also try to rally world leaders to end energy dependence on Putin's gas as he turns the taps off on the Nord Stream 2 pipeline.
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Truss has conceded that negotiations for a post-Brexit free trade deal with the US will not restart for years as she flew to New York ahead of a meeting with Joe Biden. The UK prime minister stressed her trade priority is striking agreements with India and the Gulf states, and joining a trade pact with nations including Australia and Japan. But she heavily downplayed the chances of talks even resuming to get the comprehensive deal with the States that was billed by Brexit backers as a major benefit of leaving the EU during the referendum.
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By Tom Waite; thomaslwaite@alliancenews.com
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