(Alliance News) - Gaming company GVC Holdings said Tuesday it was surprised by HM Revenue & Customs' decision to extend its investigation into the gaming company's former Turkish-facing online gambling business.
The Ladbrokes owner disposed of its Turkish business in December 2017.
When first informed of the probe by the UK tax collector in November 2019, GVC said it understood the investigation was aimed at former third-party suppliers and related to the processing of payments for online gambling in Turkey.
GVC said that UK tax collector HMRC on Monday informed subsidiary GVC Holdings (UK) Ltd that it was widening the scope of its investigation and is now examining "potential corporate offending" by an entity within GVC, which HMRC has not yet identified.
"Both the [UK] company and GVC are surprised by the decision to extend the investigation in this way and are disappointed by the lack of clarity provided by HMRC as to the scope of its investigation. HMRC has not yet provided details of the nature of the historic conduct it is investigating, with the exception of a reference to section 7 Bribery Act 2010, nor has it clarified which part of the GVC group is under investigation. In the meantime, the company continues to co-operate fully with HMRC regarding the provision of information," GVC said.
GVC shares were down 9.1% early 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 0.6% at 6,295.92
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Hang Seng: up 1.9% at 25,541.86
Nikkei 225: closed up 0.7% at 22,884.22
DJIA: closed up 8.92 points at 26,680.87
S&P 500: closed up 0.8% at 3,251.84
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GBP: up at USD1.2686 (USD1.2644)
EUR: unchanged at USD1.1441
Gold: up at USD1,820.64 per ounce (USD1,816.37)
Oil (Brent): firm at USD43.46 a barrel (USD43.00)
(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
0855 EDT US Johnson Redbook retail sales index
1630 EDT US API weekly statistical bulletin
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UK Prime Minister Boris Johnson will assemble his Cabinet in person for the first time in four months on Tuesday as the government presses ahead with plans to secure millions of doses of a potential Covid-19 vaccine, PA reports. Senior ministers will meet in the Foreign & Commonwealth Office rather than the smaller Cabinet room in Downing Street to allow for proper social distancing. It comes after a study suggested a Covid-19 vaccine being developed by the University of Oxford was safe and induces an immune reaction, which was branded "encouraging" by the scientific community. Deputy Chief Medical Officer Professor Jonathan Van-Tam responded in The Sun, saying he was "cautiously optimistic that by late next spring there will be several vaccines that will have made it. And my confidence is increasing."
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Japan's consumer price inflation remained at a three-year low in June, as the pandemic continued to hamper consumption, Statistics Bureau of Japan said. Annual inflation was 0.1% in June, the same rate seen in the prior month, held back by an 11% percent fall in the price of education products. Annual core inflation, which excludes fresh foods and is the figure used by the Bank of Japan, was flat in June following a decrease of 0.2% in May. The central bank expects deflation ahead in Japan, saying consumer prices will fall 0.5% for the current financial year through March 2021, compared with a decline of between 0.3% and 0.7% estimated in April, according its economic outlook published on Wednesday last week.
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BROKER RATING CHANGES
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JPMORGAN MOVES 'LONGSTANDING UK UNDERWEIGHT' TO 'NEUTRAL' - JAPAN DOWN TO 'NEUTRAL'
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BARCLAYS RAISES BABCOCK INTERNATIONAL TO 'OVERWEIGHT' ('EQUAL WEIGHT') TARGET 347 (419) PENCE
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PEEL HUNT RAISES PREMIER OIL TO 'BUY' ('HOLD') - TARGET 50 (35) PENCE
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COMPANIES - FTSE 100
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BHP Group said annual petroleum production was marginally short of guidance, with lower gas demand due to Covid-19, but it met its targets for iron ore and metallurgical coal among others. As the company had to temporarily suspend operations at Antamina and Cerrejon during the year, production for both was below guidance although the two operations are now ramping back up. Petroleum production for its financial year ended June 30 was 109 million barrels of oil equivalent, a 10% drop from 2019. Guidance was for the bottom end of between 110 million and 116 million barrels of oil equivalent. Copper production was 2% ahead of 2019, at 1.7 million tonnes. The company placed its copper production guidance under review in April but managed to meet the pre-review level of between 1.7 million and 1.8 million tonnes. Iron ore production was 248 million tonnes, up 4% from 2019 and within the target range of between 242 million and 253 million tonnes. Metallurgical coal production was down 3% year-on-year but just met the target of between 42 million and 45 million tonnes. Energy coal production fell 16% from 2019 to 23 million tonnes. Nickel production was down 8% at 80,000 tonnes.
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COMPANIES - FTSE 250
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Home phone and broadband provider TalkTalk Telecom said revenue fell in the first quarter partly due to the Covid-19 crisis. TalkTalk said its financial first quarter saw stable growth, strong cash conversion, and reduction in net debt. For the three months ended June 30, headline off-net revenue was GBP358 million, down 7.5% from GBP387 million in the first quarter of financial 2020. The company explained the decline was mainly due to Covid-19 disruption, including trading restrictions and cancellation of live sports, as well as ongoing industry-wide declines in Voice usage exacerbated by the lockdown. TalkTalk said the revenue, and consequently margin, decline was offset by cost savings, with all key cost areas significantly lower year on year. Trading has recovered in June and July, with an improvement in average revenue per user, and TalkTalk thinks this improvement will continue through the rest of its financial year, driven by fibre and ethernet products. The company added that the expected GBP15 million hit from Covid-19 "remains conservative" based on current bad debt trends in both its Consumer and B2B markets.
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Business events and publishing firm Euromoney Institutional Investor said it is hopeful of resuming dividend payments. Euromoney said trading in the period since its half-year results has been in line with recent trends, and it is hopeful of resuming dividend payments. Euromoney said it has "made excellent progress" in controlling costs, including reducing the committed costs that relate to previously announced cancelled and postponed events due to Covid-19. Revenue for the nine months ended June 30, was GBP255.4 million, down 14% from GBP295.8 million a year before. The company attributed the drop in revenue to events cancelled and postponed as a result of Covid-19. Euromoney added that its financial position remains strong. Net cash at the end of June 2020 increased to GBP13.9 million.
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COMPANIES - GLOBAL
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Novartis posted slightly higher first-half income despite a weaker second quarter caused by the Covid-19 pandemic. The Swiss drug maker reported net income of USD4.04 billion for the six months ended June 30, up 1.5% from USD3.98 billion a year before. This was despite a virus-hit second quarter, when net income dropped 11% to USD1.87 billion from USD2.11 billion, due to the pandemic. Interim net sales increased by 3.3% to USD23.63 billion from USD22.87 billion despite a 3.5% second quarter net sales drop to USD11.35 billion from USD11.76 billion. For the year ahead, and barring unforeseen events, Novartis is expecting net sales growth of a mid single-digit percentage pace at constant currency. Divisionally speaking, Innovative Medicines is forecast to grow by a mid single-digit and Sandoz by a low single-digit. Annual core operating income is expected to grow by a low double-digit at constant currency.
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Tuesday's Shareholder Meetings
Audioboom Group PLC - AGM
Seneca Global Income & Growth Trust PLC - AGM
TalkTalk Telecom Group PLC - AGM
Bloomsbury Publishing PLC - AGM
AVEVA Group PLC - AGM
Ted Baker PLC - AGM
Reach4Entertainment Enterprises PLC - AGM
Intermediate Capital Group PLC - AGM
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By Tom Waite; thomaslwaite@alliancenews.com
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