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(Alliance News) - Energy provider SSE on Wednesday lifted its full-year earnings outlook amid a swing to half-year profit, but slashed its interim payout in line with a recent policy change.
In September, the power utility had forecast full-year adjusted earnings per share around 80p to 85p. However, the structure of the proposed disposal of its gas production interests is expected to add around 3p to its previous forecast, bringing this to around 83p to 88p.
Turning to the results, revenue for the half-year to September 30 fell to GBP3.05 billion from GBP3.32 billion, though SSE swung to a profit before tax of GBP128.9 million from a loss of GBP284.6 million a year ago.
The swing to profit was largely because SSE saw an exceptional gain of GBP154.6 million in the period, versus a hit of GBP565.4 million a year ago. On an adjusted basis, pretax profit rose to GBP263.4 million from GBP229.4 million.
SSE declared an interim dividend of 24.0p, down 18% from 29.3p a year ago, reflecting the dividend policy outlined in May 2018.
The stock was up 0.6% 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: down 0.5% at 7,331.12
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Hang Seng: down 2.0% at 26,529.01
Nikkei 225: closed down 0.9% at 23,319.87
DJIA: closed unchanged at 27,691.49
S&P 500: closed up 0.2% at 3,091.84
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GBP: up at USD1.2852 (USD1.2841)
EUR: flat at USD1.1009 (USD1.1011)
Gold: up at USD1,461.15 per ounce (USD1,452.00)
Oil (Brent): down at USD61.72 a barrel (USD62.25)
(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
0930 GMT UK consumer and producer price indices
0930 GMT UK house price index
1100 CET EU industrial production
0700 EST US MBA weekly mortgage applications survey
0830 EST US consumer price index
0830 EST US real earnings
1100 EST US Fed Chair Powell testifies To Joint Economic Committee on Economic Outlook
1630 EST US API weekly statistical bulletin
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The Trump administration plans to issue a deferral this week on its decision about whether the US will impose additional tariffs on imported cars, two industry sources told AFP. The delay could last up to another six months, the sources said, with the announcement expected Wednesday or later. US President Donald Trump "doesn't have to make this decision tomorrow", one of the sources said. The Trump administration has been threatening since last year to impose tariffs of perhaps 25% on auto imports to defend the US automaking sector, a symbol of American manufacturing. Trump already postponed the auto tariff decision – the threat of which has caused uncertainty in the European car industry, especially in Germany – for 180 days in May.
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Trump in a speech on Tuesday took credit for an American economic renaissance. While he said the partial trade deal he announced last month with China was "close" he warned he would jack up tariffs even further should the pact fail to materialize. "A deal could happen soon," Trump said following an address to the Economic Club of New York. "We'll only accept a deal acceptable for Americans."
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Trump faces the most perilous challenge of his three-year US presidency as public hearings convened as part of the impeachment probe against him open under the glare of television cameras on Wednesday. Democrats in the House of Representatives plan to prove over several weeks of hearings that the US leader abused his office by seeking Ukraine's help for his 2020 reelection campaign, and sought to extort his Kiev counterpart into finding dirt on Democratic rival Joe Biden.
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Boris Johnson will promise to end the "groundhoggery" of Brexit if the Conservatives win a majority at the UK general election in his first keynote speech of the campaign. The UK prime minister will pledge to drive a clean energy revolution while investing in the NHS, cutting crime and helping people with the cost of living if he succeeds on December 12. Labour, meanwhile, will vow to boost health funding by GBP26 billion if they enter government, as part of the party's "rescue plan" to improve the NHS. Meanwhile, a YouGov survey for The Times suggested Johnson had opened up a 14-point poll lead over Labour after Nigel Farage's decision to pull Brexit Party candidates from Tory-held seats.
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Final data for German's consumer price inflation rate in October was in line with prior estimates, Destatis said. Annually, Germany's consumer price index rose 1.1%, and on a monthly basis by 0.1%. These readings were both in line with the provisional figures released at the end of last month. In September, the annual inflation rate was 1.2%. Germany's harmonised index of consumer prices - calculated for the European Central Bank - grew 0.9% year-on-year and 0.1% month-on-month, again both in line with the flash estimate.
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Pro-democracy protesters stepped up Wednesday a "blossom everywhere" campaign of road blocks and vandalism across Hong Kong that has crippled the international financial hub this week and ignited some of the worst violence in five months of unrest. The new phase in the crisis, which has forced schools and shopping malls to close as well as the shutdown of large chunks of the vital train network, prompted police to warn on Tuesday the city was "on the brink of total collapse". China, facing the biggest challenge to its rule of the territory since it was handed back by the British in 1997, has insisted it will not buckle to the pressure and warned of tougher security measures. On Wednesday, commuters across many parts of the city woke to the increasingly familiar scenario of roads choked with bricks, bicycles, couches and other materials that had been laid out by the protesters overnight to block traffic.
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The decline in Japanese producer prices decelerated in October on the year prior after the month saw a significant rise on the September print. The Bank of Japan revealed the producer price index rose 1.1% in October compared to September, when prices had remained flat on the month prior. The monthly rise resulted in the prices being 0.4% lower in October than the year prior, compared to 1.1% lower reported in September. Economists had forecast October 2019 prices to be 0.3% lower than the year before.
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BROKER RATING CHANGES
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GOLDMAN RAISES INTERTEK TO 'NEUTRAL' ('SELL') - TARGET 5200 (5400) PENCE
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MORGAN STANLEY RESUMES HIKMA PHARMACEUTICALS WITH 'EQUAL-WEIGHT' - TARGET 1900 PENCE
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JEFFERIES CUTS LAND SECURITIES TO 'UNDERPERFORM' ('HOLD') - TARGET 735 PENCE
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COMPANIES - FTSE 100
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Anglo-Dutch consumer goods giant Unilever said Marijn Dekkers has decided to step down as chair with immediate effect. He has been replaced by Non-Executive Director Nils Andersen. "Marijn, who was appointed as chairman of Unilever in April 2016, has chosen to stand down as chairman so that he can focus on his growing responsibilities as founder and chairman of Novalis LifeSciences, the investment and advisory firm. He will continue to serve as a non-executive director of Unilever," the Marmite spread maker explained. Andersen has served on the Unilever board since April 2015.
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Coca-Cola HBC said it delivered a solid third quarter despite poor weather knocking industry volumes. Forex-neutral revenue grew 3.4%, or 2.3% excluding the soft-drink bottler's recent Bambi acquisition. Volumes were up 1.1% in the quarter, though down 0.1% excluding Bambi. Coca-Cola HBC bought Serbian biscuits and snacks manufacturer Bambi at the beginning of 2019. Volumes in established markets grew 1.2%, while developing markets saw a 4.0% decline. Emerging markets volumes increased 3.0%, or 0.8% when excluding Bambi. For the full-year, Coca-Cola HBC expects to deliver forex-neutral revenue growth of 4.0% to 4.5%, including a 70 basis points contribution from Bambi. Currency movements in the quarter were better than expected, with the company now expecting a EUR15 million hit for the full-year, and improvement of EUR5 million compared to prior guidance.
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Technology firm Smiths Group said its annual expectations remain unchanged following its first quarter performance. Revenue for the three months to October 31 was up 11% on an underlying basis, reflecting good growth in John Crane, a strong performance from Smiths Detection, organic growth in Flex-Tek, and an "expected performance" at Smiths Interconnect.
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Moody's Investors Service said it is continuing to review for downgrade the long-term ratings of London Stock Exchange Group. The ratings agency initiated the review in August, following LSEG's announcement that it had agreed to acquire market data and trading technology company Refinitiv for USD27 billion. LSEG plans to issue USD13.5 billion in new debt to refinance all of Refinitiv's existing debt obligations when the acquisition closes. Moody's said its review for downgrade is focused on LSEG's plans for the acquisition and integration of Refinitiv, including evaluating the business combination's cash flows and profitability, and the robustness of the LSEG's deleveraging plans. Looking ahead, Moody's said the most likely outcome of its review would be a one-notch downgrade of LSEG's long-term ratings to Baa1 from A3.
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COMPANIES - FTSE 250
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Pub operator JD Wetherspoon said like-for-like sales were up 5.3% in the 13 weeks to October 27, or its first quarter, with total sales up 5.6%. The company has opened one pub since the start of the financial year, and closed four. It intends to open between 10 to 15 pubs in the current financial year. Chair Tim Martin said Wetherspoon continues to anticipate trading in line with previous expectations for the financial year.
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COMPANIES - INTERNATIONAL
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Orders and deliveries of new Boeing planes remain depressed eight months into the grounding of the company's 737 Max. Boeing said that an aircraft-leasing company replaced an order for 15 Max jets with an order of five 787s, a larger plane used mostly on international routes. Another customer dropped an order for three Max planes after ordering a larger Boeing 777 earlier this year. Chicago-based Boeing said it took 10 new orders in October, down from 24 in the same month last year, which included 14 Max jets.
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Wednesday's Shareholder Meetings
Hays
Smiths Group
Abcam
Premier Asset Management
Henderson Eurotrust
Mediazest
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By Tom Waite; thomaslwaite@alliancenews.com
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