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(Alliance News) - Great Portland Estates on Wednesday maintain its interim dividend, even as it followed Landsec in revealing the extent of the damage caused by Covid-19 to the central London commercial property market.
Great Portland swung to a pretax loss of GBP154.8 million in the half year to September 30 from a profit of GBP44.4 million a year before, as revenue fell to GBP38.7 million from GBP54.4 million and net asset value per share dropped to 800 pence from 868p.
The company said its portfolio valuation was reduced by 6.6% to GBP2.5 billion, including a 2.4% decline for office properties and more stomach turning 18% drop for retail ones.
"It is clear that the impact of the COVID crisis will persist for longer than we had hoped, and we are engaging extensively with our occupiers and communities, providing assistance where it is most needed," said Chief Executive Toby Courtauld. "With unemployment rising, albeit from a low level, we should expect rents and capital values in London to fall further."
The interim dividend was held at 4.7p per share.
The stock was down 1.7% early Wednesday. It is down 20% so far in 2020.
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 6,316.25
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Hang Seng: udown 0.4% at 26,196.89
Nikkei 225: closed up 1.8% at 25,349.60
DJIA: closed up 262.95 points, 0.9%, at 29,420.92
S&P 500: closed down 0.1% at 3,545.53
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GBP: up at USD1.3284 (USD1.3224)
EUR: flat at USD1.1822 (USD1.1817)
Gold: down at USD1,878.21 per ounce (USD1,882.66)
Oil (Brent): up at USD44.50 a barrel (USD43.08)
(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
EU ECB forum on central banking opens
0700 EST US MBA weekly mortgage applications survey
1630 EST US API weekly statistical bulletin
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People travelling to Ireland from "red" listed regions will no longer have to restrict their movements once they receive a negative Covid-19 test after arriving in the country. The test must be taken five days after arrival in Ireland. The new travel rules are due to come into effect from midnight on November 29. The government agreed the changes at a Cabinet meeting on Tuesday in a bid to bring Ireland in line with the EU's traffic light system. It will have a significant impact on people travelling at Christmas as it will limit the number of days people have to spend in self-isolation once they arrive.
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US President-Elect Joe Biden said the presidential transition is moving along despite roadblocks from President Donald Trump's administration, as the president refuses to accept Biden's election victory and presses on with legal challenges. "We're already beginning the transition, we're well under way," Biden said during a press conference, adding that Trump's refusal "does not change the dynamic at all". Trump and his administration have upended the typical presidential transition, a massive process that sees control of the US government - from foreign policy to domestic issues - switch from one administration to the next in less than three months. "I just think it's an embarrassment, quite frankly," Biden said. The Trump administration is currently holding up millions of dollars that are allocated to an incoming president to facilitate a smooth transition of governments. Biden said on Tuesday that his team is able to proceed even without access to the government funds.
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Republican Senator Thom Tillis won re-election in North Carolina after his opponent, Democrat Cal Cunningham, conceded on Tuesday, giving the Republican party an even stronger chance of maintaining a majority in the all-important upper chamber of the US Congress. Thillis' victory gives Republican 49 seats in the Senate. Another Republican is favoured to win re-election in Alaska, where the race is still too early to call. Democrats are pinning their hopes on Georgia, where two Senate seats are up for grabs in run-off elections this January. If the Senate ends with a 50-50 split between the parties, Kamala Harris, the president-elect, can cast a tie-breaking vote for the Democrats.
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Democrats clinched two more years of controlling the US House of Representatives on Tuesday, albeit with a potentially razor-thin majority. It marks a bittersweet finale to last week's elections that has left the party divided and with scant margin for error for advancing their agenda. The party has now nailed down at least 218 seats, according to The Associated Press, and could win a few others when more votes are counted. While that assures command of the 435-member chamber, blind sided Democrats were all but certain to lose seats after an unforeseen surge of Republican voters transformed expected gains of perhaps 15 seats into losses potentially approaching that amount.
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BROKER RATING CHANGES
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BERENBERG RAISES SHELL B TO 'BUY' (HOLD) - PRICE TARGET 1,450 PENCE
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GOLDMAN SACHS RAISES IAG TO 'BUY' (NEUTRAL) - PRICE TARGET 195 (125) PENCE
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JPMORGAN CUTS CRODA TO 'UNDERWEIGHT' ('NEUTRAL') - TARGET 5700 (4250) PENCE
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CITIGROUP RAISES WHITBREAD TO 'BUY' ('NEUTRAL') - TARGET 3,400 (2,350) PENCE
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MORGAN STANLEY CUTS ADMIRAL GROUP TO 'UNDERWEIGHT' ('EQUAL-WEIGHT') - PRICE TARGET 2,500 (2,300) PENCE
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COMPANIES - FTSE 100
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Flutter Entertainment said its performance in the third quarter exceeded expectations in both sports and gaming. For the quarter ended September 30, total revenue was up 27% to GBP1.33 billion from GBP1.04 billion in the third quarter last year. Sports revenue was up 32% to GBP798 million from GBP606 million, and gaming revenue was up 21% to GBP527 million from GBP436 million. Looking ahead, Flutter expects annual earnings before interest, tax, depreciation and amortisation, excluding the US, to be in a range between GBP1.28 billion from GBP1.35 billion, driven by higher customer volumes across all divisions. This is higher than the previously guided range of GBP1.18 billion to GBP1.33 billion. In the US, increased investment in customer acquisition is expected to lead to an EBITDA loss of GBP160 million to GBP180 million, the group formerly known as Paddy Power Betfair said.
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BAE Systems said it has continued to deliver a resilient performance in line with its expectations for a strong second half. The Farnborough-based firm said full-year guidance for 2020 sales and cashflow remains unchanged from the 2020 interim results. However, underlying earnings per share are now expected to be slightly higher than previously guided, with good operational performance and an expected lower tax rate offsetting negative currency movements. BAE said order intake expectations for 2020 are ahead of its original pre-Covid-19 planning for the year. "Demand for our capabilities remains high, and we recognise our role not only in supporting national security, but also in contributing to the economies of the countries in which we operate," said Chief Executive Charles Woodburn.
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COMPANIES - FTSE 250
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JD Wetherspoon reported a fall in first-quarter sales as the ubiquitous pub chain bemoaned the impositions of tighter coronavirus restrictions by the UK government. For the 15 weeks to November 8, like-for-like sales decreased by 28%. Wetherspoon said sales in October were significantly lower than in previous months, following the imposition of a number of new restrictions, including changes in the virus tier categories, a 10pm curfew, a requirement to order all food and drink 'at the table', and the mandatory use of face masks when moving around inside pubs. Wetherspoon estimates the 'cash burn' during the current month of closure to be around GBP14 million. It said 756 pubs in the UK and Ireland now are closed, while 64 in Scotland and 51 in Wales are open, though operating under restrictions. "For any pub or restaurant company trading in different parts of the UK, and for customers generally, the constantly changing national and local regulations, combined with geographical areas moving from one tier to another in the different jurisdictions, are baffling and confusing. The entire regulatory situation is a complete muddle," Chair Tim Martin said. "However, the initial regulations, following reopening, introduced on 4 July, were carefully thought through, followed thorough consultation, and were based on solid scientific foundations of social distancing and hygiene. The benefits of the regulatory hyperactivity since then, including the imposition of a curfew, are questionable," Martin added.
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COMPANIES - MAIN MARKET AND AIM
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Two Shields Investments agreed a reverse takeover of the remainder of 20%-owned portfolio firm BrandShield. Two Shields will pay GBP13.2 million for this. It also announced a GBP3.2 million equity raise, with investors that include Ann Gloag, co-founder of public transport operator Stagecoach, and a 200-into-1 share consolidation. Brandshield offers "an end-to-end digital brand protection and online threat hunting solution".
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Round Hill Music Royalty Fund raised USD282.0 million in its initial public offering in London. It joins FTSE 250 constituent Hipgnosis Songs Fund in offering investment in music rights.
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COMPANIES - GLOBAL
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Chinese technology shares tumbled for a second day Wednesday, after Beijing's market regulator put out draft antitrust rules that signalled a looming crackdown on high-flying internet giants. Shares of e-commerce leader Alibaba Group dropped by 8.1 in Hong Kong – just a week after regulators halted an enormous IPO for the group's financial arm – while tech rival Tencent Holdings lost 5.5%. Rules published on Tuesday outlined plans to prevent "monopolistic behaviour" among internet companies, a shift from its previously more hands-off approach to antitrust issues. Other Chinese giants that tumbled in Hong Kong included online shopping platform JD.com, smartphone maker Xiaomi and food delivery giant Meituan. The guidelines, put out by the State Administration for Market Regulation, take specific aim at internet platforms and exclusivity clauses that hinder competition. China's antitrust watchdog is also targeting acts constituting an "abuse of dominant market positions" that could squeeze out smaller rivals – including unfair pricing, restricting transactions without justifiable reason, or pushing different prices and conditions on customers based on their buying habits.
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TikTok asked a Washington court Tuesday to stop an order from US President Donald Trump's administration from taking effect this week as the White House seeks to ban the Chinese-owned app in the US. Chinese company ByteDance is facing a Thursday deadline to restructure ownership of the app in the US to meet US security concerns. In its court petition, TikTok asked for more time, saying it has not received enough feedback on its proposed solution. The company said in a statement that it had asked the government for a 30-day extension because it was "facing continual new requests and no clarity on whether our proposed solutions would be accepted" but it had not been granted.
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Japanese telecoms firms appealed to the communications ministry over a planned USD40 billion takeover of the country's biggest mobile carrier by its government-backed parent, warning it would "prevent fair competition". NTT announced in September its plan to buy out remaining shares in NTT Docomo Inc, in a potentially record-breaking deal. NTT currently holds 66% of NTT Docomo's shares, and its chief executive argues the move would enhance "competitiveness and growth". But on Wednesday, 28 Japanese telecom companies including Docomo rivals SoftBank Corp, part of SoftBank Group Corp, and KDDI Corp sent a joint letter to the communications minister protesting against the move. Making Docomo a wholly owned company "will create a powerful force that dominates the market", they argued.
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Wednesday's Shareholder Meetings
Rank Group PLC - AGM
Supermarket Income REIT PLC - AGM
ThinkSmart Ltd - AGM
InnovaDerma PLC - AGM
Hays PLC- AGM
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By Tom Waite; thomaslwaite@alliancenews.com
Copyright 2020 Alliance News Limited. All Rights Reserved.
