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(Alliance News) - National Grid on Thursday unveiled a deal to buy Britain's largest electricity distribution business for GBP7.8 billion and will offload the UK national gas transmission system under a plan to increase its focus on electricity, PA reports.
The group, which manages the UK's power infrastructure, said it will buy Western Power Distribution from US energy giant PPL Corp.
In a separate transaction, National Grid will sell its Rhode Island utility business – Narragansett Electric Co – to PPL for USD3.8 billion.
National Grid said it will launch a process later this year to sell a majority stake in National Grid Gas as it looks to boost its electricity assets from around 60% to about 70% of its overall portfolio.
John Pettigrew, chief executive of National Grid, said: "These transactions will be transformational for our UK portfolio. The acquisition of WPD is a one-off opportunity to acquire a significant scale position in UK electricity distribution."
He added: "With increased exposure to the UK's electricity sector, these transactions enhance our role in the progress towards net zero, underpinning our core ambition which is to enable the energy transition for all."
National Grid shares were down 2.0% early Thursday.
Here is what you need to know at the London market open:
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MARKETS
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FTSE 100: down 1.03 points at 6,761.64
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Hang Seng: up 1.3% at 29,405.72
Nikkei 225: closed up 1.0% at 30,216.75
DJIA: closed up 189.42 points, 0.6%, at 33,015.37
S&P 500: closed up 0.3% at 3,974.12
Nasdaq Composite: closed up 0.4% at 13,525.20
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EUR: up at USD1.1956 (USD1.1900)
GBP: up at USD1.3970 (USD1.3873)
USD: down at JPY109.15 (JPY109.29)
Gold: up at USD1,737.51 per ounce (USD1,727.63)
Oil (Brent): soft at USD67.57 a barrel (USD67.64)
(changes since previous London equities close)
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ECONOMICS AND GENERAL
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Thursday's Key Economic Events still to come
1200 GMT UK Bank of England interest rate decision
1200 GMT UK Monetary Policy Committee meeting minutes
1100 CET EU labour cost index
1100 CET EU foreign trade
0830 EDT US jobless claims
1030 EDT US EIA weekly natural gas storage report
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A stronger-than-expected rebound this year will still leave the world down an estimated USD10 trillion due to the coronavirus pandemic and lockdowns, according to the United Nations Conference on Trade & Development. Although the global economy could expand by 4.7% in 2021, it will nonetheless wind up "short of 10 trillion dollars" - about twice Japan's gross domestic product - compared to if the pandemic had never happened, according to UNCTAD. Last year, the global economy "posted its sharpest annual drop in output since statistics on aggregate economic activity were introduced in the early 1940s," UNCTAD said in a new report.
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BROKER RATING CHANGES
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GOLDMAN SACHS RAISES NATWEST TO 'CONVICTION BUY LIST' ('BUY') - TARGET 300 (285) P
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UBS CUTS PERSIMMON TO 'NEUTRAL' ('BUY') - TARGET 2915 (3070) PENCE
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UBS CUTS CREST NICHOLSON TO 'SELL' ('NEUTRAL') - TARGET 315 (320) PENCE
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COMPANIES - FTSE 100
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Ocado Retail, a joint venture between Ocado Group and Marks & Spencer, said retail revenue grew 40% in the 13 weeks to February 28, reflecting strong demand for online grocery during the latest lockdown. The average order size was GBP147 in the period, as a result of seasonal strength over the Christmas holiday and "a temporary reversal of the trend towards normalised shopping behaviour in response to further national lockdown measures in the UK". The online grocer said M&S products consistently accounted for over 25% of the average basket size. Looking ahead, Ocado Retail expects positive revenue growth in the second quarter compared to the corresponding period last year as it continue to ramp up its "mini" customer fulfilment centre in Bristol and as restrictions remain in place in the UK. It said will open two standard size CFCs in financial 2021, while 12 new "micro" sites are being sought, primarily in London. These are to support the roll-out of the Ocado Zoom immediacy concept, which offers deliveries within one hour of ordering, the company said.
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Vodafone Group late Wednesday said its Vantage Towers spin-off will be worth EUR12.1 billion when it starts trading in Frankfurt on Thursday. Shares in the telecommunications firm's European towers arm priced at EUR24.00 each in its initial public offering. Vodafone said 95.8 million Vantage Towers shares were placed, netting Vodafone EUR2.3 billion. "The IPO represents a significant milestone for Vantage Towers as the company continues its commercial focus on deploying the full potential of its market leading tower infrastructure to serve the increasing demand for connectivity across Europe," Vodafone said.
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BP is taking final bids for its North Sea assets, Bloomberg News reported. Oil and gas producers Tailwind Energy Ltd, London-listed Serica Energy, Ithaca Energy, London-listed EnQuest and newcomer Waldorf Production UK have been considering binding offers for some or all of the assets, Bloomberg said. BP is looking to offload its Shearwater and Andrew fields and could end up selling its interests to different bidders depending on the interest it receives. The BP fields were due to be purchased by Premier Oil last year after oil prices crashed but hit a snag after Premier's largest creditor initially blocked the deal. The transaction, which was valued at USD625 million, was later dropped following a reverse-takeover of Premier by Chrysaor Holdings.
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An Italian court on Wednesday cleared oil majors Eni and Royal Dutch Shell of USD1.1 billion corruption charges related to a major oil exploration deal in Nigeria. Judges in Milan acquitted Italy's Eni, Anglo-Dutch firm Shell and 13 defendants, including Eni Chief Executive Claudio Descalzi and his predecessor Paolo Scaroni. "After almost three years of trial, the judgment by the court has finally established that the company, the CEO Claudio Descalzi and the management involved in the proceedings have all behaved in a lawful and correct manner," Eni said in a statement. In 2011, Eni and Shell paid USD1.3 billion dollars for a licence on OPL 245, a giant Nigerian offshore oilfield estimated to hold nine billion barrels of crude. The money was paid to the Nigerian government, but Italian prosecutors believed that USD1.1 billion ended in the pockets of Nigerian politicians and middlemen, including former oil minister Dan Etete.
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Sage has appointed Andy Duff to succeed Donald Brydon as chair when Brydon retires at the end of September. Duff, who is chair of speciality chemicals company Elementis, will join Sage as a non-executive director on May 1. Duff also served as chair of utility Severn Trent from 2010 until 2020.
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Aveva said it has now received all antitrust and regulatory clearances required ahead of completion of its acquisition of real-time data management software proider OSIsoft, including clearance by the Committee on Foreign Investment in the United States. The deal is now expected to complete shortly.
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COMPANIES - FTSE 250
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Online betting firm 888 Holdings tripled its annual dividend to 18 cents from 6 cents, despite reporting a decline in pretax profit to USD26.7 million in 2020 from USD45.3 million in 2019. However, adjusted pretax profit doubled to USD116.0 million from USD53.2 million. Revenue rose by 52% to USD849.7 million from USD560.3 million. 888 said the annualised impact of regulatory and compliance changes will create a USD70 million to USD100 million headwind to revenue in 2021, but it still expects to deliver revenue growth in the year ahead.
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Royal Mail is adding bar codes to millions of second class stamps as part of a trial it says is poised to pave the way for innovative customer services and benefits in the future. The initial pilot will see new-look bar codes appear on around 20 million second class stamps supplied to UK businesses. Bar codes could be linked to a service relevant to customers. The first barcoded stamps will be sold online to businesses from March 23 via Viking Direct and the Royal Mail shop.
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COMPANIES - MAIN MARKET AND AIM
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Fevertree Drinks said it delivered a resilient performance in 2020, despite lockdown restrictions hurting on-trade sales by forcing the closures of bars and restaurants. Off-trade sales via convenience stores and supermarkets conversely benefited from the pandemic. For 2020, revenue was GBP252.1 million, down 3% from GBP260.5 million in 2019, and pretax profit was GBP51.6 million, down 29% from GBP72.5 million. Fevertree noted that it enjoyed a "very strong" second half performance in Europe, driven by strong off-trade sales, importer restocking and GDP portfolio brand revenue. Fevertree recently acquired Global Drinks Partnership, its sales agent in Germany. Fevertree said it also saw significant momentum in the US as the brand continues to gain traction with retailers and consumers. The London-based company declared a full-year dividend of 15.68 pence, up 4% from 15.08p, which it said reflected its financial strength, confidence in the business and strong cash generation. Looking ahead, Fevertree reintroduced guidance and anticipates revenue growth of 12% to 16% in 2021. Fevertree noted the first months of the year have seen a continuation of very positive trading in the off-trade across all regions. It acknowledged that some of the off-trade demand is likely to switch to the on-trade as the economy begins to re-open, but estimates that the off-trade will remain strong.
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Thursday's Shareholder Meetings
4D Pharma PLC - GM re Longevity merger
Amino Technologies PLC - AGM
BigDish PLC - AGM
CML Microsystems PLC - GM re return of capital
Drum Income Plus REIT PLC - AGM
Idox PLC - AGM
Impax Asset Management Group PLC - AGM
Shield Therapeutics PLC - GM re share placing
Signature Aviation PLC - GM re acquisition
Sureserve Group PLC - AGM
Tullow Oil PLC - GM re disposals in Equatorial Guinea and Gabon
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By Tom Waite; thomaslwaite@alliancenews.com
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