(Alliance News) - Construction firm Galliford Try on Wednesday reported a fall in annual profit and sliced its dividend by a quarter.
Revenue for the year to June 30 fell 7.5% to GBP2.71 billion from GBP2.93 billion, with pretax profit dipping 27% to GBP104.7 million from GBP143.7 million.
The company cut its full-year dividend 25% to 58.0p from 77.0p.
Galliford said its construction result for the year was hit by challenges in both legacy projects and some current one, though the business continues to see "good demand" in its Building and Infrastructure divisions, which are part of Galiford's Construction arm.
On Tuesday, Bovis Homes said it had resumed talks to acquire Galliford Try's housebuilding businesses.
Galliford Chief Executive Graham Prothero said on Wednesday: "The potential combination of our Linden Homes and Partnerships businesses with Bovis Homes represents a superb opportunity, enhancing the prospects for all three of our businesses to thrive as strategically focused and well-financed operations with excellent opportunities for growth. The transaction allows Construction to continue trading as a standalone well capitalised business."
Galliford shares were down 1.0% early Wednesday, having risen 7.3% on Tuesday following the Bovis announcement.
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Here is what you need to know at the London market open:
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MARKETS
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FTSE 100: up 0.5% at 7,302.10
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Hang Seng: up 1.6% at 27,109.49
Nikkei 225: closed up 1.0% at 21,597.76
DJIA: closed up 73.92 points, 0.3%, at 26,909.43
S&P 500: closed marginally higher at 2,979.39
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GBP: firm at USD1.2368 (USD1.2350)
EUR: unchanged at USD1.1045
Gold: down at USD1,493.40 per ounce (USD1,496.83)
Oil (Brent): down at USD62.76 a barrel (USD63.51)
(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
0700 EDT US MBA weekly mortgage applications survey
0830 EDT US producer price index
1000 EDT US monthly wholesale trade
1030 EDT US EIA weekly Petroleum Status Report
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UK Prime Minister Boris Johnson has sought to shore up support for his Brexit ambitions, as Labour's deputy leader prepared to call for a second referendum before any general election. Johnson held talks with the Conservatives' key parliamentary allies the DUP, with leader Arlene Foster and her deputy Nigel Dodds spending more than an hour inside Downing Street. Foster said the prime minister demonstrated his "commitment to securing a deal which works for the entire UK" as well as the Republic of Ireland, including rejecting the idea of a Northern Ireland-only backstop – which would have created a special economic zone for the country. The Conservatives have enjoyed the support of the DUP's 10 MPs on many key issues since June 2017, although Theresa May was unable to convince them to vote for her Brexit deal. For Labour, deputy leader Tom Watson is expected to say a single-issue Brexit election may not break the deadlock in Parliament – something only a second referendum can achieve with certainty.
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Japanese Prime Minister Shinzo Abe appointed new foreign and defence ministers and promoted a popular rising political star, in a cabinet reshuffle that fuelled speculation over the prime minister's successor. The spectacular appointment as environment minister of the telegenic Shinjiro Koizumi, the 38-year-old son of much-loved former PM Junichiro Koizumi, set tongues wagging in Tokyo political classes as the Abe era draws to a close. Abe is set to become Japan's longest-serving prime minister in November but is expected to step down at the Liberal Democratic Party leadership election in 2021 and the jostling for position is already beginning. Japan's new foreign minister is Toshimitsu Motegi, who was promoted as a reward for his work in negotiating a trade deal with the US.
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South Korea wants to take its dispute with Japan to the World Trade Organization, Trade Minister Yoo Myung Hee said in Seoul. The countries are locked in a feud over Tokyo's export curbs on materials used by its neighbour to manufacture computer chips and displays. While South Korea is the world's largest producer of computer chips, it imports raw materials needed in the process from Japan.
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China has opened its soybean meal market to Argentina in a "historic deal", the Ministry of Agriculture in Buenos Aires said. "This historic agreement for Argentina represents a great opportunity to enter the world's largest consumer market of vegetable protein for food in the livestock sector," the ministry said in a statement. The deal was reached after 20 years of negotiations, the statement said. An agreement is to be signed in Buenos Aires on Wednesday. The Chinese market has until now only been open to soybeans and soybean oil but closed to to soybean meal. The newspaper La Nacion estimates that the deal can lead to soybean-related trade worth some USD1.6 billion.
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North Korean leader Kim Jong Un personally supervised the test-firing of a "super-large" rocket launcher, state media reported. Kim "gave field guidance to the test-fire of [a] super-large multiple rocket launcher again on Tuesday," the official North Korean news agency KCNA reported. "Two rounds of test-fire took place." North Korea fired two short-range projectiles into the sea early Tuesday, according to South Korean media reports.
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BROKER RATING CHANGES
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HSBC CUTS SHELL B TO 'HOLD' (BUY) - PRICE TARGET 2500 (2780) PENCE
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INVESTEC CUTS STANDARD CHARTERED TO 'SELL' ('HOLD')
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PEEL HUNT INITIATES RENEW HOLDINGS WITH 'BUY' - TARGET 500 PENCE
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JPMORGAN INITIATES FEVERTREE DRINKS WITH 'OVERWEIGHT' - TARGET 2740 PENCE
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COMPANIES - FTSE 250
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Crest Nicholson said it has appointed Iain Ferguson as non-executive chair. Ferguson was previously chair of Stobart Group and chief executive at Tate & Lyle. Crest Nicholson's current chair, Stephen Stone, will step down from the board at the end of October.
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Car dealer Inchcape said it has agreed to sell three retail sites to Australia to Sime Darby Motors for GBP63 million. This is in line with Inchcape's focus on core distribution capabilities, and will streamline the Australasia business. The hit to 2019 trading profit from the disposals is expected to be "immaterial", it said. "Today's announcement demonstrates the disciplined utilisation of capital towards this high returning and capital light part of the market where I continue to see both organic and inorganic opportunities for Inchcape," said Chief Executive Stefan Bomhard.
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COMPANIES - OTHER MAIN MARKET AND AIM
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S4 Capital reported a sharp rise in interim revenue, but sank to a loss. Revenue for the six months to the end of June rose 42% to GBP88.0 million from GBP62.1 million, though the Martin Sorrell-led ad firm swung to a pretax loss of GBP8.5 million from a GBP12.1 million profit a year ago. This was mainly due to GBP15.0 million in "adjusting items", which included non-recurring items and the amortisation of certain fair value adjustments. "These results confirm the power and relevance of the faster, better, cheaper, digital-only unitary advertising model, with first party data fuelling content and programmatic. Now the task is to build significant scale organically, by broadening and deepening existing and new client relationships and adding resources through merger and acquisition. Your company is being increasingly involved in significant industry reviews," said Sorrell, who is S4 Capital's executive chair and used to be the chief executive officer of FTSE 100-listed advertising firm WPP. S4 added that the second half is expected to be "even stronger" and has started "very well".
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COMPANIES - INTERNATIONAL
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Apple unveiled its iPhone 11 models on Tuesday with a price cut for the most basic models while also laying out plans for streaming and gaming services as it bids to weather the slump in the global smartphone market. Price appeared to be a key consideration as the tech giant reduced the entry level price for the iPhone 11 to USD699 and undercut rivals for its gaming and streaming television subscriptions. Apple unveiled three versions of the iPhone 11 including "Pro" models with triple camera and other advanced features starting at USD999 and USD1,099, unchanged from last year's prices, touting upgraded features including ultra-wide camera lenses. The surprise from Apple was the reduction in the starting price at USD699, down from USD749 for the iPhone XR a year ago even as many premium devices are being priced around USD1,000. Apple TV+ service will launch November 1 in more than 100 countries at USD4.99 per month and will include a "powerful and inspiring lineup of original shows, movies and documentaries." While Apple's streaming service will have limited content at first, its price is below the USD6.99 for the forthcoming Disney+ service and the more expensive plans from Netflix.
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JPMorgan Chase has been picked as the investment bank to lead Saudi Aramco's initial public offering, which could be the biggest ever, people close to the matter told AFP on Tuesday. The US banking giant was notified by the Saudi company of the selection on Tuesday, the sources said, adding that Aramco envisions an offering on a local exchange followed by one on an international exchange that has not yet been picked.
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Banco Santander was accused by a claims company of attempting to reduce the amount it pays to UK customers who were mis-sold payment protection insurance, the Financial Times reported. The bank told claims management companies that it would send documentation to customers directly, rather than going through claims companies, according to an email seen by the newspaper. Claims management companies handle customer complaints and, in exchange, receive a portion of the compensation. According to the FT, the move was made by the bank in order to "streamline our investigations", though Santander's critics said this measure would reduce payouts.
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Uber Technologies said it was laying off about 8% of its product and engineering teams as the smartphone-summoned ride service tries to map a route to profitability. The San Francisco-based company is cutting about 265 people from its engineering group and another 170 or so jobs from its product team, a spokesman told AFP. While a fast-growing startup, ranks of Uber employees swelled to more than 27,000 employees around the world and the time had come to shift gears and cut ranks for efficiency, according to the company.
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Wednesday's Shareholder Meetings
Superdry
IG Design Group
Real Estate Credit Invesmtents
SDCL Energy Efficiency Income Trust
Sports Direct International
Miton Micro Cap Trust
Staffline
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