(Alliance News) - Royal Dutch Shell on Monday set out plans to simplify its share structure and change its name to Shell PLC.
Instead of the current 'A' and 'B' share structure, the oil major plans for a conventional single share structure. This would allow for an acceleration in distributions by way of share buybacks, reduce risk for shareholders, and let Shell manage its portfolio with greater flexibility, it said.
The company will align its tax residence to the UK. It has been incorporated in the UK with Dutch tax residence and a dual share structure since 2005.
Shell will retain its current share listings and will still be eligible for FTSE UK indices. It is the largest listed company in London.
One change, however, will be the company's name.
Shell explained: "Carrying the Royal designation has been a source of immense pride and honour for Shell for more than 130 years. However, the company anticipates it will no longer meet the conditions for using the designation following the proposed change. Therefore, subject to shareholder approval of the resolution, the board expects to change the company's name from Royal Dutch Shell PLC to Shell PLC."
Shell A shares were up 0.6%, while B shares were up 0.1%, early Monday.
Here is what you need to know at the London market open:
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MARKETS
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FTSE 100: down 0.7% at 7,333.47
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Hang Seng: up 0.1% at 25,359.25
Nikkei 225: closed up 0.6% at 29,776.80
DJIA: closed up 179.08 points, or 0.5%, at 36,100.31
S&P 500: closed up 0.7% at 4,682.85
Nasdaq Composite: closed up 1.0% at 15,860.96
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EUR: flat at USD1.1455 (USD1.1450)
GBP: up at USD1.3429 (USD1.3413)
USD: up at JPY113.97 (JPY113.88)
GOLD: flat at USD1,861.60 per ounce (USD1,861.52)
OIL (Brent): down at USD81.54 a barrel (USD82.26)
(changes since previous London equities close)
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ECONOMICS AND GENERAL
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Monday's Key Economic Events still to come
UK PM Johnson delivers annual Lord Mayor's Banquet speech
1100 CET EU foreign trade
1100 GMT Ireland goods exports and imports
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Sales at Britain's pub, bar and restaurant groups pushed ahead of pre-pandemic levels for a third consecutive month in October, despite labour shortages and rising costs continuing to drag on performance. Sales rose 3% on 2019 levels amid a continued rebound in the late-night market. Bars enjoyed sales growth of 13%, according to a report by the CGA, The Coffer Group and RSM. Pubs fared better than restaurants with sales growing 3% and 2% respectively. Sales were up 64% from October 2020 when pubs and restaurants were closed during lockdown.
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Austria will begin a lockdown on Monday for people not vaccinated against Covid-19, a first in the EU as the Alpine member fights a record surge in cases, Chancellor Alexander Schallenberg said. About 65% of Austria's almost nine million people are vaccinated, below the EU average of 67%, while daily increases in infections have hit records this week. Other European governments are also eyeing unpopular Covid curbs, with the Netherlands opting for Western Europe's first partial lockdown of the winter. Austria's lockdown means people over 12 who are not vaccinated or cannot show that they have recently recovered from Covid will not be allowed to leave the house except for reasons such as buying essential supplies, exercise or seeking medical care.
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EU foreign ministers were set to adopt a fresh package of sanctions against Belarus on Monday after more than a week of escalating tensions over migrants at the EU's eastern border. Belavia, Belarus's state airline, is the intended target of the new sanctions, the fifth package since a contested election in August 2020 that reinstalled long-time President Alexander Lukashenko in power. The airline is to be included for its alleged role in transporting migrants to Minsk where they are driven under Belarusian guard to the country's borders with EU member states Poland, Lithuania and Latvia. Thousands of migrants are now stranded in dire conditions between Poland and Belarus, caught at the centre of a fierce diplomatic row between Lukashenko and the EU, which does not recognize the authoritarian ruler as a legitimate leader.
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BROKER RATING CHANGES
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GOLDMAN SACHS CUTS B&M EUROPEAN VALUE RETAIL TO 'SELL' ('NEUTRAL') - TARGET 580 (620) PENCE
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RBC CUTS B&M TO 'UNDERPERFORM' ('SECTOR PERFORM') - TARGET 575 (600) PENCE
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BERENBERG RAISES ADMIRAL TO 'BUY' ('HOLD') - TARGET 3,245 (2,895) PENCE
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COMPANIES - FTSE 100
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Vodacom raised its interim payout marginally despite a slip in profit, as the company focuses on mergers & acquisitions and growing its offerings. The Johannesburg-listed telecommunications firm, two-thirds owned by the UK's Vodafone, reported pretax profit of ZAR12.41 billion in the six months ended September 30, slipping 1.0% from ZAR12.53 billion last year. A 8.1% rise in direct expenses to ZAR18.40 billion from ZAR17.02 billion partially offset revenue increasing 4.2% to ZAR49.86 billion from ZAR47.84 billion. Vodacom upped its interim dividend by 1.2% to 420 rand cents from 415 cents last year.
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COMPANIES - FTSE 250
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CMC Markets confirmed it is in early stages of evaluating a split of its leveraged and non-leveraged divisions, and Serco boosted full-year guidance. After a report over the weekend from Sky News, CMC said it is in "very early stages" of separating its "two strong underlying businesses", leveraged and non-leveraged. It expects to start its review of such a move before the end of the year and complete it by June 2022. "Both businesses have benefited from significant investment and each have strong growth prospects in sizeable markets with excellent competitive positions," said CMC. It did warn that as talks are exploratory at this stage, a managed separation of the businesses is not guaranteed.
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Cineworld reported positive cash flow for October as it has seen strong demand since reopening, driven by an "excellent" film slate. Box office and concession revenue neared pre-virus levels, standing at 90% of 2019's result in October on a constant currency basis, improving from just 50% in July. The UK & Ireland was the standout performer last month, with revenue exceeding 2019 levels. The cinema operator pointed to a strong movie line-up, including the latest James Bond film and Dune. Further, there are still major blockbusters to be released in 2021, including 'Ghostbusters: Afterlife' and 'Spider-Man: No Way Home'. The revenue performance has been underpinned by cost control, though the firm did note some inflationary pressures. Nonetheless, it generated positive cash flow in October, an "important milestone in the company's recovery".
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Outsourcer Serco upgraded guidance after stronger-than-expected trading in recent months. It now expects revenue for 2021 to be around GBP4.4 billion, boosted from its previous forecast of GBP4.3 billion and further ahead of 2020's GBP3.9 billion. Underlying trading profit is seen around GBP225 million, again lifted from prior guidance of GBP200 million and soaring past 2020's GBP163 million. However, it did caution that most the factors behind its improved performance are unlikely to repeat. It pointed to volumes of work related to Covid-19 support in the UK and Australia, which were higher, and continued for longer, than anticipated. Some contracts across the business performed better than expected, such as immigration-related contracts again in the UK and Australia. Looking ahead, Serco expects 2022 guidance to be broadly in line with current company-compiled analyst consensus at around GBP4.2 billion for revenue and GBP196 million underlying trading profit. "We expect 2022 to see much lower demand for Covid-19 related services, partially offset by the impact of new work secured in 2021 and growth in our core non-Covid-19 related business," said Serco.
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COMPANIES - MAIN MARKET AND AIM
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Builder MJ Gleeson ahead of its annual general meeting on Monday backed full-year forecasts as it highlighted strong demand for homes and higher selling prices. Chair Dermot Gleeson noted that the average selling price on new reservations since the start of the financial year is up 12% on a year before. Gleeson Homes should complete the sale of around 900 homes in the half-year December 31 and "not less" than 2,000 homes in the full year to June 30. "Strong demand driven by the structural need for more low-cost, high-quality homes for first time buyers and our ability to offer attractive levels of affordability to our customers, mean that the outlook for the division remains positive," Gleeson said. Despite challenges across the market - including supply issues and inflationary pressures - MJ Gleeson said it is pleased with progress in the year-to-date and remains confident in the full-year outcome.
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COMPANIES - GLOBAL
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Plane manufacturer Airbus has received an order for 255 medium-haul jets, hailing its first major sale of the pandemic. The order for the A321neo series aircraft comes from US private equity firm Indigo Partners on behalf of four low-cost airlines. The parties signed the deal on Sunday at the Dubai Airshow, according to Airbus. Airbus sales chief Christian Scherer called it a "landmark order" that showed the effect of the pandemic receding and a growing demand for sustainable flying. The four airlines receiving the planes are Hungary-based, London-listed Wizz Air, US operator Frontier, Mexico's Volaris and Chilean-Argentinian firm Jetsmart.
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Monday's Shareholder Meetings
ITM Power PLC - GM re capital raise
MJ Gleeson PLC - AGM
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By Tom Waite; thomaslwaite@alliancenews.com
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