LONDON (Alliance News) - UK retailers were in focus early Thursday, ahead of a Bank of England monetary policy decision due at noon in London.
Wm Morrison Supermarkets, Next and John Lewis provided results, none reporting any effect on sales so far from the Brexit vote in late June. "We have seen no negative impact on customer sentiment or customer behaviour," Morrisons said.
John Lewis added: "The EU referendum result has had little quantifiable impact on sales in the first half, but the uncertainty of leaving the EU will remain and the full impact of this change is yet to become clear."
Meanwhile, despite the weakness of the pound following the EU referendum, another British company has gone shopping in the US. Informa said it will buy Penton Information Services for GBP1.18 billion, to be funded by a fully-underwritten GBP715 million rights issue.
Here is what you need to know at the London market open:
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MARKETS
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FTSE 100: flat at 6,724.48
FTSE 250: flat at 17,623.94
AIM ALL-SHARE: down 0.1% at 801.24
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Hang Seng: up 0.5% at 23,296.06
Nikkei 225: closed down 1.3% at 16,405.01
DJIA: closed down 0.2% at 18,034.77
S&P 500: closed down 0.1% at 2,125.77
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GBP: flat at USD1.3211 (USD1.3200)
EUR: down at USD1.1224 (USD1.1267)
GOLD: soft at USD1,319.82 per ounce (USD1,324.80)
OIL (Brent): soft at USD45.94 a barrel (USD46.28)
(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
(all times in BST)
holiday China mid-autumn festival
0830 Switzerland SNB interest rate decision and press conference
0930 UK retail sales
1000 EU trade balance
1000 EU consumer price index
1200 UK BoE interest rate decision, asset purchase facility, meeting minutes and vote
1330 US current account
1330 US NY Empire State manufacturing index
1330 US retail sales
1330 US producer price index
1330 US initial and continuing jobless claims
1330 US Philadelphia Fed manufacturing survey
1415 US industrial production and capacity utilization
1500 US business inventories
1530 US EIA natural gas storage
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The US and Russia have agreed to extend the current ceasefire in the Syria conflict by 48 hours, while much-needed aid continues to remain undistributed. US Secretary of State John Kerry Kerry and Russian Foreign Minister Sergei Lavrov agreed on the extension in a telephone call, Kerry's spokesman Mark Toner said Wednesday. He said the ceasefire appeared to be holding despite numerous breaches.
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The US and Israel inked an agreement worth USD38 billion in military aid over the next decade. Under the new deal, Israel will receive USD3.8 billion annually starting in 2019. As part of the memorandum of agreement between the two governments, Israel will not ask the US Congress to increase the aid package.
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As Hillary Clinton prepared to head out on the campaign trail on Thursday, her personal doctor released a letter saying the US presidential candidate is responding well to treatment for pneumonia. The letter also provided a trove of other health details about the former secretary of state, who apparently hoped releasing the letter would put concerns about her health to rest just three days after the pneumonia diagnosis sidelined her on Sunday. At nearly the same time Clinton released the letter, Donald Trump, her Republican opponent, revealed results of a physical examination he underwent last week. Though less detailed, the information also appeared aimed at answering questions about how transparent he has been about his health. There is heightened interest in details about the health of both candidates because they are the oldest to seek the highest office in the US.
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BROKER RATING CHANGES
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BERENBERG RAISES INTERCONTINENTAL HOTELS TARGET TO 3,000 (2,850) P - 'HOLD'
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TRADERS: LIBERUM CUTS HARGREAVES LANSDOWN TO 'SELL' ('BUY')
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TRADERS: CITIGROUP CUTS SPORTS DIRECT TO 'NEUTRAL' ('BUY')
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BERENBERG INITIATES RPC GROUP WITH 'BUY' - TARGET 1,050 PENCE
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JEFFERIES CUTS PETROFAC TO 'HOLD' ('BUY') - TARGET 800 (835) PENCE
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UBS RAISES FRESNILLO TO 'NEUTRAL' ('SELL') - TARGET 1,600 PENCE
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HSBC RAISES ACACIA MINING TO 'BUY' ('HOLD') - TARGET 620 (300) PENCE
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BERENBERG INITIATES SANNE GROUP WITH 'BUY' - PRICE TARGET 600 PENCE
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COMPANIES - FTSE 100
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FTSE 100 events manager and business publisher Informa said it plans to acquire US-based Penton Information Services for GBP1.18 billion, to be funded by a fully-underwritten GBP715 million rights issue. The acquisition is billed by Informa as a step forward in its "growth acceleration plan" and is expected to add to earnings in its first full year. Informa will pay a total of GBP1.18 billion, made up of a GBP1.11 billion cash consideration, to be funded through a combination of debt and equity, and an equity consideration of GBP76 million. It will acquire the business from MidOcean Partners and Wasserstein & Co. The cash consideration will partly be funded through the GBP715 million rights issue of one rights issue share at 441 pence each for every four existing Informa shares.
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Wm Morrison Supermarkets reported growth in profit in the first half of its financial year, and although revenue slipped slightly, like-for-like sales grew as it attempts to attract more customers back to its stores. The supermarket chain said pretax profit in the 26 weeks ended July 31 grew to GBP143 million from GBP126 million in the same period the year before, although revenue slipped very slightly to GBP8.03 billion from GBP8.06 billion. Like-for-like sales, however, rose by 1.4% year-on-year. Morrisons will pay an interim dividend of 1.58 pence, up from 1.50p the year before.
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Next reported lower profit in the first half of its financial year, as although overall revenue grew, margins were squeezed as sales of markdowns outperformed sales of full-price items. The clothing and homeware retailer said pretax profit in the 26 weeks ended July 30 fell to GBP342.1 million from GBP347.1 million the year before, despite revenue rising to GBP1.94 billion from GBP1.89 billion. Retail margin decreased to 12.4% from 14.9%. Next maintained its interim dividend at 53 pence per share.
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GlaxoSmithKline reported positive results from its phase III study of its investigational shingles vaccine Shingrix, showing it has high efficacy in adults aged 70 years and over. The results were published in the New England Journal of Medicine, following headline results which were reported last October. The data showed that the two-dose candidate shingles vaccine had 90% efficacy compared to placebo in people over 70. Vaccine efficacy was maintained across the various age groups included in the study, ranging between 90% in people aged 70 to 79, and 89% in those aged 80 years and above.
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COMPANIES - FTSE 250
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Electrocomponents said it now expects to report a big jump in pretax profit in its first half as it saw better-than-expected trading, given a boost from the weaker pound. In a trading statement ahead of the release of its full interim results, the electronics distributor said it expects to report a pretax profit of around GBP54 million for the half year to the end of September, up from the GBP31.3 million it reported the previous year. Electrocomponents now expects underlying sales growth of around 2% for the first half
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Redrow said it is seeking shareholder approval to enable it to buy back up to 10% of its issued share capital as a result of recent fluctuations in its share price. The housebuilder said it will propose the resolution to be able to buy back up to 10% of its shares, or 37.0 million shares in total, at its 2016 annual general meeting, and will request authorisation to buy back such an amount annually going forward. The AGM will be held on November 9. Chairman Steve Morgan holds around 40% of Redrow, and the company will ask approval for this to rise to 45% without Morgan being required to make a takeover offer.
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COMPANIES - LONDON MAIN MARKET AND AIM
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Technology distributor Premier Farnell reported a rise in interim profit ahead of its takeover by Avnet Inc, expected to complete in the fourth quarter of 2016. For the half year to the end of July, Premier Farnell reported a pretax profit of GBP29.7 million, up from GBP23.3 million in the prior year, on revenue of GBP489.3 million, up from GBP461.3 million. Revenue was boosted by the weakness of sterling following the UK's vote to leave the European Union. In light of the company's imminent takeover, it has not proposed an interim dividend.
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COMPANIES - INTERNATIONAL
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Walt Disney will cut 250 jobs in its consumer products and interactive media unit, about 5% of the division's total employment, as the company shifts to licensing characters to video-game producers rather than making games itself, according to reports. Reports noted that about half of the positions being eliminated are in Bellevue, Washington, where employees created social games for distribution on Facebook.com. A sequel to the company's Marvel Avengers online game performed poorly.
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The trial of American International Group's former chairman, Maurice Greenberg, began on Tuesday at a state courthouse in Manhattan over accounting fraud committed at the insurance company several years ago. The civil case against Greenberg was filed in May 2005 by former New York Attorney General Eliot Spitzer. Greenberg faces allegations of orchestrating a USD500 million transaction to inflate the insurer's reserves and a USD200 million transaction to hide underwriting losses. Former AIG Chief Financial Officer Howard Smith is also named as a defendant.
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MasterCard plans to launch new biometric technology for verifying customer identities during online shopping transactions in the coming weeks with merchants and banks. The company has been testing facial and fingerprint recognition software, called Identity Check, in the Netherlands, Canada and the US, as a way to combat growing online fraud, the Wall Street Journal reported.
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Siemens plans large scale investments in projects in Argentina in the coming five years, the company's chairman said in Buenos Aires after meeting President Mauricio Macri. Joe Kaeser, chief executive of the German engineering conglomerate, said after meeting Macri that the company has designated EUR5 billion for investment in the South American country. German Economy Minister Sigmar Gabriel also took part in the meeting. The investment would be in infrastructure, energy and transportation projects and would create 3,000 direct jobs and up to 7,000 indirect jobs, according to the company.
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Thursday's Shareholder Meetings
Purplebricks Group
Livermore Investment Group
Colefax Group
Ensor Holdings
ITM Power
Terra Catalyst Fund
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By Tom Waite; thomaslwaite@alliancenews.com; @thomaslwaite
Copyright 2016 Alliance News Limited. All Rights Reserved.
