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(Alliance News) - JD Wetherspoon on Tuesday said it will invest an initial GBP145 million in developing new pubs and upgrading existing ones, creating 2,000 new jobs.
With pubs in England set to be allowed to open their beer gardens on April 12, Wetherspoon said it wants to start the development project within weeks of its pubs fully reopening. This is expected to be in May.
Wetherspoon said it has a pipeline of 75 projects, including 18 new pubs and 57 upgrades of its 871 existing pubs.
The first set of new pubs and extensions will be in towns and cities including Leeds, Birmingham, Newport Pagnell, Heswall, Sheffield, Felixstowe, Dublin, Haverfordwest, Carmarthen and Glasgow.
The FTSE 250 firm expects to invest a further GBP750 million to open 15 new pubs and enlarge 50 existing ones each year for 10 years, creating 20,000 new jobs.
However, the promise of jobs and investment came with a sting from Founders & Chair Tim Martin.
"Our immediate investment will provide work for architects, contractors and builders as well as result in 2,000 new jobs for staff in our pubs," he said. "We are geared up to start on the first projects within a few months. We are also committed to our long-term investment and job creation programme over the next decade.
"However, the investment is conditional on the UK opening back up again on a long-term basis, with no further lockdowns or the constant changing of rules."
Wetherspoon shares were up 1.0% early Tuesday.
Here is what you need to know at the London market open:
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MARKETS
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FTSE 100: up 0.7% at 6,782.86
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Hang Seng: up 0.9% at 28,594.78
Nikkei 225: closed up 0.2% at 29,432.70
DJIA: closed up 98.49 points, or 0.3%, at 33,171.37
S&P 500: closed down 3.45 points, or 0.1%, at 3,971.09
Nasdaq Composite: closed down 79.08 points, or 0.6%, at 13,059.65
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EUR: down at USD1.1748 (USD1.1761)
GBP: down at USD1.3773 (USD1.3790)
USD: up at JPY110.14 (JPY109.77)
Gold: down at USD1,704.78 per ounce (USD1,711.45)
Oil (Brent): up at USD64.95 a barrel (USD63.85)
(changes since previous London equities close)
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ECONOMICS AND GENERAL
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Tuesday's Key Economic Events still to come
1100 CEST EU business & consumer surveys
1400 CEST Germany provisional consumer price index
0900 EDT US monthly house price index
1000 EDT US consumer confidence index
1630 EDT US API weekly statistical bulletin
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The OPEC+ grouping of oil producers will hold its third ministerial summit of the year via videoconference on Thursday to discuss output cuts in the face of fresh price volatility. "The expectation is that the group will hold production steady also in May given current physical oil market weakness," according to Bjarne Schieldrop, an analyst at SEB. However, he added that "Russia and Kazakhstan are likely to lift production yet another notch and the group in total is probably fine with that." The OPEC cartel's largest producer is Saudi Arabia but the OPEC+ grouping also includes Russia, which produces even more crude oil. Under its current agreement the OPEC+ group is enforcing a drastic output cut, meaning seven million barrels that could be shipped to markets every day are being left in the ground. The aim has been to avoid oversupplying a market suffering from a collapse in demand due to the coronavirus pandemic.
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Covid-19 probably passed to humans from a bat via an intermediary animal, an international expert mission to China concluded in a report seen by AFP on Monday, while all but ruling out a laboratory leak. But the report, drafted by World Health Organization-appointed international experts and their Chinese counterparts, offers no definitive answers on how the new coronavirus jumped to humans. The report has had a troubled birth, with publication delays adding to the hold-ups and diplomatic wrangling that plagued the WHO's attempts to get experts into Wuhan – the city at the centre of the initial outbreak. They finally arrived on January 14, more than a year after the first cases surfaced. Experts believe the SARS-CoV-2 virus that causes the Covid-19 disease originally came from bats. The report authors judged that the most likely scenario was that it had made a direct leap to humans, while not ruling out other theories. Beijing's theory that the virus did not originate in China at all but was imported in frozen food was judged "possible" but very unlikely. Claims promoted by former US president Donald Trump's administration that the virus escaped from a research lab were judged "extremely unlikely".
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BROKER RATING CHANGES
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JPMORGAN RAISES ENTAIN TO 'OVERWEIGHT' ('NEUTRAL') - TARGET 1852 (1628) PENCE
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JPMORGAN CUTS 888 HOLDINGS TO 'NEUTRAL' ('OVERWEIGHT') - TARGET 400 PENCE
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BERENBERG RAISES RYANAIR TO 'BUY' (HOLD) - PRICE TARGET 20 (15) EUR
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RBC CUTS FEVERTREE DRINKS TO 'SECTOR PERFORM' ('OUTPERFORM') TARGET 2,000 (2,600) PENCE
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BARCLAYS INITIATES ITM POWER WITH 'OVERWEIGHT' - TARGET 800 PENCE
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COMPANIES - FTSE 100
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SSE held its full-year earnings guidance. The energy utility still expects adjusted earnings per share for the financial year ending on Wednesday in a range of 85 pence to 90p. In financial 2020, SSE recorded adjusted EPS of 83.6p, meaning financial 2021 results should be up by 1.7% to 7.7%. Weather conditions have meant that the shortfall in output from renewable sources has increased to around 9% below plan as at March 23 from 5% below in the nine months to the end of December. However, SSE expects Covid-19 to hit adjusted operating profit by around GBP180 million for the full-year, in the bottom half of its GBP150 million to GBP250 million range. As such, earnings guidance was held, and SSE intends to recommend a full-year dividend of 80p per share plus the annual increase in the UK retail prices index. SSE confirmed it intends to increase its dividend through to 2023 in line with RPI, as per its five-year plan. Meanwhile, the UK Competition & Markets Authority rejected SSE's appeal of changes to the calculation of charges paid by electricity generators, including SSE, for use of the electricity transmission system.
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Tobacco firm Imperial Brands reported a good start to its financial year, with performance in line with expectations. Imperial's half-year finishes on Wednesday. The Davidoff cigarettes maker said it remains on track to deliver full-year results in line with guidance, with first-half net revenue expected to grow by at least 1% on an organic, constant currency basis, driven by continued strong pricing in tobacco, as well as some benefit from growth in NGP revenue against a weak comparator period. "Adjusted organic operating profit growth is expected to be least mid-single digit at constant currency, benefiting primarily from significantly reduced losses in NGP and increased Logistics profit," the company added.
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FTSE Russell said Chinese government bonds are to be included in the FTSE World Government Bond Index, after a semi-annual review. "This confirmation is based on affirmation with members of the FTSE Russell advisory committees and other index users that ongoing reforms to the Chinese government bond market warrant inclusion in the WGBI," said FTSE Russell, part of London Stock Exchange Group. The FTSE World Government Bond Index provides exposure to the global sovereign fixed income market, measuring the performance of fixed-rate, local currency, investment-grade sovereign bonds. China's phased inclusion will take place over a period of three years, commencing with an effective date of October 29, 2021.
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COMPANIES - FTSE 250
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Royal Mail said trading has been in line since the update released earlier in March, and said it intends to pay a dividend this year. Adjusted operating profit for the financial year ending on Wednesday is still expected to be around GBP700 million, the firm said, and, after reviewing its performance over the past year, has decided to pay a one-off final dividend of 10p per share. Royal Mail expects to unveil a new dividend policy as its results in May. Royal Mail - boosted this year by the pandemic, with customers turning to online deliveries as high store stores were forced to shut - had previously said it would not pay a dividend for the 2021 financial year. The postal operator added that it will provide a business update on medium-term targets for the GLS arm later on Tuesday. This includes a focus on international and business-to-consumer as key growth opportunities. From the 2020 financial year to 2025, GLS expects to grow revenue at a compound annual growth rate of around 12%, more than double operating profit to EUR500 million and generate EUR1 billion of free cash flow. For financial 2021, Royal Mail expects GLS to report adjusted operating profit of GBP350 million, with a profit margin by the same measure of 8.7%.
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Pennon Group said it is on track to deliver "resilient" results for the financial year ending on Wednesday. The water utility said the financial impact from Covid-19 is in line with expectations, and it remains in a "strong" financial position with expected cash and committed facilities well in excess of GBP3 billion at the year's end. "Pennon believes there is significant value potential from the reinvestment of the Viridor sale proceeds in the UK water sector and continues to narrow down its review of potential growth opportunities. In the event a major value accretive investment opportunity is not available, Pennon expects to make a substantial return of capital to shareholders," the company added. Back in July, Pennon completed the sale of recycling and waste business Viridor to funds advised by Kohlberg Kravis Roberts & Co for an enterprise value of GBP4.2 billion.
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COMPANIES - MAIN MARKET AND AIM
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Joining larger utility peers in reporting on Tuesday was Yu Group, an independent supplier of gas, electricity and water to the UK business market. Yu said it narrowed its pretax loss to GBP1.5 million from GBP6.0 million in 2019, despite a decline in revenue to GBP101.5 million from GBP111.6 million. Business picked up substantially in the second half of the year, after the "shock" of the onset of the pandemic, Yu said, and this momentum has continued into the first quarter of 2021, with contracted revenue up 16% from the same point a year ago.
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COMPANIES - GLOBAL
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Lawyers for Meng Wanzhou, Huawei Technologies' chief financial officer, argued Monday that the US conspiracy and fraud charges against her are only a "concern of China" and unrelated to the US. Extraditing Meng from Canada would undermine Chinese sovereignty in international law, they said. Referring to allegations that Meng lied to HSBC bank during a 2013 presentation about a Huawei subsidiary's activities in Iran – the pillar of the US prosecution and extradition request – defense lawyer Gib van Ert said the meeting was in China and should not concern the US or Canada. "If any laws were broken that day, that's the concern of China in whose territory the events occurred," van Ert, a new member of Meng's legal team, told a Canadian court. "What happened on August 22, 2013 in a Hong Kong restaurant between a Chinese national and an Anglo-Chinese bank is – as a matter of international law – no business of the US."
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Tuesday's Shareholder Meetings
Brunner Investment Trust PLC - AGM
Guild Esports PLC - AGM
Keras Resources PLC - AGM
MediaZest PLC - AGM
Nucleus Financial Group PLC - GM re takeover by James Hay
Polar Capital Global Financials Trust PLC - AGM
Power Metal Resources PLC - AGM
Pressure Technologies PLC - AGM
Strategic Equity Capital PLC - GM re continuation and reconstruction
Toople PLC - AGM
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By Tom Waite; thomaslwaite@alliancenews.com
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