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(Alliance News) - The following is a summary of top news stories Monday.
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COMPANIES
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Lord Rothermere, the controlling shareholder of Daily Mail & General Trust, is prepared to make an offer to take the newspaper publisher private, if two business disposals currently being discussed take place, the company said. DMGT confirmed it is in discussions to sell its Insurance Risk division, following "enquiries from third parties". It said the terms of the proposed sale would realise a "premium valuation" for DGMT shareholders, and it would return the sale proceeds as a 610 pence per share special dividend. This would be in addition to the direct distribution of shares in used car retailer Cazoo. Following that, Rothermere Continuation would be prepared to make a 251p per share cash offer to take the remainder of DMGT private. This would give an enterprise value to the remainder of DGMT of GBP810 million, the company said. DMGT shares were trading up 3.7% early Monday at GBP1,078.00p. The company has a market capitalisation of about GBP2.2 billion.
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Tate & Lyle said it has agreed to sell a controlling stake in a new company and its subsidiaries, comprising its Primary Products business in North America and Latin America and its interests in the Almidones Mexicanos and DuPont Tate & Lyle Bio-Products joint ventures. The assets will be sold to KPS Capital Partners. Tate & Lyle said it expects to receive gross cash proceeds of USD1.3 billion, resulting in net cash proceeds of USD1.2 billion after adjustments and transaction costs. Following completion, the company said it intends to return GBP500 million to Tate & Lyle's shareholders through a special dividend and associated share consolidation. Completion is expected in the first quarter of 2022. Tate & Lyle and KPS will each own 50% of new company - valued at around USD1.7 billion - with KPS having board and operational control. Tate & Lyle shares were up 1.5% in London on Monday.
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Admiral Group said it expects to award its shareholders following a successful sale of its Penguin Portals and strong performance in the first half of 2021. The Cardiff, Wales-based insurer said it is set to report a higher than expected pretax profit from continuing operations for the six months to the end of June, in the range of GBP450 million to GBP500 million. For the first half of 2020, Admiral posted pretax profit of GBP286.7 million. The strong performance was boosted by "unusually positive" development in the UK motor bodily injury claims which has led to higher reserve releases and profit commission revenue. Admiral's 2021 interim dividend is expected to be in the range of 110 pence to 125p per share, up from 70.5p paid the year before. In addition, Admiral will make a first distribution in relation to the sale of the Penguin Portals comparison businesses, which was completed on April 30.
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Online trading provider Plus500 said its financial position remains robust and cash balances are healthy. The company's revenue in the six months to the end of June was USD346.2 million, down from USD564.2 million posted for the first half of 2020, though up from 148.0 million in the same period of 2019. Customer Income, a key underlying growth metric for Plus500, reached USD379.2 million, lower than USD556.9 million a year earlier but up from USD175.0 million in 2019. Plus500 said 136,980 new customers were onboarded during the recent half year, down from 198,176 a year before but up 47,540 two years before. The company noted that its results reflect regulatory changes implemented in Australia during the period, the impact of which it is still assessing. Plus500 said it remains confident about its performance during the remainder of 2021 and beyond.
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Clothing retailer ASOS has formed a joint-venture with US-based multi-channel retailer, Nordstrom, which will invest for a minority interest in the Topshop, Topman, Miss Selfridge and HIIT brands. ASOS said the joint-venture will help drive the growth of these brands and paves the way for exploration of a new wider strategic partnership aimed at building greater awareness and engagement in the US and Canadian market. Under the joint-venture agreement, ASOS said it will retain operational and creative control, but work with Nordstrom to "leverage its US market expertise and extensive customer reach".
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Atos lowered revenue and profit margin expectations for 2021 after a second-quarter drop in revenue, as the company vowed to accelerate its "transformation". The Bezons, France-based company said revenue growth at constant currency would be "stable", down from the previous expectation of 3.5% to 4.5% growth. Operating margin will be 6.0%, down from between 9.4% to 9.8%. Free cash flow, which was previously guided between EUR550 million to EUR600 million, will now be "positive". That's after organic revenue growth in the second quarter remained negative at -1.5%, the IT services provider said, due to "an accelerated decline of legacy infrastructure business in a context of a much stronger demand for post-COVID cloud migration." Operating margin in the first half was lower than expected at 5.5%. Free cash flow was negative at minus EUR364 million, from minus EUR172 million in the first half of 2020, after a reduction in cash in advance from customers.
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China's financial regulator has blocked a merger of the nation's two largest video game live-streaming sites planned by technology firm Tencent Holdings over antitrust concerns, it said Saturday. Beijing has launched a major crackdown on the biggest players in its tech sector after years of runaway growth and lax regulation, partly due to fears over their growing influence and the security of troves of sensitive consumer data. Analysts have estimated the planned merger of live streaming services Huya and Douyu could have brought the combined platforms' domestic market share to between 80 to 90%. "If Huya and Douyu merged, that would...further strengthen Tencent's dominant position in the video game live-streaming market," Beijing's State Administration for Market Regulation said in an online statement. "This has the effect of eliminating or restricting competition, is not conducive to fair market competition...and is not conducive to the healthy and sustainable development of the online gaming and video game livestreaming market."
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MARKETS
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Asian markets on Monday took heart from a positive close by Wall Street on Friday, but European markets were lower ahead of the New York open, amid continued concerns about the persistence of the Covid-19 pandemic. "The UK is now only a week away from the so-called 'freedom day' where most of the remaining Covid restrictions will be dropped. However, there are growing fears that removal of these restrictions could lead to a resurgence in infections and put the country in a dangerous situation," noted Russ Mould, investment director at AJ Bell.
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CAC 40: down 0.4% at 6,503.91
DAX 30: down 0.2% at 15,659.68
FTSE 100: down 0.8% at 7,068.51
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Hang Seng: closed up 0.6% at 27,515.24
Nikkei 225: closed up 2.3% at 28,569.02
S&P/ASX 200: closed up 0.8% at 7,333.50
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DJIA: called down 0.6%
S&P 500: called down 0.4%
Nasdaq Composite: called marginally higher, up 2.75 points
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EUR: up at USD1.1870 (USD1.1856)
GBP: up at USD1.3872 (USD1.3831)
USD: down at JPY110.07 (JPY110.20)
GOLD: down at USD1,801.36 per ounce (USD1,809.40)
OIL (Brent): down at USD74.63 a barrel (USD75.70)
(currency and commodities changes since previous London equities close)
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ECONOMICS AND GENERAL
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US Treasury Secretary Janet Yellen said Sunday she was "very concerned" about the risk that new variants of coronavirus could pose to the global economic recovery from the pandemic. "We are very concerned about the Delta variant and other variants that could emerge and threaten recovery," she told reporters following a G20 meeting in Venice, Italy. "We are a connected global economy, what happens in any part of the world affects all other countries." In their final statement issued late Saturday, G20 finance ministers warned that the spread of new variants was a "downside risk" to the economic recovery, while also warning of the dangers of differing paces of vaccination campaigns. "We recognise the importance of working together to speed the process of vaccination and have the goal of wanting to vaccinate 70% of the world's population next year," Yellen said.
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Yellen on Sunday also urged the EU to reconsider its plans for a "discriminatory" digital tax, saying the new global reform deal should make it redundant. Meeting in Venice, G20 ministers, including Yellen, on Saturday endorsed a plan agreed by 132 countries to overhaul the way multinational companies, including US digital giants, are taxed. "The agreement that we've reached in the OECD framework discussion calls on countries to agree to dismantle existing digital taxes that the US has regarded as discriminatory and to refrain from erecting similar measures in the future," Yellen told reporters. "So it's really up to the European Commission and the members of the EU to decide how to proceed. But those countries have agreed to avoid putting in place in the future and to dismantle taxes that are discriminatory against US firms." Yellen is due in Brussels on Monday for talks with Eurozone finance ministers. Negotiations at the Organisation for Economic Cooperation & Development secured a historic agreement on July 1 for a global minimum corporate tax rate of at least 15%, and to allow nations to tax a share of the profits of the world's biggest companies regardless of where they are headquartered.
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The EU has hit its target of delivering enough coronavirus vaccines to cover 70% of the adult population, EU Commission President Ursula von der Leyen said Saturday. The 27 EU member state governments are responsible for administering the vaccines to citizens – and some are working much faster than others – but von der Leyen stressed that: "The EU has kept its word." The EU joint vaccine purchasing scheme, run by von der Leyen's European Commission, has delivered 330 million BioNTech-Pfizer shots, 100 million AstraZeneca, 50 million Moderna and 20 million Johnson & Johnson. All but the J&J jab require two doses to achieve full efficacy, and the EU is home to an estimated 366 million adults.
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England is "tantalisingly close" to lifting all remaining coronavirus restrictions, UK Prime Minister Boris Johnson has said, as he is expected to push ahead with the next stage of unlocking. The prime minister will host a press conference on Monday where he is expected to say that the country can move to step four of the plan to lift measures, including ending the legal requirement to wear masks. But he will also warn cases will rise as rules designed to suppress the coronavirus are removed. Johnson will host a press conference on Monday afternoon while Health Secretary Sajid Javid will announce the plans in Parliament.
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Wholesale prices in Germany rose at the fastest rate in four decades in June, according to data released by the Federal Statistics Office. Wholesale price inflation accelerated to 11% year-on-year in June, from 9.7% in May. The annual figure is the fastest rate of inflation since October 1981. The figure partly reflects a low base from June 2020, when prices were depressed in the first months of the pandemic. In that month, prices fell 3.3% from the previous year. Even so, the month-on-month increase was 1.5%.
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China has said it will take "necessary measures" to respond to the US blacklisting of Chinese companies over their alleged role in abuses of Uighur people and other Muslim ethnic minorities. The Commerce Ministry said the US move constituted an "unreasonable suppression of Chinese enterprises and a serious breach of international economic and trade rules." China will "take necessary measures to firmly safeguard Chinese companies' legitimate rights and interests," the ministry's statement said. No details were given, but China has denied allegations of arbitrary detention and forced labour in the far western region of Xinjiang and has increasingly responded to sanctions against companies and officials with its own bans on visas and financial links.
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Japan's machine tool orders growth slowed in June, preliminary figures from Japan Machine Tool Builders' Association showed. Machine tool orders in June rose 97% after more than doubling in the same month the year prior, both from pandemic-hobbled comparison months in 2020. On a month-on-month basis, machine tool orders rose by just 2.5%. This was helped by domestic orders, which spiked 18%, after a 2.2% decline in May. In contrast, foreign orders fell for the first time in a year, by 4.5%, after a 2.7% increase in May.
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By Tom Waite; thomaslwaite@alliancenews.com
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