(Alliance News) - Antivirus software firm Avast on Wednesday posted positive results, as it nears a takeover by larger US peer NortonLifeLock.
Avast said its recent half-year performance was resilient considering a strong prior-year comparison.
For the six months to June 30, revenue was up 8.8% at USD471.3 million from USD433.1 million the year before, and pretax profit was USD269.3 million, more than double from USD115.3 million.
In addition, billings were USD482.7 million, up 2.9% from USD469.1 million the year prior.
Avast declared an interim dividend of 4.8 cents per share.
"We are optimistic about Avast's prospects for the second half of the year, and as comparator period trends start to normalise, we anticipate a re-acceleration of billings growth. The launch of our new flagship Avast One product remains on track for later this year. Our focus remains on driving customer engagement, acquisition and retention, which will require higher levels of margin investment in R&D, innovation and marketing over the medium term," said Chief Executive Officer Ondrej Vlcek.
Late Tuesday, US cybersecurity firm NortonLifeLock said it agreed with Avast on the terms of a merger. The deal is in the form of a cash and share takeover offer by Norton for Avast. Under the terms of the merger, Avast shareholders will be entitled to receive a combination of cash and newly issued shares in Norton.
Based on Norton's closing share price of USD27.20 on July 13, being the last trading day for NortonLifeLock shares before combination talks were revealed on July 14, the merger values Avast between USD8.1 billion and USD8.6 billion, depending on Avast shareholders' elections.
NortonLifeLock, which was formerly known as Symantec, said it and Avast believe that the merger has "compelling strategic and financial rationale and represents an attractive opportunity to create a new, industry-leading consumer cyber safety business".
Avast shares were up 3.3% at 587.00 pence
Still to come on Wednesday morning are half-year results from insurer Prudential.
Here is what you need to know at the London market open:
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MARKETS
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FTSE 100: up 0.4% at 7,192.86
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Hang Seng: up 0.2% at 26,659.31
Nikkei 225: closed up 0.7% at 28,070.51
DJIA: closed up 162.82 points, or 0.5%, at 35,264.67
S&P 500: closed up 0.1% at 4,436.75
Nasdaq Composite: closed down 0.5% at 14,788.09
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EUR: down at USD1.1710 (USD1.1724)
GBP: down at USD1.3825 (USD1.3847)
USD: up at JPY110.75 (JPY110.52)
Gold: up at USD1,731.05 per ounce (USD1,726.99)
Oil (Brent): flat at USD70.93 a barrel (USD70.92)
(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 consumer price index
1030 EDT US EIA weekly petroleum status report
1400 EDT US monthly Treasury statement
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German inflation was confirmed as accelerating to its highest rate in nearly 20 years, data from Destatis showed. The consumer price index for July jumped 3.8% on a year-on-year basis, rocketing from price growth of 2.3% in June and confirming preliminary figures. German inflation was last this strong in December 1993, when the annual rate hit 4.3%. Energy product prices jumped 12% annually in July. Month-on-month, German consumer prices rose 0.9% in July. This was more than double the 0.4% rate of growth posted for June and in line with preliminary forecasts.
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BROKER RATING CHANGES
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LIBERUM RAISES IAG TO 'BUY' (HOLD) - PRICE TARGET 215 PENCE
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BERENBERG CUTS M&G TO 'HOLD' ('BUY') - TARGET 250 PENCE
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RBC RAISES FLUTTER ENTERTAINMENT PRICE TARGET TO 17,500 (16,000) PENCE - 'OUTPERFORM'
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BARCLAYS RAISES WATCHES OF SWITZERLAND TARGET TO 1,115 (915) PENCE - 'OVERWEIGHT'
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COMPANIES - FTSE 100
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Spirax-Sarco Engineering reported a strong first-half performance. For the six months to June 30, revenue rose 13% to GBP643.7 million from GBP569.7 million last year, and pretax profit increased to GBP150.0 million, up 41% from GBP106.3 million. Spirax-Sarco declared an interim dividend of 38.5 pence, up 15% from 33.5p paid last year. Looking ahead, the Cheltenham-based firm expects its second half operating margin to be similar to the first half margin of 24%. CEO Nicholas Anderson said: "A strong recovery of global industrial production in the first half of this year, combined with exceptional Covid-19 vaccine related demand in Watson-Marlow, has supported strong organic sales and profit growth across all three businesses." He added: "This excellent first-half execution underpins our improved full-year profit outlook."
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National Grid and SSE noted the provisional decision by the UK competition regulator on appeals they had filed against the RIIO-2 price control. Both noted the Competition & Markets Authority upheld their appeal over the so-called 'outperformance wedge' but not on the cost of equity. Both said they will discuss the provision ruling with the CMA ahead of its final determination in October.
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COMPANIES - FTSE 250
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Asthma treatment firm Vectura noted the decision by Carlyle, which it announced late Tuesday, to not increase its cash offer of 155p per Vectura share. This means the auction against Philip Morris International has been cancelled. PMI has until Thursday afternoon to revise its own takeover offer of 165p, which values Vectura at GBP1.02 billion. At that point, Vectura said it will make a further announcement. The Vectura board hasn't yet accepted PMI's offer, having withdrawn its support for Carlyle's lower offer.
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COMPANIES - MAIN MARKET AND AIM
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Deliveroo hailed a strong first half in the wake of its disappointing stock market debut earlier this year. For the six months to June 30, revenue rose 82% to GBP922.5 million from GBP507.4 million in the prior year, and its pretax loss narrowed to GBP104.8 million from GBP128.4 million. During the period, Deliveroo said gross transaction value was up 99% at GBP3.39 billion from GBP1.70 billion, and orders jumped to 148.8 million from 74.5 million. GTV is defined by the company as the total value paid by consumers, excluding any discretionary tips. Looking ahead, Deliveroo raised its annual GTV growth guidance in a range of 50% to 60%, up from 30% to 40%. Deliveroo declared no interim dividend, in line with year before. "As reflected in our guidance, whilst we expect that consumer behaviour may moderate later in the year, we remain excited about the opportunity ahead and our ability to capitalise on it," said CEO & founder Will Shu.
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COMPANIES - GLOBAL
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Commonwealth Bank of Australia unveiled a AUD6 billion share buyback as it reported a jump in full-year profit. Cash net profit after tax was AUD8.65 billion - equivalent to around USD6.35 billion - for the financial year that ended June 30, up 20% on the year before due to improving economic conditions and outlook, which resulted in a lower loan impairment expense and a "strong" operational performance. The Sydney-based bank took a loan impairment expense of AUD554 million for the year, down 78% on AUD2.52 billion the year before. Total operating income rose 2% to AUD24.16 billion, with net interest income edging up 1% to AUD18.84 billion. CBA declared a final dividend of AUD2.00, bringing the year's total to AUD3.50, up 17% on last year, alongside the share buyback plan.
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Struggling Hong Kong carrier Cathay Pacific reported a USD972 million net loss in the first six months of 2021 as the pandemic continues to hammer demand for travel. And while the figure is an improvement on the USD1.3 billion loss suffered in the same period last year, the airline said the outlook remained uncertain owing to ongoing struggles to battle the disease. Chairman Patrick Healy said 2021 continues to be the "toughest period" in the airline's 70-year history, but the progress of global vaccination drives provided some encouragement for the industry. "Covid-19 will continue to have a severe impact on our business until borders progressively open and travel constraints are lifted," he warned. With no domestic market to fall back on, Cathay Pacific has been among the worst hit of the major global airlines.
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Wednesday's Shareholder Meetings
Block Energy PLC - GM re investor resolution to replace chair
Mountview Estates PLC - AGM
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By Tom Waite; thomaslwaite@alliancenews.com
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