(Alliance News) - Building materials company CRH on Tuesday reported a "strong performance" in the first nine months of the year, while predicting "solid market fundamentals" in 2020.
CRH said it expects to report earnings before interest, tax, depreciation and amortisation for 2019 in excess of EUR4.15 billion, up 23% from EUR3.37 billion in 2018. The Irish company credited "positive momentum" in all divisions, contributions from acquisitions, the impact of a new accounting treatment of leases, and currency tailwinds.
As a result, CRH said it expects to report full-year pretax profit ahead of 2018's EUR1.9 billion.
It said nine-month like-for-like sales in its key Americas Materials business were up 4% from a year before, helped by better weather conditions in the third quarter than seen in the first half. It also reported continued positive trends in both the Europe Materials and Building Products divisions.
The stock was up 1.3% early Tuesday in London.
Here is what you need to know at the London market open:
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MARKETS
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FTSE 100: up 0.2% at 7,410.35
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Hang Seng: down 0.2% at 26,939.21
Nikkei 225: closed up 0.4% at 23,373.32
DJIA: closed up 190.85 points, 0.7%, at 28,066.47
S&P 500: closed up 0.8% at 3,133.64
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GBP: down at USD1.2885 (USD1.2906)
EUR: flat at USD1.1014 (USD1.1008)
Gold: down at USD1,455.00 per ounce (USD1,457.22)
Oil (Brent): firm at USD63.57 a barrel (USD63.26)
(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
0830 EST US advance US International trade in goods
0855 EST US Johnson Redbook retail sales index
0900 EST US monthly and quarterly house price indices
0900 EST US S&P CoreLogic Case-Shiller indices
1000 EST US consumer confidence index
1000 EST US new residential sales
1000 EST US Richmond Fed business activity survey
1630 EST US API weekly statistical bulletin
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Top US and Chinese negotiators held phone talks on Tuesday and agreed to keep in touch over "remaining issues" for a "phase one" trade deal between the two countries, Chinese state media said. US President Donald Trump had announced last month that the two sides had reached an initial agreement, but the deal is yet to be finalised. Chinese Vice Premier Liu He spoke on the phone Tuesday morning with US Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin, the official Xinhua news agency reported. "The two sides discussed solving issues regarding each other's core concerns, reached consensus on properly resolving related issues, and agreed to maintain communication on remaining issues in consultations on the 'phase one' deal," it said, without providing more details. The Chinese government had issued on Sunday a directive to strengthen the protection of intellectual property and increase penalties for violators – a major sticking point in the US-China trade talks.
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Hong Kong leader Carrie Lam pledged not to give in to protester's demands, even after the city's pro-democracy camp won a landslide victory in district council elections. Some 2.7 million residents cast their vote in a show of overwhelming support for the democracy camp, in an embarrassment for the government and Beijing. The vote transferred control of 17 out of 18 Hong Kong districts to pro-democracy groups for the first time ever, and is widely seen as a referendum on the protest movement and a sign that much of the city still supports demonstrations. Lam told reporters on Tuesday that while "voters wanted to express their views" including dissatisfaction with the government, Hong Kong could "no longer tolerate violence on the streets," signalling that she would continue to resist protest demands.
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America's monetary policy is set to continue the good times for workers while nudging inflation back to where officials would like to see it, the US Federal Reserve chief said. The remarks from Federal Reserve Chairman Jerome Powell underscored central bankers' view that they are likely to hold their fire for the coming months after cutting interest rates three times this year. "Monetary policy is now well positioned to support a strong labour market and return inflation decisively to our symmetric 2% objective," Powell said in a speech to the Greater Providence Chamber of Commerce in Rhode Island. In a look back at developments over the year, Powell said that, while the outlook appeared healthy now, there had been some scares during 2019. Weakening global growth and President Donald Trump's trade wars together hit US exports, weakened the manufacturing sector and sapped business confidence, which weighed down corporate investments. "At this point in the long expansion, I see the glass as much more than half full," he said, according to prepared remarks, adding that, with the right policies "we can fill it further".
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BROKER RATING CHANGES
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HSBC RAISES HISCOX TO 'BUY' ('HOLD') - TARGET 1465 (1478) PENCE
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CITIGROUP CUTS AVIVA TO 'NEUTRAL' ('BUY') - TARGET 414 (460) PENCE
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BERENBERG CUTS EASYJET TO 'HOLD' (BUY) - PRICE TARGET 1410 (1260) PENCE
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GOLDMAN RAISES TATE & LYLE TO 'BUY' ('NEUTRAL') - TARGET 830 (820) PENCE
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COMPANIES - FTSE 100
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Catering firm Compass Group said it delivered strong annual results as it raised its annual dividend. For the financial year ended September 30, revenue rose 8.8% to GBP24.88 billion from GBP22.87 billion the year before, but pretax profit slipped 3.5% to GBP1.47 billion from GBP1.52 billion last year. Operating profit slipped to GBP1.60 billion from GBP1.69 billion last year, but underlying operating profit came in at GBP1.88 billion, up from from GBP1.74 billion last year. The underlying figure was in line with the company-supplied consensus market expectation. Compass reported annual organic revenue growth of 6.4%, accelerating from 5.5% last year. The figure was in line with consensus estimates. Compass raised its annual dividend by 6.1% to 40 pence from 37.7 pence. The company said its outlook for the new year remains strong and expects financial 2020 organic growth around the mid-point of a 4% to 6% guidance range.
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COMPANIES - FTSE 250
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Sandwich maker Greencore said it delivered a resilient performance against the backdrop of a subdued UK trading environment and uncertainty over Brexit. For the financial year ended September 30, revenue fell 3.5% to GBP1.44 billion from GBP1.50 billion, but pretax profit surged to GBP56.4 million from GBP17.8 million last year. Adjusted pretax profit rose 16% to GBP95.3 million from GBP79.6 million the year before. The company proposed a total dividend of 6.20p, up 11% from 5.57p last year. In terms of outlook, Greencore's medium-term financial goals are for mid single-digit organic revenue growth and high single-digit adjusted earnings per share growth. "Over the past twelve months we have fundamentally reset our business, anchored by a clear strategy to drive shareholder value by expanding our category and channel capabilities within the diverse, growing and attractive UK food to go market. The evidence of this can be seen in the launch of multiple commercial and innovation projects with key customers, and in the recent acquisition of Freshtime. As a result of this reset strategy, we anticipate another year of profitable growth in 2020," said Chief Executive Officer Patrick Coveney.
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COMPANIES - INTERNATIONAL
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Google on Monday fired four employees on the grounds they violated data security policies, prompting ire among colleagues concerned it was retaliation for worker organizing. One of the workers fired was connected to a petition against Google working with the US immigration and border patrol agency. She confirmed her firing in a message posted on Twitter. A memo to employees titled "Securing our data" sought to correct what it contended was misinformation about the purported wrongdoing, saying it involved "systematic searches for other employees' materials and work", according to reports by US media. Google, the money-making engine of parent company Alphabet, confirmed a copy of the note published by Bloomberg but declined to comment further. However, a Medium account connected to a massive walkout by Google employees last year argued that the four workers were fired in an attempt to crush efforts to organize staff.
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Tuesday's Shareholder Meetings
London Stock Exchange Group (re acquisition of Refinitiv)
Revolution Bars Group
Clinigen Group
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By Tom Waite; thomaslwaite@alliancenews.com
London Briefing is available to subscribers as an email newsletter. Contact info@alliancenews.com
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