(Alliance News) - DIY retailer Kingfisher on Wednesday reported strong second-quarter trading figures following a strong e-commerce performance and the phased reopening of stores France and the UK as lockdown measures eased.
For the second quarter to July 18, group like-for-like sales were up 22% but year-to-date, group like-for-like sales were down 3.7%.
Kingfisher said that based on the strong sales seen to date in the second quarter, combined with cost reductions, it anticipates its half-year adjusted pretax profit to be ahead of the prior year. The retailer posted interim pretax profit of GBP245 million last year.
"While we are entering the second half with a favourable trading backdrop, second half visibility remains low given uncertainty around Covid-19 and the wider economic outlook. As such, no specific financial guidance is provided for financial 2021," the company said.
Kingfisher added: "The operational and financial actions we have taken, together with the strong demand for home improvement we are currently seeing, give us a sound footing in the current crisis and beyond."
The stock was up 7.6% early Wednesday.
Here is what you need to know at the London market open:
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MARKETS
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FTSE 100: down 0.3% at 6,250.67
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Hang Seng: down 0.4% at 25,524.06
Nikkei 225: closed down 0.6% at 22,751.61
DJIA: closed up 159.53 points, or 0.6%, at 26,840.40
S&P 500: closed up 0.2% at 3,257.30
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GBP: soft at USD1.2714 (USD1.2736)
EUR: up at USD1.1528 (USD1.1491)
Gold: up at USD1,859.22 per ounce (USD1,839.86)
Oil (Brent): down at USD44.10 a barrel (USD44.62)
(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
1100 BST Ireland wholesale price index
0700 EDT US MBA weekly mortgage applications survey
0900 EDT US monthly house price index
1000 EDT US existing home sales
1030 EDT US EIA weekly petroleum status report
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Ireland's government has released its "green list" of countries for safe travel, with Italy and Greece included but the UK a notable omission. People arriving from Malta, Finland, Norway, Italy, Hungary, Estonia, Latvia, Lithuania, Cyprus, Slovakia, Greece, Greenland, Gibraltar, Monaco and San Marino will not be required to isolate for two weeks. Others arriving from overseas – with limited exceptions such as essential supply chain workers – are required to fill in a passenger locator form and self-quarantine for 14 days. People crossing the border from Northern Ireland are not subject to restrictions on their movement. The UK was expected to be excluded, as only countries with a coronavirus infection rate the same or lower than Ireland were allowed on the list. Holiday destinations such as France, Spain and Portugal also have been omitted.
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IHS Markit data showed further contraction in Japanese business activity in July, with the country lagging behind the rest of the world in its recovery. The flash Japan purchasing managers' index increased to 43.9 in July from 40.8 in June, the highest it has been since February but still significantly below the 50 mark that would signal expansion rather than contraction. This PMI figure suggested not only a further decline in private sector output but also that Japan is lagging behind other countries since the global PMI for all countries excluding Japan rose to 48.5 by June and was at 46.9 in the developed world.
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BROKER RATING CHANGES
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GOLDMAN SACHS RAISES KINGFISHER PRICE TARGET TO 300 (270) PENCE - 'BUY'
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BERENBERG RAISES EASYJET TO 'BUY' (HOLD) - PRICE TARGET 800 (850) PENCE
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COMPANIES - FTSE 100
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Melrose Industries said revenue declined by 27% in the first half of 2020 in an "extraordinary" trading period that saw the factories of its Automotive and Powder Metallurgy businesses temporarily shut in Europe and the Americas. Melrose said trading was in line with expectations until mid-March and then fell steeply in the second quarter due to Covid-19. After cost cuts, however, Melrose said it generated GBP200 million in free cash flow before restructuring costs and the January acquisition of Forecast 3D, reducing net debt by GBP90 million in the half-year.
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Mexican gold and silver miner Fresnillo said first-half gold production decreased 12% to 381,319 ounces from 432,417 ounces last year due to a lower volume of ore processed at Herradura and Noche Buena mines. Second-quarter gold production was 184,400 ounces, down 6.4% from the first quarter of 2020. The company attributed the fall in production to coronavirus restrictions. Fresnillo said first half silver production was 26.8 million ounces, down 2.7% from last year. As such, Fresnillo said annual gold production is now expected to be in a range of 785,000 ounces to 815,000 ounces, from a previously guided range of 815,000 to 900,000 ounces, as a result of Covid-19 related disruption. Silver production guidance remains in the range of 51 million ounces to 56 million ounces.
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Chilean copper miner Antofagasta said second-quarter copper production was 177,700 tonnes, down 8.4% from 194,000 tonnes in the first quarter. So far in 2020, copper production was 371,700 tonnes, up 4.0% from 387,300 last year. Looking ahead, Antofagasta said group copper production guidance is unchanged at the lower end of the original 725,000 to 755,000 tonnes guidance range, on the basis that no Covid-19 related shutdowns are required during the rest of the year. In addition, capital expenditure for the year is expected to be less than USD1.3 billion, assuming the work on the Los Pelambres Expansion and ZaldÃÂvar Chloride Leach projects ramps-up as expected, the miner added.
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A coronavirus vaccine being developed by the University of Oxford and AstraZeneca should be available globally "at cost price" by year end, the firm's director general said Tuesday. "Our objective is to bring the vaccine to everybody, (and) equally to do so on a not-for-profit basis so we shall be providing the vaccine at cost price," Pascal Soriot told RTL radio. "At cost price that will be about EUR2.5 per unit. "We hope to be able to produce a vaccine by the end of the year... perhaps a little earlier if all goes well" on the back of phase three results expected in the autumn, Soriot added in an interview. Early results of a closely watched Phase 1/2 trial published this week in The Lancet suggest the vaccine candidate is safe and induces an immune response. US group Johnson & Johnson has also vowed to deliver a vaccine at "non-profit" pricing. In contrast rivals Pfizer, Merck & Co and Moderna confirmed Tuesday to US lawmakers they would not sell vaccine at cost.
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COMPANIES - GLOBAL
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ABB said net income substantially improved in its second quarter due to higher expenses the previous year, and it launched a new share buyback programme worth up to USD7.8 billion. The Zurich-headquartered robotics, power, heavy electrical equipment and automation technology company's pretax income for the three months ended June 30 was USD525 million, more than five times the previous year's USD101 million figure. While total revenue dropped to USD6.15 billion from USD7.17 billion, selling, general and administrative expenses fell to USD1.18 billion from USD1.43 billion. This combined with a swing to other net income of USD26 million from a USD450 million such expense to result in higher income for the second quarter.
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Wednesday's Shareholder Meetings
Wincanton PLC - AGM
Mediclinic International PLC - AGM
Mincon Group PLC - AGM
President Energy PLC - AGM
Anexo Group PLC - AGM
LondonMetric Property PLC - AGM
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By Tom Waite; thomaslwaite@alliancenews.com
Copyright 2020 Alliance News Limited. All Rights Reserved.
Kingfisher (KGF)
Melrose (MRO)
easyJet (EZJ)