(Alliance News) - Melrose Industries on Thursday touted the success of its contentious acquisition of engineering firm GKN.
Melrose, which specialises in acquiring and turning around industrial companies, reported a narrowed loss amid what it called a pleasing performance from the GKN businesses since their purchase in GBP8.4 billion hostile takeover last year.
Melrose's group revenue for the six months to the end of June came in at GBP5.70 billion, triple the GBP1.85 billion achieved a year ago. The group's pretax loss narrowed to GBP128 million from GBP372 million.
Melrose said it is trading in line with expectations for 2019, with the three main divisions of GKN on track to achieve their targets.
Having owned the GKN business for just over a year, Melrose said it is pleased with how they have responded to initial investments and initiatives.
Melrose declared an interim dividend of 1.7p per share, up 10% year-on-year.
"These results show the initial fruits of the 'improve' stage of Melrose's ownership of GKN and, with the overall GKN margin increasing positively, we are excited about what is possible. The performance is in line with expectations and leverage is better than expected," said Chair Justin Dowley.
Here is what you need to know at the London market open:
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MARKETS
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FTSE 100: called up 20.94 points, 0.3%, at 7,332.20
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Hang Seng: down 0.6% at 26,354.04
Nikkei 225: closed up 2.1% at 21,085.94
DJIA: closed up 237.45 points, 0.9%, at 26,355.47
S&P 500: closed up 1.1% at 2,937.78
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GBP: up at USD1.2214 (USD1.2193)
EUR: flat at USD1.1021 (USD1.1027)
Gold: flat at USD1,546.94 per ounce (USD1,546.70)
Oil (Brent): flat at USD60.57 a barrel (USD60.50)
(changes since previous London equities close)
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ECONOMICS AND GENERAL
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Thursday's Key Economic Events still to come
0900 BST UK monthly car registrations figures
1100 BST Ireland industrial production and turnover
0730 EDT US Challenger Job-Cut Report
0815 EDT US ADP National Employment Report
0830 EDT US unemployment insurance weekly claims report - initial claims
0945 EDT US services PMI
1000 EDT US ISM non-manufacturing report on business
1000 EDT US manufacturers' shipments, inventories & orders
1030 EDT US EIA weekly natural gas storage report
1100 EDT US EIA weekly petroleum status report
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The UK government has paved the way for proposals seeking to block a no-deal Brexit on October 31 to become law before Parliament is suspended. Lord Ashton of Hyde, Conservative chief whip in the Lords, announced the breakthrough following talks with Labour after a lengthy procedural battle threatened to run through the night. He said all stages on the EU (Withdrawal) (No. 6) Bill will be completed in the Lords by 5pm on Friday. He added his Commons counterpart Mark Spencer has agreed time will be made for any amendments by peers to be considered on Monday. It is unclear what led to a breakthrough given the strong opposition of Boris Johnson's government to the Bill in the Commons. The proposed legislation requires a delay to Brexit beyond October 31 unless a divorce deal is approved or Parliament agrees to leaving the EU without one by October 19. This came after Johnson's snap general election plan was roundly rejected by MPs and his bid to keep a no-deal Brexit on the table suffered a major blow. The government failed to secure the support of two-thirds of MPs for an early election, with the Commons voting 298 to 55, 136 short of the number needed.
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Britain's manufacturers are suffering a "nosedive" as a perfect storm of Brexit uncertainty, slowdown in major markets and trade wars takes its toll, a new study suggested. A survey of almost 300 firms by manufacturers organisation Make UK and business advisory firm BDO LLP indicated that a weaker currency is not helping, with export orders down despite prices falling. The report said all the indications were that foreign customers are not buying British goods even though they are 6% cheaper than this time last year.
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Top Chinese and US trade officials have agreed to meet in October to discuss solutions to their year-long trade war, the Chinese Commerce Ministry said. Chinese Vice Premier Liu He spoke on the phone with US Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin. Their last call had been on August 13, the Commerce Ministry said. The officials had decided then to meet in September in Washington, but since then the US and China have imposed new sets of tariffs on each other, with previous arrangements falling through.
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Washington announced new import duties on more than USD1 billion in imported structural steel from China and Mexico, saying manufacturers in those countries dumped product on the US market. The Commerce Department's findings, which are preliminary and could be reversed, follow a similar decision in June concerning Chinese alloy aluminium imports valued at nearly USD1 billion. Chinese and Mexican producers allegedly dumped fabricated structural steel – such as I-beams, rods and joists – at margins of between 0% and 141.4%, the Commerce Department said. The department said it had rejected such allegations concerning similar products from Canada, however.
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Hurricane Dorian, back to a category three storm, has begun raking the south-east US seaboard. It is threatening to inundate low-lying coasts from Georgia to south-west Virginia with a dangerous storm surge after its deadly mauling of the Bahamas. Dorian had crashed into the island nation as its strongest hurricane on record earlier this week, but had weakened greatly since – down from a category five to a category two storm before increasing again late on Wednesday. It still boasts dangerously high winds of 115 mph as it is sideswiping the coasts of Georgia and North and South Carolina.
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Iranian President Hassan Rowhani said Iran's nuclear programme will be "without limits" when it launches the third phase of its withdrawal from the 2015 nuclear deal on Friday. "In the third phase the Iranian nuclear agency starting Friday will implement without limits everything that is needed for the expansion of domestic nuclear technology and scientific research," Rowhani said Wednesday evening. He assured, however, that parties to the nuclear deal would have another two months to fully implement the terms of deal. If that happens, Iran would also reverse course and return to implementing the agreement.
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BROKER RATING CHANGES
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DEUTSCHE BANK RAISES CRH TO 'BUY' (HOLD) - PRICE TARGET 35 (31) EUR
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JEFFERIES RAISES JOHN WOOD GROUP TO 'HOLD' ('UNDERPERFORM') - TARGET 370 PENCE
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COMPANIES - FTSE 100
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The latest FTSE index review saw Marks & Spencer kicked out of the FTSE 100, effective from September 23. Also relegated were Direct Line Insurance and Micro Focus International. Replacing them in the blue-chip index will be Hikma Pharmaceuticals, Meggitt and Polymetal International.
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COMPANIES - FTSE 250
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Electronics retailer Dixons Carphone said it is on track to meet its annual targets despite a challenging market for mobile phones. UK & Ireland electricals like-for-like sales were up 2% in the 13 weeks to July 27, with International sales up 4%. However, UK & Ireland mobile comparable revenue was down 10% in "what continues to be a challenging traditional postpay market", meaning phones purchased on monthly contracts. Despite this, Dixons said it is on track for both its trading this year and its longer-term transformation plans. "The current political and economic climate is volatile but, assuming no material disruption from that, we stand by our full-year guidance, as we do our longer-term commitments on EBIT margin and cashflow," said Chief Executive Alex Baldock. On a reported basis, Dixons group sales were flat in the period.
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Transport operator Go-Ahead Group said its annual results in both bus and rail were slightly ahead of forecasts. Revenue for the year to June 29 rose 10% to GBP3.81 billion, though pretax profit fell by a third to GBP97.0 million. Before exceptional items, profit fell more modestly, by 7.6%, to GBP113.8 million. Go-Ahead proposed a flat payout of 102.08p. Bus operating profit before exceptional items was up 4.7% at GBP95.7 million, while Rail operating profit nearly halved to GBP25.4 million from GBP44.5 million.
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William Hill said it has promoted Chief Digital Officer Ulrik Bengtsson to the role of chief executive, effective from the end of September. Philip Bowcock, currently CEO, will step down on that date. "This change is part of William Hill's succession planning and consistent with the group's strategy of becoming a digitally led and internationally diverse gambling company," the firm explained. William Hill Chair Roger Devlin added that Bengtsson is "ideally suited to lead our next phase of growth".
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Among stocks joining the FTSE 250 as part of the quarterly review announced Wednesday are recent IPOs Finablr, Trainline and Watches of Switzerland, while leavers all were prominent names very much in the news of late: Woodford Patient Capital Trust, Ted Baker, Metro Bank, Intu Properties, Funding Circle Holdings and Amigo Holdings.
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COMPANIES - OTHER MAIN MARKET AND AIM
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Online fashion retailer boohoo said it expects results for the current financial year to be ahead of previous guidance. boohoo expects sales growth of between 33% and 38%, versus 25% to 30% seen previously. Its earnings before interest, tax, depreciation and amortisation margin should remain at around 10%, in line with previous guidance. The firm said its performance has been ahead of expectations with strong revenue growth driving operating leverage across its key brands.
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COMPANIES - INTERNATIONAL
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The head of crisis-hit Japanese automaker Nissan Motor admitted he received more pay than he was entitled to but denied wrongdoing, as the firm's former chief faces financial misconduct charges. Nissan is already mired in scandal over the arrest and ouster of ex-boss Carlos Ghosn, who is accused of wrongdoing including misrepresenting his compensation. And on Thursday, the current chief executive officer, Hiroto Saikawa, acknowledged he had received pay to which he was not entitled. "I left the issue to someone else so I had thought it was dealt with in an appropriate manner," he told reporters in Tokyo. But he denied any wrongdoing and said he would return the excess payments.
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Samsung Electronics said it will launch its hotly anticipated first foldable smartphone on Friday, months after faulty screens forced an embarrassing delay of its release. The world's largest smartphone maker spent nearly eight years developing the Galaxy Fold, but had to hold its launch in April after reviewers reported screen problems within days of use. It was a major setback for the firm, which was hoping to spark demand for its high-end phones with the launch of the USD2,000 device, with profits plunging in recent quarters in the face of a weakened market and strong competition from Chinese rivals. After months of "refining" the Galaxy Fold – which is ready for use on high-speed 5G networks in some markets – Samsung said it will release the smartphone in South Korea on Friday, followed by select countries including the US, Germany and France.
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Steel maker ArcelorMittal said a legal issue which could have forced it to pull out of a plant in Italy had been resolved after the government changed the law. The Italian parliament had in June revoked a period of legal immunity initially given to the company to allow it to bring the plant up to environmental standards, saying it would instead expire on September 6. Wednesday's new decree law reverses that decision, essentially reinstating the immunity. ArcelorMittal had warned it would not be able to continue at the steelworks in Taranto – Italy's most polluting plant – without it.
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Thursday's Shareholder Meetings
Dixons Carphone
Carpetright
Avanti Communications (re delisting)
FIH Group
Myanmar Strategic Holdings
Carclo
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Wood Group (J) (WG.)
Melrose (MRO)
CRH (CRH)
