(Alliance News) - Pennon Group on Friday said it intends to review its strategic options following good performances by both its main units, South West Water and waste business Viridor.
However, Pennon did say revenue is expected to return to a "more normal" level in the first half, ending September, of its current financial year.
Pennon intends to "conduct a full review of its strategic focus, growth options and capital allocation policy".
South West Water continues to deliver strong operational and financial performance, Pennon said, with a focus on efficiency and improving customer service.
However, the company noted the "exceptionally" hot, dry summer last year resulted in higher revenue which has not been repeated this year, and, as a consequence, revenue for the six months to the end of September has reduced to a "more normal" level compared with the first half last year.
Given the good performance in Viridor and South West Water, Pennon has decided to "conduct a full review of the strategic focus, growth options and capital allocation policy for the group".
Pennon shares were up 0.8% in early trade Friday.
Here is what you need to know at the London market open:
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MARKETS
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FTSE 100: up 0.7% at 7,404.46
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Hang Seng: down 0.4% at 25,948.81
Nikkei 225: closed down 0.8% at 21,878.90
DJIA: closed down 79.50 points, 0.3%, at 26,891.12
S&P 500: closed down 0.2% at 2,977.62
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GBP: down at USD1.2292 (USD1.2358)
EUR: soft at USD1.0914 (USD1.0944)
Gold: down at USD1,498.30 per ounce (USD1,507.20)
Oil (Brent): up at USD62.13 a barrel (USD61.78)
(changes since previous London equities close)
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ECONOMICS AND GENERAL
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Friday's Key Economic Events still to come
1100 BST Ireland retail sales index
0930 CEST EU EuroCOIN indicator of euro area economic activity
1100 CEST EU business and consumer surveys
0830 EDT US advance report on durable goods
0830 EDT US personal income and outlays
1000 EDT US University of Michigan index of consumer sentiment
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Consumer confidence in the UK increased in September in the "wait and see run-up" to the October 31 Brexit deadline, according to a survey. The long-running GfK Consumer Confidence Index increased by two points to minus 12, with all five of the survey's measures including personal finances and the general economy showing an uptick in positivity. Expectations for the general economic situation over the next 12 months increased three points to minus 35, eight points lower than September last year.
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None of the UK's biggest cities saw annual property growth hitting 5% or more in August – marking the first time this has happened since 2012 as the market adjusts to more realistic pricing, according to an index. Zoopla's index, which covers house price movements in the UK's 20 biggest cities, found that the fastest rate of year-on-year house price growth in August was in Leicester, at 4.8%, according to Zoopla. It was the first time since December 2012 that the city with the fastest house price growth had an annual rate of price inflation below 5%.
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A US government whistleblower complaint sounded an alarm and accused President Donald Trump of seeking the assistance of Ukraine to smear a rival in the upcoming US election, and also alleged the White House engaged in a cover up. The complaint, which was submitted in August but declassified and released Thursday, warned that "the president of the US is using the power of his office to solicit interference from a foreign country in the 2020 US election". The complaint is based primarily on a phone call Trump held with the newly-elected Ukrainian President Volodymyr Zelensky on July 25. A reconstructed transcript of the call was released by the White House on Wednesday. In the call, Trump asked Zelensky to consider opening a probe into Joe Biden, who is running to be the Democratic nominee for president next year. The request appeared to be an effort by the Republican US president to have Kiev dig up dirt on one of his main rivals. The complaint also alleges the White House sought to "lock down" records of the call.
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BROKER RATING CHANGES
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BERENBERG CUTS CARNIVAL PLC TO 'SELL' ('HOLD') - TARGET 3100 (3800) PENCE
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JEFFERIES CUTS TAYLOR WIMPEY TO 'HOLD' ('BUY') - TARGET 172 (208) PENCE
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JEFFERIES RAISES PERSIMMON TO 'BUY' ('HOLD') - TARGET 2438 (2196) PENCE
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JEFFERIES CUTS BARRATT DEVELOPMENTS TO 'HOLD' ('BUY') - TARGET 696 (734) PENCE
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COMPANIES - FTSE 100
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Westinghouse Electric said it has agreed to buy the North American Civil Nuclear Systems & Services business of Rolls-Royce Holdings. Aircraft engine maker Rolls-Royce said the sale follows a review of the business and is part of a plan to simplify the company. The sale comprises civil nuclear services businesses in the US and Canada along with sites at Mondragon, France and Gateshead, UK, which are currently part of the Power Systems business. It does not include the instrumentation & controls business based in Grenoble, France, Rolls-Royce explained, which remains under review. It also does not include Rolls-Royce's UK nuclear new build operations or small modular reactor activities. Overall, Rolls-Royce operates 11 sites for its civil nuclear business in Canada, France, the UK and the US.
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COMPANIES - FTSE 250
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Residential landlord Grainger reported a "strong" performance in the 11 months to August, with overall renal growth of 3.4% year-on-year. On a like-for-like basis, rental growth on private rental sector homes was 3.1%. Occupancy was strong, Grainger continued, at 97.5% in the private rental sector, and retention rates were "excellent". Grainger is on track with regard to completions, having completed 912 private rental homes in its year ending September 30 with another 1,150 to come. Grainer also unveiled a new private rental sector technology platform, called Connect, which allows customers to carry out renting and living administration on mobile phones or computers. The firm said the platform will support its "major" growth plans.
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James Fisher has signed a "multi-million" pound contract to design and build submarine rescue equipment, including deep search & rescue vehicles, for China Shipbuilding & Offshore International. "This contract award underlines James Fisher's position as market leader in the submarine rescue market, safeguarding the lives of submariners and providing a comprehensive submarine rescue capability to organisations around the world," said Chief Executive Nick Henry.
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COMPANIES - OTHER MAIN MARKET AND AIM
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Veterinary services firm CVS Group reported a 17% fall in pretax profit for the year to June to GBP11.7 million, due to amortisation costs related to acquisitions. The adjusted figure climbed 15% to GBP41.4 million. CVS posted revenue of GBP406.5 million, 24% higher than the year before, and like-for-like revenue was 5.2% higher. It will be paying a dividend of 5.5 pence per share for the year, up 10% on the year before. There was a "significant" second-half improvement, CVS said, making it confident of further progress in the new year.
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Stockbroker Numis said political uncertainty and challenging market conditions, which hindered first-half performance, have continued into the second. UK equity capital markets volumes and trading activity in UK equities have declined "significantly" year-on-year, but Numis expects a "reasonable" second-half performance, with second-half revenue in line with the first half and slightly down year-on-year. As a result, there will be a mid-to-high teens percentage decline in revenue for the year ending September, and a "somewhat greater fall in profit".
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Funeral services provider Dignity has appointed Clive Whiley as chair, effective from Thursday. Whiley, a City veteran, also is chair of retailer Mothercare.
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COMPANIES - INTERNATIONAL
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Anheuser-Busch InBev said its Asia Pacific subsidiary will begin trading in Hong Kong on Monday after raising USD4.9 billion in its initial public offering. The initial public offering of Budweiser APAC, the name of the subsidiary being spun-off, was priced at HKD27.00 per share. Shares in both the Hong Kong and international offering of Budweiser APAC were over-subscribed, the firm said. AB InBev said the proceeds of the offering are roughly HKD38.2 billion, or around USD4.9 billion. If the over-allotment option is exercised in full, AB InBev estimates the additional net proceeds would be approximately HKD5.8 billion, or USD739 million. The brewer intends to apply all of the net proceeds from the offering to repay debt.
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Toyota Motor said worldwide sales rose year-on-year in August, as growing sales inside Japan helped offset declines elsewhere. Total worldwide sales in August reached 887,173, up 2.4% year-on-year, with sales inside Japan - including mini vehicles - up 8.9% at 174,072. Outside of Japan, total sales grew by just 0.9%, and there were sharp declines in the sales of its Daihatsu Motor and Hino Motors subsidiaries. Worldwide production dropped 5.3% to 811,406, the first decrease for Toyota in the past 5 months. The figure includes a 1.4% production drop within Japan and 7.6% drop in production outside of the country. Exports rose 2.6% worldwide to 154,340.
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Friday's Shareholder Meetings
San Leon Energy
Bermele
Mediazest
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By Tom Waite; thomaslwaite@alliancenews.com
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