(Alliance News) - Electricity utility SSE on Tuesday lifted annual guidance and said it does not have any supply pacts with Russian counterparts.
SSE lifted its adjusted earnings per share guidance for the financial year, which ends on Thursday, amid a backdrop of energy market volatility.
It expects adjusted EPS in the range of 92 and 97 pence, up from the previous 90p guidance. It could represent a rise of much as 11% from 87.5p in financial 2021.
Dividend guidance was unchanged, remaining linked with the retail price index for now. SSE will pay 81p per share plus RPI for this year. It will have an RPI-linked payout for the following year before a rebase to 60p in financial 2024 after.
In addition, SSE said unfavourable weather has led to a "shortfall in output from renewable sources" since it updated on its third quarter in early-February.
Renewables output was 19% below expectations in the nine months ended December 31. This has eased to 12% below forecasts as of March 22.
On Russia, the company added: "SSE does not have any energy supply contracts with Russian counterparties, and we are ceasing trading activities with these entities.
"The war has had significant consequences for energy markets and policy, contributing to historically high and volatile prices. However, SSE has so far been served well by its prudent hedging approach and has successfully managed any increasing credit and collateral requirements."
The impact of a prolonged conflict, or an escalation, is "difficult to predict", however, it said.
SSE shares were up 1.0% early Tuesday.
Here is what you need to know at the London market open:
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MARKETS
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FTSE 100: up 0.5% at 7,512.79
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Hang Seng: up 0.9% at 21,884.22
Nikkei 225: closed up 1.1% at 28,252.42
S&P/ASX 200: up 0.8% at 7,469.90
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DJIA: closed up 94.65 points, or 0.3%, at 34,955.89
S&P 500: closed up 32.46 points, or 0.7%, at 4,575.52
Nasdaq Composite: closed up 185.60 points, or 1.3%, at 14,354.90
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EUR: up at USD1.1003 (USD1.0973)
GBP: up at USD1.3102 ((USD1.3090)
USD: flat at JPY123.35 (JPY123.32)
Gold: down at USD1,924.61 per ounce (USD1,937.20)
Oil (Brent): up at USD111.70 a barrel (USD111.48)
(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
0930 BST UK monetary & financial statistics
0900 EDT US monthly house price index
1000 EDT US consumer confidence index
1000 EDT US job openings & labour turnover survey
1630 EDT US API weekly statistical bulletin
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Ukrainian forces recaptured a key Kyiv suburb and desperately clung onto control of the besieged city of Mariupol, as negotiators prepared to meet Russian counterparts for face-to-face talks in Istanbul on Tuesday. Troops "liberated" the suburban town of Irpin, Interior Minister Denys Monastyrsky said, wresting a key gateway to the capital's northwest from Russian control. Turkish President Recep Tayyip Erdogan told Russian and Ukrainian delegations due to resume face-to-face talks that "both parties have legitimate concerns". The talks were due to kick off shortly at the Dolmabahce palace in Istanbul to try and end a war has killed an estimated 20,000 people and forced more than 10 million from their homes.
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People who attended alleged lockdown-breaking parties at Downing Street and the Cabinet Office are reportedly braced for an initial tranche of fines from the Metropolitan Police. The Guardian has suggested the fixed penalty notices will be issued "imminently", while other outlets have reported they are due to surface soon. The force is investigating 12 events, including as many as six that UK Prime Minister Boris Johnson is said to have attended. Last week it emerged that detectives investigating alleged parties had begun interviewing key witnesses.
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BROKER RATING CHANGES
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Deutsche Bank research cuts Royal Mail to 'sell' (buy) - price target 275 (680) pence
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Barclays raises Admiral to 'overweight' (equal weight) - price target 3,050 (3,061) pence
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JPMorgan cuts Barclays to 'neutral' (overweight) - price target 170 (220) pence
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COMPANIES - FTSE 100
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Chemicals maker Croda International outlined its aim to lift the fortunes of its Consumer Care arm. Croda, ahead of hosting an investor day on Tuesday, said it is focused on "accelerating growth in its Consumer Care sector". "The event will focus on how Consumer Care has evolved significantly in recent years to become a highly differentiated sector for Croda, comprising four business units, each with leading market positions in fast growth niches," the company said. The personal care arm, which part of Consumer Care, includes the Sederma skin care brand. The unit was bolstered by the EUR820 million acquisition of Spanish fragrances firm Iberchem, announced in November 2020. By 2025, Croda targets sales of GBP1 billion in Consumer Care, up from GBP763 million in 2021. "In the coming years, Consumer Care expects to deliver a minimum of 5% annual sales growth, with synergies from the recent fragrances & flavours acquisitions in addition to this. In 2022, there is likely to be an additional benefit to sales from the successful recovery of cost inflation," the company said. Croda added that the unit's trading in the first three months of 2022 has been "robust".
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Miner Rio Tinto said it has completed the acquisition of the Rincon lithium project in Argentina for USD825 million, having received approval from Australia's Foreign Investment Review Board. The purchase, from private equity firm Sentient Equity Partners, was first was announced back in December. Rincon is a undeveloped lithium brine project in the 'lithium triangle' in Salta Province. "Rincon strengthens our battery materials business and positions Rio Tinto to meet the double-digit growth in demand for lithium over the next decade, at a time when supply is constrained," said Chief Executive Jakob Stausholm.
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COMPANIES - FTSE 250
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Workspace may face a competing offer for fellow property firm McKay Securities. Slate Asset Management has asked for access to due diligence information in order to consider making an all-cash offer for McKay. Both Workspace and McKay noted that no takeover proposal has been made by Slate, though McKay said it would consider one. For now, the McKay board continues to recommend the GBP272 million cash-and-shares offer from Workspace and a shareholder vote on this is scheduled for April 27.
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Housebuilder Bellway said revenue in first half ended January 31 rose 3.5% to GBP1.78 billion from GBP1.72 billion. Pretax profit climbed 9.8% to GBP307.6 million from GBP280.2 million a year earlier. It lifted its by payout 29% to 45.0 pence from 35.0p. For the full year, it expects dividend cover to be three times its underlying earnings. This will be reduced to 2.5 times by financial 2024, Bellway said. It thinks this would represent a "prudent and sustainable level, supported by strong investment returns and enhanced cash generation". Bellway backed annual guidance of completing 11,100 new homes, up from 10,138 homes in the prior financial year. In the first half of financial 2022, it completed 5,694 new homes, up 0.7% annually from 5,656.
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Deliveroo has joined forces with WHSmith as it continues to expand further from its traditional takeaway delivery business. The online delivery operator said it will be able to deliver a raft of products, from printer cartridges to bestselling novels, to customers in 20 minutes. It is Deliveroo's first major leap into general merchandise although the company has rapidly grown its retail operation since the pandemic struck, linking up with supermarkets such as J Sainsbury and Waitrose. WHSmith is launching the partnership on Tuesday in Reading, Berkshire, and will roll this across nine more stores over the next week. The trial will offer about 600 WHSmith products to customers.
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COMPANIES - MAIN MARKET AND AIM
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Irn-Bru maker AG Barr posted a substantial earnings rise for a year in which it resumed payouts. Revenue in the year to January 30 rose 18% to GBP268.6 million from GBP227.0 million. Pretax profit was 62% higher at GBP42.2 million from GBP26.0 million. AG Barr proposed a 10p final payout, taking its ordinary dividend for the year to 12p. It had also paid a 10p one-off special dividend in October. The soft drinks company had paid out nothing in financial 2021 and 4.00p in financial 2020. "Like most companies we are facing significant inflationary pressures, but we are well-placed as a group to deal with these and will continue to seek to manage our exposure proactively through mitigating actions across revenue management, pricing, procurement and cost control," Chief Executive Roger White said.
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Luxury handbag maker Mulberry said it expects revenue "moderately ahead of current expectations" for the financial year ending April 2. "Mulberry has taken this opportunity to increase its marketing investment in the second half of FY22 to further build global brand awareness. Despite this additional expenditure, the profit for FY22 will be moderately ahead of current expectations," it said.
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Tuesday's shareholder meetings
Impax Asset Management Group PLC - AGM
Tekmar Group PLC - AGM
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By Tom Waite; thomaslwaite@alliancenews.com
Copyright 2022 Alliance News Limited. All Rights Reserved.
Admiral (ADM)
Barclays (BARC)
Rio Tinto (RIO)
SSE (SSE)
Workspace (WKP)