(Alliance News) - The following is a summary of top news stories Thursday.
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COMPANIES
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Royal Mail remained bullish on its future as a parcel delivery firm, despite reporting that interim profit was reduced to just one-tenth of the year-earlier level on a range of costs. Revenue for the half-year to September 27 amounted to GBP5.67 billion, up 9.8% on a year ago. However, pretax profit dived 90% to GBP17 million from GBP173 million, and the firm posted an operating loss of GBP20 million versus a profit of GBP61 million a year prior. For the Royal Mail arm, its UK business, revenue was up 4.9% to GBP3.83 billion from GBP3.65 billion a year before, with parcels revenue up 33% but letters revenue falling 21%. Domestic account parcel volumes, excluding Amazon deliveries, were up 51%. Parcel revenue exceeded letter revenue for the first time in the UK business. Parcel revenue climbed to GBP2.30 billion from GBP1.73 billion, while letter revenue fell to GBP1.53 billion from GBP1.92 billion. Keith Williams, interim executive chair, commented on the company's outlook: "We have updated our scenario for the full year. As parcel volumes at both Royal Mail and GLS have continued to be robust year to date, revenue performance in the scenario has improved."
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DIY store chain Kingfisher posted double-digit sales rises almost across the board in its third-quarter, helped by both its status as essential retailer and by an online order surge. And more recently, sales in the six weeks to November 14 have continued to grow, albeit at a slightly slower pace. In the three months to October 31, sales jumped 17% year-on-year to GBP3.46 billion. At constant currency, sales were 18% higher, while like-for-like constant currency sales climbed 17%. In its UK & Ireland arm, Kingfisher saw sales growth of 24% and 17% at its B&Q and Screwfix units. Total UK & Ireland sales were 22% higher. Online sales more than doubled, Kingfisher explained, and they now account for 17% of group sales, compared to 8% a year ago. In the six weeks to November 14, which has coincided with tighter restrictions in Europe, including part of England's one-month lockdown, group like-for-like sales are up 13%, slowed somewhat from the third-quarter.
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CMC Markets saw a record first half trading performance, the online trading firm said, with profit surging. Net operating income in the six months to September 30 more than doubled to GBP230.9 million from GBP102.3 million a year ago, with pretax profit soaring to GBP141.1 million from just GBP30.1 million. Revenue for the half surged to GBP256.1 million from GBP124.9 million year-on-year. Contracts for difference gross client income was up 68% at GBP173.6 million, representing increased client trading and demand from new and existing clients. CFD active clients rose 42% to 59,082. CMC declared an interim dividend of 9.20 pence, tripled from 2.85p a year ago. "I am delighted with our record first half performance, which vindicates our strategy of continuing focus on high value clients," said Chief Executive Peter Cruddas. The FTSE 250 constituent said it is confident that net operating income for the year will be in excess of GBP370 million while operating costs in the second half, excluding variable remuneration, are likely to be similar to the first six months. Net operating income for the financial year ended March 31, 2020 was GBP252.0 million.
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Insurer Tokio Marine Holdings reported a first-half profit fall but did improve its full-year outlook, expecting a smaller earnings decline than first thought. In the six months to September 30, pretax profit was 39% lower year-on-year at JPY92.53 billion, about USD890.8 million, from JPY151.82 billion. Net income dropped 48% to JPY61.41 billion from JPY117.93 billion. Ordinary income was improved by a hair to JPY2.744 trillion from JPY2.743 trillion. The revenue measure includes underwriting and investment income. Tokio Marine added that net income attributable to owners of the parent was 47% lower year-on-year at JPY62.39 billion. For the full-year, the Tokyo-based insurance firm expects a 23% decline to JPY200.00 billion, though this forecast represents a smaller decline than its initial prediction of a 33% fall to JPY175.00 billion.
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MARKETS
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The latest promising vaccine news, this time from the Oxford University-AstraZeneca vaccine, was unable to lift markets on Thursday. The closure of schools in New York and a record number of daily coronavirus infections in Japan put markets on edge, with this winter shaping up to be a difficult one given a widely available vaccine is still months away. Wall Street is set for a lower open, with the Dow Jones pointed down 0.4%, the S&P 500 down 0.3% and the Nasdaq down 0.4%. AstraZeneca shares were down 0.1% in London.
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FTSE 100: down 0.9% at 6,326.28
FTSE 250: down 0.5% at 19,608.89
AIM ALL-SHARE: down 0.2% at 1,016.25
GBP: lower at USD1.3217 (USD1.3300)
EUR: lower at USD1.1826 (USD1.1870)
GOLD: lower at USD1,856.78 per ounce (USD1,879.79)
OIL (Brent): lower at USD43.94 a barrel (USD44.44)
(changes since previous London equities close)
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ECONOMICS AND GENERAL
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The University of Oxford is expected to release data on the effectiveness of its coronavirus vaccine in the coming weeks, with the latest trial results suggesting it produces a strong immune response in older adults. The ChAdOx1 nCov-2019 vaccine has been shown to trigger a robust immune response in healthy adults aged 56-69 and people over 70. Phase two data, published in The Lancet, suggests one of the groups most vulnerable to serious illness and death from Covid-19 could build immunity, researchers say. According to the researchers, volunteers in the trial demonstrated similar immune responses across all three age groups (18-55, 56-69, and 70 and over). The study of 560 healthy adults – including 240 over the age of 70 – found the vaccine is better tolerated in older people compared with younger adults. The study also found the vaccine, being developed with AstraZeneca, was less likely to cause local reactions at the injection site and symptoms on the day of vaccination in older adults than in the younger group.
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UK household mixing could be allowed over Christmas, but scientists have warned that each day's freedom might require five days of tougher measures to make up for it. The UK government is considering ways to allow people to spend time with family over the festive period, although a senior health official said any socialising would likely have to be followed by "very responsible" behaviour and a reduction in contacts again. Reports suggest households might be allowed to mix indoors for a five-day period from Christmas Eve, and that ministers are considering plans to allow three or four households to form bubbles. A five-day easing could mean a potential 25-day period of tighter measures into January if the government follows advice from the Scientific Advisory Group for Emergencies, or Sage. Susan Hopkins, a senior medical adviser to the government's Covid-19 response, suggested tougher restrictions could be needed either side of Christmas if curbs are to be eased for a time.
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The eurozone's current account surplus widened monthly in September, data from the European Central Bank showed, though it was down annually. The single currency bloc's surplus climbed to EUR25 billion in September from EUR21 billion in August. In September of last year, it reported a surplus of EUR32 billion. The market expected the surplus to rise monthly to EUR28.6 billion, meaning the September figures were below estimates. During September, ECB figures showed EUR323 billion in credits, improved 3.5% from EUR312 billion in August, and EUR298 billion in debits, up 2.4% from EUR291 billion. Also, numbers showed goods exports climbed 3.8% monthly to EUR190 billion in September from EUR183 billion in August. Goods imports were up 3.9% to EUR158 billion from EUR152 billion. The eurozone's goods surplus was EUR33 billion in September, improved slightly from EUR31 billion in August.
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More than a quarter million people have died from Covid-19 in the US, the Johns Hopkins University tally recorded Wednesday, marking a bleak new milestone for the pandemic. The US, which has now registered 250,029 fatalities, has by far the highest national death toll, ahead of Brazil with 166,699 deaths, India with 130,993 deaths and Mexico with 99,026. Social distancing, mask wearing and other measures are followed unevenly in some parts of the US despite a surge in recent cases and deaths. The country now routinely records over 1,000 deaths and 150,000 new cases every day. New York City will again close public schools this week and has re-imposed some restrictions on bars and restaurants.
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The US Senate adjourned for the Thanksgiving holiday on Wednesday without Congress having made headway on stalled negotiations for a new stimulus package, even with coronavirus cases spiking and states rolling back re-openings. Republicans and Democrats are at loggerheads on the stimulus bill, with neither side willing to compromise further, as has been the case for months. The Senate will not hold another voting session until November 30. Republicans say they are willing to pass a stimulus worth hundreds of billions of dollars in targeted aid, including to small businesses. Democrats are demanding a far more expansive bill, worth upwards of USD2 trillion.
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Japan is on "maximum alert" after logging a record number of daily coronavirus infections, the prime minister said Thursday, though no immediate restrictions are planned. More than 2,000 cases were recorded nationwide on Wednesday, with nearly 500 in the capital Tokyo alone. While small compared to figures seen in some other countries, the numbers represent a sharp rise in cases for Japan, where testing is often less wide-scale than in other parts of the world. "We are now in a situation of maximum alert," Prime Minister Yoshihide Suga told reporters. "I ask you, the Japanese people, to fully implement principles such as wearing masks," Suga added, urging people to wear them even while talking during meals in restaurants.
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