Highlights of the Day
Asian Markets
Asian stock markets were mostly stronger in early trading, with Australia leading the way higher after badly lagging regional peers a day earlier. |
U.S. Markets
U.S. equities closed mostly lower as Wall Street geared up for a major week of earnings and Federal Reserve news. |
Today's News
Provident Financial has maintained its dividend despite reporting a 46% fall in statutory first-half profits, which it blamed entirely on the disruption from reorganising its home credit business. Attempting to allay the market’s worries after several Bank of England warnings in recent months about its concerns for consumer credit, the company assured that it will “continue to exercise strong discipline around credit and has not observed changes in customer behaviour in relation to either demand for credit or credit performance in any of its businesses”
Acacia Mining has been sent a tax bill from the Tanzanian authorities totalling around $190bn for unpaid tax and penalties from its Bulyanhulu and Buzwagi mines in the country, which the London-listed company disputes. The Tanzania Revenue Authority sent a demand for $154bn and $36bn to Bulyanhulu Gold Mine Limited and Pangea Minerals Limited, the holding companies for the two mines, in reference to alleged under-declared export revenues. The TRA’s assessments claim a total of close to $40bn of alleged unpaid taxes and roughly $150bn of penalties and interest owed. Acacia, which said it disputed these assessments, is considering all of its options and rights and will provide a further update in due course.
Kumba Iron Ore, which is majority owned by mining giant Anglo American, reported headline earnings of ZAR 4.6bn (£272.58m) for the six months to 30 June on Tuesday. Anglo American said it would report underlying earnings in respect of Kumba Iron Ore of $210m for the half-year period, taking into account “certain adjustments”. Headline earnings at Kumba for the period were $348m, up from $198m year-on-year, with nil special items – compared to $35m at the same time last year – and “other adjustments” contributing $3m, compared to a $6m other adjustments loss in the first half of 2016.
Mediclinic International has begun searching for a new chief executive after Danie Meintjes announced his retirement from the company he joined in 1985. Meintjes will step down on 31 July 2018, giving the nomination committee time to search for a suitable successor and enable a smooth transition. Meintjes joined the group 32 years ago as a hospital manager of a Mediclinic in Johannesburg and rose to become a director of the group in 1996 and group chief executive in 2010.
Domino’s Pizza Group’s system sales rose by 10.5% to £546.5m in the 26 weeks to 25 June with underlying pre-tax profits up 9.1% at £44.6m. On a statutory basis, revenues were up 19.8% at £211.3m but after-tax profits fell by 5.3% to £37.7m. The board has recommended an interim dividend of 3.75p per share – up 7.1%. Chief executive David Wild said: “The first half of 2017 has been another period of good progress for Domino’s Pizza Group, despite a more uncertain UK economic environment. The core business delivered strong year-on-year system sales, continuing to take pizza market share, with good like-for-like performance.
First half revenues at Fever-Tree rose by 77% to 77% to £71.9m. Gross margins were virtually unchanged at 54.5% (H1 2016: 54.8%) and adjusted EBITDA rose by 102% to £25.2m. The group said it has seen strong growth across all regions, channels and flavours and exceptional growth of 113% in the UK as distribution gains continued to drive performance. The board has declared an interim dividend of 3.01p per share – up 95%. Chief executive Tim Warrillow said: “We are delighted to report another strong performance in the first half of 2017, continuing the momentum seen in 2016.
Michael Kors Holdings has agreed a recommended cash offer for Jimmy Choo which values the company at around £896 million. Michael Kors said the price of 230 pence per Jimmy Choo Share represented a premium of approximately 36.5% to the closing price on 21 April, the last business day before the Jimmy Choo directors announced the commencement of the formal sale process. It said the acquisition implied an enterprise value multiple of approximately 17.5 times Jimmy Choo’s adjusted EBITDA for the 12 months ended 31 December 2016.
Virgin Money’s underlying pre-tax profit rose 26% to £128.6 million in the first half, driven by strong performance in its mortgage and credit card businesses. The bank’s return on tangible equity increased to 13.3% from 12.2% a year earlier. Jayne-Anne Gadhia, chief executive, said the growth was driven by the bank’s “drive to maintain excellent asset quality, deliver customer satisfaction and retention, combined with continuing operational leverage”. Virgin Money announced a partnership with Virgin Atlantic to become its retail financial services partner in the UK from 2018. The partnership will offer customers a range of benefits, including Flying Club miles and Virgin Group discounts.
SEGRO, the property investment and development company, increased its adjusted pre-tax profit by 23% to £91.2 million in the first half, partly driven by its acquisition of the Airport Property Partnership (APP) portfolio. The company said it also achieved high customer retention rates, a low vacancy rate of 5.5% and strong like-for-like rental growth of 3.9%. David Sleath, chief executive of SEGRO, said business confidence in Continental Europe has picked up in recent months and there is no sign of any slowdown in the growth of internet retailing, an important driver of demand for warehouse space. “With few signs of any meaningful new supply of speculatively developed space and investor appetite for good quality warehouse assets remaining strong, our business is well-placed to continue outperforming the wider market,” he said. The company acquired 50% of the £1.1 billion APP portfolio not previously owned, which it said allows it to add scale in Heathrow.
PZ Cussons, the consumer products group, saw like-for-like pre-tax profits edge up by 1.7% to £103.5 million in the year to 31 May, as strong performance in the UK and Asia was dampened by a challenging environment in Nigeria. Revenues increased by 0.9% on a like-for-like basis to £809.2 million. The company said performance in the UK washing and bathing division was robust, while Asia traded strongly in the second half driven by continued improvement in Australia. Businesses in Nigeria traded relatively well but there was a significant year-on-year currency devaluation. Caroline Silver, chair of the company, said there were tough trading conditions in most of the markets in which it operates. “Our strategy of ongoing brand innovation and renovation continues to underpin the group’s ability to maintain or grow our market shares,” she said. Despite consumer confidence remaining fragile in most markets, the group is on track to deliver full year expectations.
Oil prices extended gains after Saudi Arabia pledged to curb exports from next month and OPEC called on several members to boost compliance with output cuts
Gold prices held steady, after hitting a one-month high in the previous session, buoyed by political uncertainty in the United States
Companies Reporting this week
Today: |
Games Workshop Group * PZ Cussons * Croda * Domino’s * Fevertree Drinks * Virgin Money Holdings Provident Financial * Informa |
Wednesday: |
Joules Group * 31 Group * GlaxoSmithKline * GKN * Hammerson * ITV * Jupiter Fund Management * Tullow Oil |
Thursday: |
Angle * Diageo * Renishaw * Sky * Torotrak * AstraZeneca * Royal Dutch Shell * Lloyds * Just Eat * Anglo American * Schroders |
Friday: |
Clipper Logistics * Berendsen * Barclays * BT Group * |
Early Market Movements
Market |
Index |
Change |
% Change |
UK 100 |
7424.0 |
+46.3 |
+0.6% |
UK 250 |
19,695.4 |
+79.1 |
+0.4% |
GER 30 |
12,214.1 |
+5.2 |
+0.0% |
FRA 40 |
5,149.9 |
+22.2 |
+0.4% |
U.S. 30 |
21,513.17 |
-66.90 |
-0.3% |
U.S. 500 |
2469.9 |
-2.6 |
-0.1% |
OIL (BRENT) |
48.82 |
+0.22 |
+0.5% |
GOLD |
1,255.57 |
+0.27 |
+0.0% |
UK Risers & Fallers (8:15am)
Company |
Price |
Change |
% Change |
Informa |
717 |
+41.5 |
+6.1% |
Victrex |
1997.5 |
+93.5 |
+4.9% |
Anglo American |
1159.5 |
+55 |
+5% |
Acacia Mining |
167.1 |
-17.4 |
-9.4% |
Provident Financial |
2237 |
-60 |
-2.6% |
Croda |
3760 |
-65 |
-1.7% |
Latest Broker Views
Company |
Broker |
Recommendation |
Price |
Target |
Anglo American |
JP Morgan Cazenove |
Overweight |
1152.5 |
1,500 |
Cobham |
Barclays |
Equal Weight |
136.5 |
135 |
Kaz Minerals |
RBC Capital |
Sector Perform |
659 |
650 |
Reckitt Benckiser |
Societe Generale |
Hold |
7589 |
8300 |
Forthcoming Economic Data
Time/Date |
Previous |
Forecast |
Outcome |
9:00AM: German Ifo Business Climate |
115.1 |
114.9 |
|
3:00PM: CB Consumer Confidence |
118.9 |
116.5 |
|
Sources
http://www.marketwatch.com/story/aussie-stocks-lead-a-rebound-for-asian-markets-as-dollar-steadies-2017-07-25
https://www.digitallook.com/news/news-and-announcements/provident-financial-holds-dividend-as-first-half-profits-plunge–2784962.html
https://www.digitallook.com/news/news-and-announcements/acacia-mining-hit-with-usd190bn-tax-bill-from-tanzanian-government–2784235.html
https://www.digitallook.com/news/news-and-announcements/anglo-american-expecting-210m-contribution-from-kumba-iron-ore–2784956.html
https://www.digitallook.com/news/news-and-announcements/mediclinic-ceo-steps-down–2784984.html
http://www.stockmarketwire.com/article/5599005/Dominos-Pizza-hikes-divi-as-revenues-rise.html
http://www.stockmarketwire.com/article/5599011/Fever-Tree-interim-dividend-up-95pct.html
http://www.stockmarketwire.com/article/5599012/Michael-Kors-agrees-offer-for-Jimmy-Choo.html
http://www.stockmarketwire.com/article/5599014/Virgin-Money-lifts-divi-after-profit-increase.html
http://www.stockmarketwire.com/article/5599023/SEGRO-reaps-rewards-of-internet-retailing.html
http://www.stockmarketwire.com/article/5599018/PZ-Cussons-on-track-in-tough-trading-conditions.html
https://www.reuters.com/article/us-global-oil-idUSKBN1AA01B
https://in.reuters.com/article/global-precious-idINKBN1AA095