Highlights of the Day
Asian Markets
Asia-Pacific markets largely advanced following gains on Wall Street overnight, as global equities continued reversing this month’s declines. |
U.S. Markets
U.S. stocks closed sharply higher, regaining more than half of their correction-level losses amid a stabilization in interest rates. |
Today's News
Rio Tinto Chief Financial Officer Chris Lynch presented at the BMO Global Metals & Mining Conference in Miami, Florida. The company maintained sustaining capital guidance of $2.0bn to $2.5bn per year, including Iron Ore sustaining capex of about $1bn per year. The company noted that productivity programme is delivering $5bn of additional free cash flow by 2021.
US broadcasting giant Comcast has tabled a rival $31bn bid for Sky, in a direct challenge to Rupert Murdoch’s Fox. America’s largest cable TV operator offered £12.5 per share, versus the £10.75 tabled by Fox. “We would like to own the whole of Sky and we will be looking to acquire over 50% of the Sky shares,” Comcast chief Brian Roberts said in a statement.
Standard Chartered resumed dividend payments on the back of a large rise in annual profit driven by lower impairment charges and rising revenue. Pre-tax profit jumped to $2.42bn from $409m in 2016, as operating income rose 3% to $14.3bn. The company declared a full-year dividend of 11c per share and said it intended to increase payouts ‘over time’ as its performance improved. Standard Chartered said it was ‘encouraged’ by its start to 2018, having experienced double-digit income growth.
Persimmon posted a 25% rise in annual profit after it completed more units and achieved higher selling prices. Pre-tax profit rose to £966.1m, as revenue rose by 9% to £3.42bn. Legal completions increased by 872 new homes to 16,043 and average selling price increased by 3.2% to £213,321. The company declared interim and final dividends of 125p and 110p per share, respectively, and said surplus capital meant it was increasing its capital return program. Additional capital return payments of 125p per share would be made each year for the next three years ending in 2020, Persimmon said.
Provident Financial launched a £331m equity raising after misconduct payments dragged it into the red. The company said a resolution had been reached over a Financial Conduct Authority investigation into its Vanquis Bank unit regarding a failure to adequately disclose interest charges to customers. The total estimated cost of the settlement of £172.1m reflected customer restitution in the form of balance reductions and cash settlements, plus a fine issued by the FCA.
Deutsche Bank has confirmed its plans to list its DWS asset management unit on the Frankfurt stock exchange. Seeking to take advantage of favorable market conditions, Deutsche Bank decided to bring forward the DWS flotation by several weeks. No date has been officially confirmed for the listing of the €700bn worth assets but sources close to the company said it would likely happen on 19 March.
Croda International reported a record full-year profit as sales grew thanks to a strong performance across sectors and regions. In the year to the end of December 2017, adjusted pre-tax profit was up 11.1% to a record £320.3m on sales of £1.4bn, up 10.4% on 2016 and driven by an ongoing focus on premium, faster growth niches in personal care, life sciences and performance technologies, together with positive currency translation as 95% of the company’s sales are outside the UK.
Virgin Money posted a 28% rise in annual earnings after it increases loan balances and cut costs. Underlying pre-tax profit grew to £273.3m, as total income rose by 13.5% to £666.0m. The lender said its cost-to-income ratio improved to 52.3%, from 57.2% in 2016. Statutory net profit rose by 37% to £192.1m. The company declared a final dividend of 4.1p per share, bringing total dividends for the year to 6p, up 17.6% on 2016. Looking to 2018, Virgin Money said it expected to maintain double-digit returns and a ‘progressive’ dividend.
GKN reported underlying profits before tax of £572m down 16% from a year ago while organic sales grew 6% to £10.4bn. Profits were reduced by £145m, primarily due to the £112m balance sheet review charge and associated costs in North American Aerospace and claims of £38m. The group has announced a full year dividend of 9.3p per share, up 5% on a year previously. The company said it expects the separation of its aerospace and driveline businesses to be completed in the middle of 2019. “A demerger represents GKN’s base case separation structure for a number of reasons, including that the timetable is within GKN’s control, it allows GKN to allocate liabilities appropriately and it is tax efficient,” GKN said in a statement.
Greggs reported 3.7% like-for-like sales in the year to the end of December, down from the 4.2% growth reported in 2016 amid challenging consumer environment. The company said economic conditions became more challenging in 2017, as business cost inflation rose due to food ingredient and labour cost increases. This contributed to year-on-year margin slippage. Total sales rose 7.4% to £960m from £894.2m , while pre-tax profit fell to £71.9m from £75.1m. The bakery chain increased its dividend by 4.2% to 32.3p per share, compared with 31p per share last year.
Fresnillo reported a small jump in full-year pre-tax profit on Tuesday amid record silver production. In the year to 31 December 2017, pre-tax profit was up 3.2% to $741.5m, while total revenue rose 9.9% to $2.1bn and earnings before interest, tax, depreciation and amortisation pushed up 2.7% to $1.06bn.
Meggitt said annual profit rose by about a third after growth in its civil aerospace and military divisions offset weakness at its energy unit. Pre-tax profit increased by 34% to £262.4m, as revenue grew by 2% to £2.03bn. The company’s order book expanded by 5% to £2.08bn, or 6% in organic terms, which the company said underpinned expectations for revenue growth in 2018. Meggitt declared a final dividend of 10.80p per share, bringing full-year dividends to 15.85p, an increase of 5%. ‘2017 trading was in line with our expectations with the stronger second half contributing to good organic growth across the group, a 10 basis point improvement in margin and 42% growth in free cash flow,’ chief executive Tony Wood said.
Jupiter Fund Management reported that its profit before tax for the year ended 31 December 2017 increased to £192.9m from last year’s £171.4m. Earnings per share grew to 33.7 pence from 29.6 pence last year. On an underlying basis, profit before tax rose to £193.8m from £168.4m, and earnings per share rose to 34.2 pence from 29.4 pence last year. Net revenue for the year increased 17 percent to £409.5m from £351.4m last year. Net management fees, which remain the main component of net revenue, totaled £392.4m, up from last year’s £330.2m.
Drax Group reported full-year core earnings above analysts’ expectations, helped by higher profit from its biomass power plants and the acquisition of Opus Energy. Drax has converted half its power plant in Yorkshire in the north of England that was once Europe’s most polluting coal-fired power station to burn wood pellets, often made from sustainably sourced dry sawdust compressed under high pressure. Earnings before interest, tax, depreciation and amortisation (EBITDA) rose 63.6% to £229m for the year ended Dec. 31, the company said.
Gold Prices were up for a second day in a row on the back of a weaker dollar, while investors awaited U.S. Federal Reserve Chair Jerome Powell’s first congressional testimony for clues on the future pace of monetary tightening.
Oil Prices erased earlier gains as investor concerns about rising U.S. oil output offset signs of stronger demand and faith in the ability of OPEC production curbs to curtail supply.
Companies Reporting this week
Day |
Companies |
Monday: |
Hammerson * Bunzl |
Tuesday: |
Standard Chartered * Persimmon * Drax * Croda * Greggs * Interserve * Provident Financial * Direct Line * Fresnillo |
Wednesday: |
Taylor Wimpey * Weir * St. James’s Place * ITV * Travis Perkins |
Thursday: |
Rentokil * Cobham * Schroders * WPP * Bovis Homes * Petrofac * National Express * Hunting * Merlin Entertainments |
Friday: |
London Stock Exchange * Spire |
Early Market Movements
Market |
Index |
Change |
% Change |
UK 100 |
7,317.5 |
+27.9 |
+0.4% |
UK 250 |
19,911.9 |
+83.2 |
+0.4% |
GER 30 |
12,559.3 |
+32.3 |
+0.3% |
FRA 40 |
5,356.6 |
+12.4 |
+0.2% |
U.S. 30 |
25,709.27 |
+399.28 |
+1.6% |
U.S. 500 |
2,779.6 |
+32.3 |
+1.2% |
OIL (BRENT) |
67.38 |
-0.12 |
-0.2% |
GOLD |
1,333.53 |
-0.15 |
-0.0% |
UK Risers & Fallers (8:15am)
Company |
Price |
Change |
% Change |
Sky |
1305.5 |
+200.5 |
+18.1% |
Persimmon |
2707 |
+219 |
+8.8% |
Drax |
261.2 |
+23 |
9.7% |
Fresnillo |
1271 |
-61 |
-4.6% |
GKN |
423.8 |
-6.2 |
-1.4% |
Meggitt |
453.3 |
-13.3 |
-2.9% |
Latest Broker Views
Company |
Broker |
Recommendation |
Price |
Target |
BAE Systems |
Goldman Sachs |
Conviction Buy List |
577.6 |
737 |
Old Mutual |
UBS |
Buy |
254.8 |
280 |
Direct Line |
RBC |
Outperform |
388.6 |
475 |
RELX |
Goldman Sachs |
Buy |
1502 |
1926 |
Forthcoming Economic Data
Time/Date |
Previous |
Forecast |
Outcome |
1.30pm: U.S. Core Durable Goods Orders m/m |
0.4% |
0.7% |
– |
1.30pm: U.S. Fed Chair Powell Testifies |
– |
– |
– |
3.00pm: U.S. CB Consumer Confidence |
125.4 |
126.2 |
– |
Sources
http://www.londonstockexchange.com/exchange/news/alliance-news/detail/1519718275850696200.html
http://www.londonstockexchange.com/exchange/news/alliance-news/detail/1519713107070183000.html
https://uk.webfg.com/news/news-and-announcements/fresnillo-profit-edges-up-amid-record-silver-production–3158179.html
https://uk.webfg.com/news/new-issues/deutsche-bank-to-list-euro700bn-asset-management-arm–3155661.html
https://uk.webfg.com/news/news-and-announcements/croda-posts-record-profit-amid-strong-performance-across-regions-and-sectors–3158123.html
https://uk.webfg.com/news/m-a/comcast-tables-rival-bid-for-sky–3158194.html
http://www.stockmarketwire.com/article/5870999/Meggitt-profit-up-34pct-as-aerospace-military-strength-offsets-energy-weakness.html
http://www.stockmarketwire.com/article/5870991/Virgin-Money-profit-up-28pct-as-loan-book-swells.html
http://www.stockmarketwire.com/article/5870953/GKN-pretax-profit-falls-16pct-short-term-revenue-outlook-unchanged.html
http://www.stockmarketwire.com/article/5870990/Greggs-like-for-like-sales-profit-falls-amid-higher-costs.html
http://www.stockmarketwire.com/article/5870954/Provident-Financial-to-raise-pound331m-as-misconduct-charges-drive-annual-loss.html
http://www.stockmarketwire.com/article/5870939/Standard-Chartered-resumes-dividend-as-profit-jumps.html
http://www.stockmarketwire.com/article/5870936/Persimmon-profit-up-25pct-pledges-payouts-to-shareholders.html
http://www.bbc.co.uk/news/live/business-43198677
https://www.marketwatch.com/story/asian-markets-continue-to-rebound-cutting-into-monthly-losses-2018-02-26
https://www.cnbc.com/2018/02/26/us-stock-futures-dow-data-earnings-and-politics-on-the-agenda.html
https://www.reuters.com/article/us-global-oil/oil-prices-give-up-earlier-gains-as-rising-u-s-supply-outweigh-signs-of-demand-gains-idUSKCN1GB02E
https://www.reuters.com/article/global-precious/precious-gold-prices-rise-for-second-session-on-softer-dollar-idUSL4N1QH16Y
https://www.nasdaq.com/article/jupiter-fund-management-fy17-pretax-profit-rises–quick-facts-20180227-00136
https://uk.reuters.com/article/uk-drax-group-results/drax-beats-on-core-earnings-idUKKCN1GB0NB