The Morning Call - William Hill warns on profits - Collins Sarri Statham Investments

Highlights of the Day

Asian Markets

Asian stocks were mixed as investors looked to the U.S. midterm elections set for later in the day.

U.S. Markets

U.S. stocks mostly rose as financial and health care companies finished higher, while Apple and other technology companies continued to fall.

Today's News

UK Prime Minister Theresa May is to face her Cabinet after Dublin insisted it would not accept any unilateral UK ability to end a Brexit backstop agreement on the Irish border. The meeting of senior ministers on Tuesday comes after Justice Secretary David Gauke said a no-deal EU exit would be “very bad” for the UK economy.

The US midterm elections will be held today, to fill all 435 seats in the House of Representatives and 35 of the 100 seats in the Senate. Democrats are favoured to win control of the House, while Republicans are predicted to retain control of the Senate.

William Hill warned on profits after it was hurt by weak horseracing margins, customer-friendly football results and challenging conditions on the high street. Full-year operating profit was expected to come in at between £225m to £245m, assuming normalised gross win margins in the remaining weeks of the year.

Randgold Resources posted a rise in third-quarter profit at it cut costs, though production was hurt by strike action at its Tongon mine in Ivory Coast. Profit for the three months through September rose 21% on-year to $73.2m, as total cash costs fell 10%.

EasyJet carried 8,578,341 passengers in October, a 14.1% rise from a year ago. The load factor fell to 90.5% in October from 92.5% the same month a year ago. On a rolling 12-month basis, easyJet carried 89,513,193 passengers – up 10.6% from a the same month a year ago, while the load factor fell by 0.1% to 92.7%.

Direct Line reported a 5.8% drop in quarterly gross written premiums, hit by fierce competition in a sector that is dealing with the impact of high weather-related claims this year.

Wizz Air grew passenger numbers by 14.8%, while improving its load factor. Passenger numbers jumped to 3,059,419 as the company expanded flying capacity by 12.5%. Its load factor for the month improved by 1.9 percentage points on-year to 94.0%.

Associated British Foods reported annual adjusted pre-tax profits rose modestly as strong performance at Primark and the group’s grocery business offset a plunge in profit at its sugar business. For the year to 15 September, adjusted pre-tax profits rose 3% to £1.40bn, and revenues rose 1% to £15.6bn in actual terms and 3% at constant currencies.

DS Smith said it expected its first-half operating profit to be materially ahead of the previous year’s result as it continued to raise prices to recoup increased input costs. The regulatory process for the proposed acquisition of Europac continued to track in line with the company’s expectations, with completion of the deal expected by the end of the calendar year.

Weir Group cut earnings guidance for its oil and gas business, owing to a slowdown in North American production. Ebitda in the unit for the full year was now expected at between £90m and £100m, the company said. Across the broader business, third-quarter orders from continuing operations rose 16%, or by 40% including the acquisition of ESCO.

Greene King CEO Rooney Anand announced plans to step down in April next year after serving 14 years at the helm of the British pub operator and beer brewer.

Imperial Brands said first-half profits would take a hit in the year ahead as the company aimed to ramp up investment in vaping products after reporting Tuesday annual total tobacco volume sales fell 2.1%.

Morrison Supermarkets said it boosted like-for-likes sales, excluding fuel, by 5.6% in the third quarter. The rise for the 13 weeks to 4 November comprised 1.3% growth in retail and 4.3% growth in wholesale. Including fuel, like-for-like sales jumped 6.0%.

Purplebricks Group reported a 20% in first-half revenue as it continued to gain market share despite a slowdown in the UK housing market. In a trading update, the company said it achieved double digit growth in the number of properties it listed in the UK, or what it called instructions, and an increase in revenue per instruction. The group had a 74% share of the UK’s online hybrid real estate market in October.

Oil Prices fell, weighed down by sanction exemptions from Washington that will allow Iran’s biggest oil customers to keep importing from Tehran

Gold Prices inched lower as investors took some profits following a recent rally, but the metal traded within a narrow range as caution set in ahead of the U.S. congressional elections.

Companies Reporting this week

Day	Companies
Monday:	Hiscox
Tuesday:	Associated British Foods * Imperial Brands * Randgold Reources * Morrisons * DS Smith * Weir Group * Direct Line * William Hill
Wednesday:	Marks & Spencer * Dairy Crest * Persimmon * G4S * JD Wetherspoon * ITV
Thursday:	Tate & Lyle * Astrazeneca * Inmarsat * National Grid * Sainsbury’s * Superdry * OneSavings Bank * esure
Friday:	No Companies Reporting

Early Market Movements

Market	Index	Change	% Change
UK 100	7,112.3	+8.5	+0.1%
UK 250	19,089.9	+26.2	+0.1%
GER 30	11,528.3	+33.3	+0.3%
FRA 40	5,107.9	+6.5	+0.1%
US 30	25,461.70	+190.87	+0.8%
US 500	2,738.31	+15.25	+0.6%
Oil (Crude)	72.73	-0.44	-0.6%
GOLD	1,231.03	-0.46	-0.0%

UK Risers & Fallers (8:15am)

Company	Price	Change	% Change
Imperial Brands	2715	+71.5	+2.7%
Smith (DS)	390.3	+9.9	+2.6%
Acacia Mining	162.125	+5.325	+3.4%
Morrison (WM)	244.55	-10	-3.9%
Kingfisher	250.5	-4	-1.6%
William Hill	197.75	-15.85	-7.4%

Latest Broker Views

Company	Broker	Recommendation	Price	Target
Vodafone	Societe Generale	Sell	150.4	130
Royal Dutch Shell B	HSBC	Hold	2483	2900
WPP	JPMorgan	Overweight	893.8	1070
Hiscox	Berenberg	Buy	1552	1711