TOP NEWS SUMMARY: Prudential To Spin Off M&G Into Separate Business

LONDON (Alliance News) - The following is a summary of top news stories ...

Alliance News 14 March, 2018 | 11:32AM
Email Form

LONDON (Alliance News) - The following is a summary of top news stories Wednesday.
----------
COMPANIES
----------
Prudential announced its intention to demerge M&G Prudential to create two separately listed companies, while also reporting a rise in profit for 2017. The insurer said IFRS pretax profit in 2017 rose to GBP3.30 billion from GBP2.28 billion the year before, as total revenue net of reinsurance rose to GBP86.56 billion from GBPP71.84 billion. The company raised its full-year dividend by 8% to 47.00 pence per share, from 43.50p the year before. Prudential said it intends to demerge its UK & Europe business, M&G Prudential, from Prudential PLC - which will cover Asia, Africa and the US - "resulting in two separately-listed companies with different investment characteristics and opportunities". On completion of the demerger, shareholders will hold interests in both Prudential PLC and M&G Prudential. Prudential also said, M&G Prudential has agreed the sale of GBP12.0 billion of its shareholder annuity portfolio to Rothesay Life.
----------
WM Morrison Supermarkets declared a special return to shareholders for its recently ended financial year, as the company recorded stronger like-for-like sales growth than the year before. Morrisons is proposing a special dividend to shareholders of 4.00 pence per share on top of a final dividend of 4.43p. Without the special dividend, the total for the year to February 4 is 6.09p compared to 5.43p, but including it the return is up 86% year-on-year to 10.09p. The special payout reflects progress made so far and expectations for continued growth. On a reported basis, pretax profit increased 17% year-on-year to GBP380.0 million, and underlying pretax profit rose 11% to GBP374.0 million. The results have an extra week on the previous year, and the underlying figure on a 52-week basis was up 9.5%. Revenue climbed 5.8% to GBP17.26 billion from the GBP16.32 billion recorded the year before. On a like-for-like basis, group sales excluding fuel rose 2.8%, compared to 1.9% growth a year earlier.
----------
InterContinental Hotels said it has acquired a 51% stake in Regent Hotels & Resorts for USD39.0 million in cash. The FTSE 100-listed hotel operator also will retain the right to acquire the remaining 49% interest in a phased manner from 2026. IHG will transition Regent into its brand portfolio within the luxury segment and expects to grow the brand from six hotels to over 40 hotels in key cities and resort locations over the long term. Regent currently has 2,000 rooms in its six hotels. Two are in the Chinese cities of Chongqing and Beijing, and the other four are in Berlin, Porto Montenegro, Taipei and Singapore, with three more hotels planned to open in Jakarta, Harbin and Phu Quoc over the three years to 2020. IHG also said that it is planning an extensive refurbishment set to start in early 2020 of the InterContinental Hong Kong, following which it will become a Regent Hotel in 2021.
----------
Hikma Pharmaceuticals said it sunk to a loss in 2017 amid impairments due to a tough generics market in the US. In 2017, the FTSE 250-listed drugs firm sunk to a USD738 million pretax loss from a profit of USD210 million the year prior. Revenue edged marginally lower to USD1.94 billion from USD1.95 billion the year before. Profit performance was hurt by USD1.07 billion in exceptional costs for 2017, up from just USD149 million the year prior. This was chiefly due to impairments associated with Hikma's 2016 West-Ward Columbus acquisition due to difficult US generic drug market conditions. Adjusted pretax profit - excluding exceptional items - dipped to USD328 million from USD359 million the year prior. Hikma proposed a 23 US cents final dividend, up from 22 cents in 2016. For the full year, Hikma's dividend increased to 34 cents from 33 cents the year prior.
----------
Dignity reported flat profit for its recently ended financial year, with the firm noting a "step change" in simple funerals after its January price reductions. Pretax profit for the 52 weeks to December 29 was flat at GBP71.2 million, though on an underlying basis it increased by 3% to GBP77.8 million. Dignity's revenue rose by 3% to GBP3224.0 million, while deaths during the period were flat at 590,000. The company is maintaining its final dividend at 15.74p per share, taking the total payout to 24.38p, which is a 3% increase on its previous year. In mid-January the company said increased price competition was affecting trading, and as a result it reduced its simple funeral prices. Initial analysis, Dignity said, of the mix of funerals in the first seven weeks since the price of the simple funeral was reduced indicates a "step change in simple funerals conducted has occurred, as expected".
----------
Marshalls reported a double-digit increase in profit on strong revenue growth in 2017, helped by a recent acquisition. Pretax profit for the year rose 13% to GBP52.1 million from GBP46.0 million the year before, on an improved operating margin of 12.4% compared to 12.0% in 2016. Revenue grew by 8.0% to GBP430.2 million, up from GBP396.9 million, as like-for-like revenue rose by 6.0% during the period. Marshalls said that revenue was helped by a GBP9.0 million contribution from pre-cast concrete maker CPM Group, acquired for GBP39.0 million in October. Marshalls said sales to the Public Sector & Commercial end-market were up 2.0% compared to the prior year. Excluding the contribution from CPM, sales to this market represented 61% of group sales for 2017.
----------
MARKETS
----------
London shares were higher with Prudential leading the blue chip risers. Wall Street was pointed to a higher open following a lower close on Tuesday amid political disarray after the dismissal of US Secretary of State Rex Tillerson.
----------
FTSE 100: up 0.2% at 7,153.28
FTSE 250: up 0.2% at 19,892.22
AIM ALL-SHARE: up 0.8% at 1,051.06

GBP: soft at USD1.3963 (USD1.3977)
EUR: soft at USD1.2374 (USD1.2393)

GOLD: flat at USD1,325.53 per ounce (USD1,325.44)
OIL (Brent): flat at USD64.93 a barrel (USD64.48)

(changes since previous London equities close)
----------
ECONOMICS AND GENERAL
----------
Although inflation is converging towards the target over the medium term, the European Central Bank needs to see more evidence, ECB President Mario Draghi said. "We still need to see further evidence that inflation dynamics are moving in the right direction," Draghi said at a conference organized by the Institute for Monetary and Financial Stability, in Frankfurt. The monetary policy will remain patient, persistent and prudent to guarantee the return of inflation to the target, he said. Adjustments to monetary policy will remain predictable, and they will proceed at a measured pace, Draghi added.
----------
The midnight Tuesday deadline for Russia to give a response to a UK ultimatum over the poisoning of a former double agent in the English city of Salisbury has passed. Moscow had already said it would not respond unless Britain sent it samples of the nerve toxin used to attack ex-spy Sergei Skripal, 66, and his daughter Yulia, 33, who remain critically ill in hospital. UK Prime Minister Theresa May had demanded that Moscow explain the presence in Britain of the rare Novichok-type nerve agent believed to have been developed by Russia. She promised to discuss potential action against Moscow with her government "should there be no credible response." It was not clear what those measure would be but British media reported that a cyber attack could be among them. She is to host a meeting of the national security council on Wednesday morning.
----------
China's industrial production expanded the most since mid-2017 and retail sales grew strongly, suggesting that the economy sustained robust growth at the start of the year. Data from the National Bureau of Statistics showed that industrial output climbed 7.2% year-on-year in January to February period, while growth was seen at 6.2%, the same as in December. This was the biggest expansion since last June, when output gained 7.6%. At the same time, retail sales growth accelerated to 9.7% in January to February period. Economists had forecast 10% growth after climbing 9.4% in December.
----------
Members of the Bank of Japan's monetary policy board said that the country's economic growth is continuing at a satisfactory rate, minutes from the bank's meeting on January 22-23 revealed. The members added that exports were on a rising trend, which was helping to fuel the recovery. According to BoJ, the economy will continue growing at a pace above its potential through fiscal 2018 at around 1.4%. The outlook for the fiscal 2019 was kept at 0.7%.
----------
A top aide to US President Donald Trump has been fired because he is currently being investigated by the Department of Homeland Security for serious financial crimes, US media reported. Citing three sources familiar with the matter, CNN reported that John McEntee was escorted from the White House on Monday. The exact nature of the allegations against him were not clear. His dismissal was overshadowed by that of US Secretary of State Rex Tillerson, who was abruptly replaced by CIA director Mike Pompeo on Tuesday. McEntee, who was part of Trump's 2016 election campaign and was personal assistant to him in the White House, was immediately hired by Trump's re-election campaign.
----------
Germany's consumer price inflation eased as initially estimated in February, final data from Destatis showed. Consumer price inflation eased to 1.4% in February from 1.6% in January. This was the third consecutive decrease and the lowest since November 2016. On a monthly basis, consumer prices gained 0.5% largely due to higher prices of package holidays. Destatis confirmed the provisional CPI numbers published on February 27. The harmonized index of consumer prices, or HICP, which is meant for EU comparison, climbed 1.2% year-on-year after a 1.4% rise in January.
----------
Angela Merkel has been elected to her fourth term as German chancellor by the Bundestag, the lower house of parliament. Merkel garnered 364 of the 688 votes delivered in the secret ballot on Thursday and was therefore elected as expected in the first round of voting. At least 355 votes were required in the 709-seat chamber. There were 315 votes against her re-election and nine abstentions. For the first time, Merkel's husband Joachim Sauer was present for the vote, as was her mother, Herlind Kasner. German President Frank-Walter Steinmeier had earlier proposed Merkel - who heads the largest party in the chamber, the Christian Democratic Union - as chancellor to the lawmakers in accordance with the constitution. Merkel is scheduled to be sworn in formally at 12 pm local time in Steinmeier's official residence, Bellevue Palace, on the other side of Tiergarten park from the Bundestag in central Berlin.
----------
By Arvind Bhunjun; arvindbhunjun@alliancenews.com

Copyright 2018 Alliance News Limited. All Rights Reserved.

Email Form
Securities Mentioned in Article
Security Name Price Change (%) Morningstar
Rating
Prudential PLC 1,827.50 GBX -0.54
About Author Alliance News

Alliance News provides Morningstar with continuously updating coverage of news affecting listed companies.