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LONDON BRIEFING: Old Mutual Suspends CEO After "Breakdown In Trust"

LONDON (Alliance News) - Old Mutual on Friday said it suspended Chief Executive Peter Moyo with ...

Alliance News 24 May, 2019 | 8:08AM
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LONDON (Alliance News) - Old Mutual on Friday said it suspended Chief Executive Peter Moyo with immediate effect after a "material breakdown in trust and confidence".

The Anglo-South African financial firm did not give any further details, but said Chief Operating Officer Iain Williamson will become acting CEO.

Moyo helped oversee Old Mutual's managed separation, which was completed during 2018.

Old Mutual shares were down 4.1% in London early Friday.

Here is what you need to know at the London market open:
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MARKETS
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FTSE 100: up 0.5% at 7,264.48
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Hang Seng: up 0.4% at 27,367.68
Nikkei 225: closed down 0.2% at 21,117.22
DJIA: closed down 286.14 points, 1.1%, at 25,490.47
S&P 500: closed down 1.2% at 2,822.24
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GBP: firm at USD1.2685 (USD1.2662)
EUR: up at USD1.1201 (USD1.1164)

Gold: soft at USD1,283.80 per ounce (USD1,285.30)
Oil (Brent): up at USD68.46 a barrel (USD67.75)

(changes since previous London equities close)
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ECONOMICS AND GENERAL
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Friday's Key Economic Events still to come

0930 BST UK retail sales
1100 BST UK CBI distributive trades survey

0830 EDT US advance report on durable goods
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Theresa May is expected to set out when she will quit Number 10 after a Cabinet revolt over her Brexit plan. The UK prime minister will meet the leader of backbench Conservatives, Graham Brady, on Friday to discuss her future after her authority was left in tatters following the backlash against her "new Brexit deal". Senior ministers set out their concerns in "frank" talks with the beleaguered premier as Downing Street delayed publication of the Withdrawal Agreement Bill which sets out her Brexit plan in law. The prime minister's private meeting with Brady, chairman of the powerful 1922 Committee of Tory backbenchers, could be the moment that May sets the date for her exit from Downing Street. A 1922 Committee source told the Press Association they expected June 10 to be the day May chooses.
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UK politicians are waiting for the results of European elections which PM May hoped would never have to be held – and which could deliver a damaging blow to her Tory party. Results of the European contests will not start being announced until Sunday night but opinion polls have suggested Nigel Farage's Brexit Party is on course for victory in the elections, which are only taking place because of the delay to Brexit. Results will be announced after 10pm on Sunday, when the final polls have closed across Europe. Both May and Jeremy Corbyn are braced for a backlash from voters, with Farage's party and – from the opposite side of the Brexit divide – the Liberal Democrats expected to pick up votes. Seventy-three MEPs will be elected to represent the UK, with England, Scotland and Wales using a form of proportional representation called the D'Hondt system and Northern Ireland using the single transferable vote method.
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The US federal government announced a USD16 billion aid package for farmers whose businesses have been badly affected by the ongoing trade war with China. The US and China have been in a tit-for-tat tariff escalation for a year, with Washington accusing Beijing of unfair practices, including barriers to trade and intellectual property theft. President Donald Trump said the aid is "swift action to remedy all the injustices that have happened over the years" to American farmers.
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The US Department of Commerce will take steps aimed at punishing countries that undervalue their currency by imposing tariffs, the agency said. The department will propose a rule to impose duties on countries that "act to undervalue their currency relative to the dollar, resulting in a subsidy to their exports," it said in a news release. The change puts foreign exporters, most notably China, on notice that the Commerce Department can respond with tariffs against currency undervaluation that harm US industries.
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Trump and first lady Melania Trump on Friday are scheduled to depart Washington for a state visit to Japan that includes a meeting with newly enthroned Emperor Naruhito. Trump and his wife will be Japan's first state guests since Naruhito's enthronement on May 1. The White House said the visit comes at a "historic moment in Japan" and demonstrates that the alliance between Japan and the US has never been stronger. After arriving on Saturday night, Trump will meet informally with Prime Minister Shinzo Abe on Sunday and join him later that day in watching a sumo wrestling match, a senior administration official said Wednesday in a background briefing. The official said there would be "some substantive things to announce" during the visit but didn't elaborate.
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Consumer prices in Japan climbed 0.9% year-on-year in April due to rising energy costs, the government said. The figure represented the 28th straight month of increase, said the Ministry of Internal Affairs and Communications. But the inflation rate remained far off a 2% inflation goal set by the Bank of Japan in 2013. The rate has never even approached the target despite the bank's years-long monetary easing campaign.
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BROKER RATING CHANGES
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HSBC RAISES VODAFONE TO 'BUY' (HOLD) - PRICE TARGET 160 PENCE
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HSBC RESUMES MARKS & SPENCER WITH 'HOLD' - TARGET 250 PENCE
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RBC RAISES ANGLO AMERICAN TO 'TOP PICK' ('OUTPERFORM') - TARGET 2350 (2250) PENCE
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LIBERUM RAISES ROYAL MAIL TO 'HOLD' ('SELL')
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INVESTEC RAISES CLOSE BROTHERS TO 'HOLD' ('SELL') - TARGET 1430 (1425) PENCE
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COMPANIES - FTSE 100
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Events & business media company Informa said it remains confident of meeting full-year expectations despite ongoing macroeconomic uncertainty and geopolitical risk. In the Markets unit, Informa said it saw a "strong" performance, as 11 of its top 30 events have "successfully" run in the first four months of the year. Informa said the Markets unit remains on track to deliver at least 4.5% underlying revenue growth. "Informa has performed well through the first four months of the year, with steady trading across our enlarged portfolio of specialist international brands," said Chief Executive Stephen Carter. "This leaves us well placed to meet our targets for 2019 and deliver a further year of growth in revenue, adjusted profit, earnings, cashflow and dividends," added Carter.
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COMPANIES - FTSE 250
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Stagecoach said it has launched legal action against the UK Department for Transport in relation to the tender for the West Coast Partnership rail franchise. The legal action follows a decision by the DfT in April to disqualify Stagecoach and its partners from the East Midlands, West Coast Partnership and South Eastern franchise competitions. "The claims vary in certain respects but common to both is our refusal to accept the pension risks that the DfT requires operators to bear in relation to the new franchises," said Stagecoach. The claim has been brought by the West Coast Trains Partnership, in which Stagecoach has a 50% stake, with French firm SNCF holding 30% and Virgin 20%. Stagecoach Chief Executive Martin Griffiths said: "It is disappointing that we have had to resort to court action to find out the truth around the DfT's decision-making process in each of these competitions."
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Insurer Lancashire Holdings said Chief Financial Officer Elaine Whelan plans to leave the company in 2020. She will continue in her role throughout 2019 and will step down at the end of February 2020, though will remain available to assist with the transition for several months after. Lancashire said it will be conducting a search for her replacement.
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Measuring instruments and controls company Spectris reported growth in year-to-date sales despite a slowing in some end markets. Like-for-like sales in the first four months of 2019 were up 3%, despite an anticipated moderation in certain end markets. On a reported basis, sales were up 6% in the period. By division, the company said there was strong like-for-like growth from In-Line Instrumentation and in Materials Analysis, despite continued challenges at Concept Life Sciences. Comparable sales declined in Test & Measurement and Industrial Controls, the latter hit by US-China tariffs and slowing US industrial production. Overall, Spectris said trading has been in line with annual expectations.
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Heat treatment firm Bodycote reported a slight rise in year-to-date revenue, with its annual expectations unchanged. Revenue for the first four months was GBP245 million, up 1% on the year before and flat at constant currency. Within this, aerospace and defence revenue grew 15% while automotive sales fell 4%. "The full-year outlook for civil aerospace remains strong, and revenue growth for Specialist Technologies' is also expected to be good. With easing comparatives in automotive in the second half of the year, and provided current macroeconomic conditions do not deteriorate, year-on-year growth should strengthen," said Bodycote.
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COMPANIES - OTHER MAIN MARKET AND AIM
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AIM-listed tonic water maker Fevertree Drinks said the beginning of 2019 has seen encouraging operational progress across its international regions. "Whilst we are mindful of last year's exceptional summer trading performance in the UK, we remain confident in achieving board expectations for the full year," Chair Bill Ronald added.
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Retailer Mothercare reported a narrowed annual loss despite sales slipping. Revenue for the 53 weeks to March 30 was GBP513.8 million, down from GBP580.6 million in the 52 weeks to March 24, 2018. However, the company's pretax loss narrowed to GBP66.6 million from GBP94.0 million. This was due to administrative costs falling to GBP76.9 million from GBP101.7 million. Including discontinued operations, Mothercare's loss swelled to GBP87.3 million from GBP72.8 million. UK like-for-like sales fell 8.9%, versus a 0.6% rise the year before. International like-for-like sales slipped 4.7% versus a 5.9% decline last year. The parenting products retailer said its current financial year should see the "final steps" towards the business completing its transformation, with Mothercare on track to meet consensus expectations.
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COMPANIES - INTERNATIONAL
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Hewlett Packard Enterprise said it now expects to deliver higher annual earnings per share than previously anticipated as it swung to profit in its second quarter. The US technology firm said revenue declined by 4.3% in the three months to the end of April to USD7.15 billion from USD7.46 billion a year prior. However, the company posted earnings from continuing operations before taxes of USD440 million versus a USD116 million loss a year ago. Hewlett Packard took USD425 million in tax indemnification adjustments a year ago, a received a USD4 million gain in the recently-ended quarter. "In the second quarter we demonstrated traction in critical areas for our customers that delivered strong margin improvement, earnings per share above our outlook and solid cash flow," said Antonio Neri, president & chief executive.
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Friday's Shareholder Meetings

PageGroup
Old Mutual
Fevertree Drinks
Luceco
Spectris
Informa
Bodycote
Headlam Group
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By Tom Waite; thomaslwaite@alliancenews.com

Copyright 2019 Alliance News Limited. All Rights Reserved.

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Securities Mentioned in Article

Security Name Price Change (%) Morningstar
Rating
Close Brothers Group PLC 1,395.00 GBX 2.42 -
Royal Mail PLC 227.70 GBX 0.93 -
Marks & Spencer Group PLC 200.20 GBX 1.09
Vodafone Group PLC 161.42 GBX 0.27
Anglo American PLC 1,985.60 GBX 2.73
Old Mutual Ltd Ordinary Shares 111.28 GBX 1.37 -
Old Mutual Ltd Ordinary Shares 20.05 -

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