TOP NEWS SUMMARY: Vodafone Wins EU Approval For Liberty Global Deal

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

Alliance News 18 July, 2019 | 11:28AM
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(Alliance News) - The following is a summary of top news stories Thursday.
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COMPANIES
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Vodafone Group said it has received approval from the European Commission for the acquisition of Liberty Global's operations in Germany, Czech Republic, Hungary and Romania. In May 2018, the FTSE 100 telecommunications firm first announced the deal to acquire Liberty Global's operations across Europe for an enterprise value of EUR18.4 billion. The acquisition is conditional on the implementation of an agreed remedy package, with the deal now expected to be completed by the end of July. The remedy package comprises a cable wholesale agreement signed between Vodafone and Telefonica Deutschland in May, allowing the latter to offer broadband services on Vodafone's network in Germany. The package also contains a commitment to ensure enough capacity is available for over-the-top television distribution.
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Pub owner Ei Group has agreed to a GBP1.3 billion takeover by Stonegate Pub Co, the owner of the Slug & Lettuce chain, the former Enterprise Inns announced Thursday. Stonegate will pay 285 pence per Ei share, a 39% premium to Ei's closing price in London on Wednesday of 205.8p. The deal values Ei at GBP1.27 billion, implying an enterprise value of GBP2.97 billion when including debt. Stonegate was set up in 2010, when it purchased 333 pubs from Mitchells & Butlers. It now owns over 765 outlets, compared to Ei, which has over 4,000 properties.
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Budget airline easyJet said third quarter revenue rose year-on-year, partly due to the Easter period being in the second half of the current financial year. easyJet also announced it has poached the chief operating officer of rival Ryanair to take on the same role at easyJet. COO Peter Bellew had rejoined Ryanair in late 2017, having been chief executive officer of Malaysia Airlines. He previously had been had been director of flight operations for Ryanair until 2014. easyJet reported total revenue for the third quarter ended June 30 of GBP1.76 billion, an 11% year-on-year rise on 2018's GBP1.51 billion. The airline said the later Easter in 2019, which generated almost GBP40.0 million extra, and an accounting change, which had a revenue benefit of GBP10.0 million, helped drive the third quarter growth.
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SSE reiterated its outlook for the 2020 financial year, despite lower-than-expected renewable energy output in the first three months of the financial period. The Scottish energy company also reconfirmed its intention to recommend a dividend of 80 pence per share for the year ending March 31, 2020, in line with the company's five-year dividend plan set out in May 2018. In May, SSE said it expects financial 2020 adjusted operating profit to improve but to be impacted by the phasing of profits in regulated Electricity Networks and the hedging of renewable energy output at less than current market prices. Adjusted operating profit for financial 2019 was GBP1.14 billion. Adjusted investment and capital expenditure for financial 2020 was guided at around GBP1.5 billion and adjusted net debt at around GBP10 billion.
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ASOS reduced its profit expectations for the financial year after warehouses issues affected sales in Europe and the US, despite "robust growth" elsewhere. Total revenue for the four months to June, which includes not just retail sales but delivery fees and third-party income, rose 12% year-on-year to GBP919.8 million from GBP823.9 million. The company's total retail sales in the period increased 11% to GBP894.0 million from GBP802.7 million. UK retail sales during the four month period jumped 16% to GBP334.1 million from GBP288.0 million and in the Rest of the World by 14% to GBP169.5 million from GBP149.2 million. Europe had a sales rise of 5% to GBP269.0 million from GBP257.4 million, while the US - though like Europe affected by operational issues - had a 12% rise to GBP121.4 million from GBP108.1 million. ASOS said the overhaul of its warehouse operations in Berlin and Atlanta which is due to be completed by the end of September, hindered sales in the two regions.
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MARKETS
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London shares were lower amid concerns about stalled trade talks between the US and China. In the FTSE 250, Ei was the best performer, up 39%. Wall Street was pointed to a lower open with investment bank Morgan Stanley and tobacco firm Philip Morris International set to report earnings before the market open in New York. Software firm Microsoft will report after the market close in New York.
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FTSE 100: down 0.4% at 7,505.20
FTSE 250: down 0.3% at 19,555.95
AIM ALL-SHARE: down 0.4% at 914.65

GBP: firm at USD1.2465 (USD1.2435)
EUR: firm at USD1.1231 (USD1.1224)

GOLD: soft at USD1,240.95 per ounce (USD1,422.80)
OIL (Brent): down at USD63.85 a barrel USD64.20)

(changes since previous London equities close)
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ECONOMICS AND GENERAL
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Crashing out of the EU without a deal could push the UK's economy into recession and increase borrowing by GBP30 billion a year, the Office for Budget Responsibility warned. The OBR quantified the impact on public finances of a no-deal, no-transition Brexit scenario and concluded that debt would rise relative to GDP over the next three years. But it said the stress test used in the fiscal risks report was "not the most disruptive one we could have chosen". The OBR warned that a no-deal Brexit could lead to a 2% fall in real GDP by the end of 2020 and a sharp fall in the pound. In the executive summary, the OBR said: "Heightened uncertainty and declining confidence deter investment, while higher trade barriers with the EU weigh on exports."
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UK retail sales growth accelerated in June, despite a decline in department stores, a report from the Office for National Statistics showed. June's retail sales rose 3.8% year-on-year, and increased 1.0% when compared to May. Excluding fuel, June's sales rose 3.6% year-on-year and 0.9% month-on-month. By comparison, May's year-on-year growth was 2.2%. On the year prior, all sectors posted growth save for department stores, and on May non-food stores provided the biggest contribution to growth. For the three months to June, retail sales rose 0.7%, but this was a slowdown from 1.6% growth recorded for the three months to May.
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Boris Johnson will immediately launch a major drive to prepare the country for a no-deal Brexit if he becomes UK prime minister. The front-runner for the Tory leadership again refused to rule out suspending Parliament in order to force through EU withdrawal without an agreement at the final Tory leadership hustings. Johnson insisted that if he becomes PM next week he would ensure the country was ready for the impact of no-deal.
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Fears that US President Donald Trump's trade wars will harm the economy are pervasive, but for now, the US keeps chugging along with steady job creation and tame inflation, the Federal Reserve reported. Worries about the trade outlook are likely to weigh on the Fed's thinking later this month, when it is overwhelmingly expected to cut interest rates for the first time in a decade. "Economic activity continued to expand at a modest pace overall from mid-May through early July," the Fed said in its regular survey of business conditions across the country. While the outlook for the coming months is "generally positive," the survey conducted in advance of the policy meeting found "widespread concerns" about possible harm caused by "trade-related uncertainty."
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Supporters of Trump shouted "send her back" at a re-election rally on Wednesday after Trump kicked off the event by naming the four non-white congresswomen he has been feuding with this week and spelling out his grievances against them. The chants erupted at a rally in Greenville, North Carolina, after Trump mentioned Representative Ilhan Omar, a Muslim who came to the US as a refugee from Somalia and is now a naturalized US citizen and freshman member of Congress. Omar is one of four female Democrats elected last year who he said should "go back" to the country they came from, comments he first made Sunday on Twitter that have been widely criticized as racist.
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Securities Mentioned in Article
Security Name Price Change (%) Morningstar Rating
Vodafone Group PLC 150.84 GBX 1.75
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