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TOP NEWS SUMMARY: Hottest Day In July Fails To Boost UK Grocery Sales

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

Alliance News 20 August, 2019 | 11:22AM
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(Alliance News) - The following is a summary of top news stories Tuesday.
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COMPANIES
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The UK grocery market was flat in the past three months due to "tough" comparatives with last year's hot summer, a survey by Kantar Worldpanel showed. In the 12 weeks to August 11, supermarket sales were flat compared to a year before, Kantar said, as July's hottest day on record in the UK wasn't enough to shift the market into growth. Ocado Group claimed the top spot as the UK's fastest growing grocer, increasing sales by 13% during the period. J Sainsbury accounted for 15.4% of all UK supermarket sales during the 12-week period. Overall Sainsbury's sales fell by 0.6%, however, despite sales of branded goods rising by 1.5%, driven by higher levels of promotion and Sainsbury's price lockdown strategy. Sales of the UK's largest grocer, Tesco, and those of smaller peer Walmart-owned Asda shrunk by 1.6% and 1.5%, respectively. WM Morrison Supermarkets increased its level of promotion after its overall sales fell by 2.7% in the period.
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Fewer new home sales resulted in a decline in Persimmon's interim revenue and profit, the company reported. In the six months to June, the FTSE 100 housebuilder sold 7,584 new homes, down 6.0% on the previous year, with revenue declining 4.9% to GBP1.75 billion and new home revenue down 5.2% to GBP1.65 billion. Persimmon said there has been "good" demand across all regions in the UK, though there has been "a little less urgency" from those buying more expensive homes. The average selling price of a new home was GBP216,942, slightly higher, by 0.5%, than the average price in first half of 2018. Persimmon's pretax profit declined 1.4% on the previous year to GBP509.3 million with the underlying new house operating profit margin improving to 31.0% from 29.7% year-on-year. However, it has fallen from 31.8% from the second half of 2018.
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BHP Group reported an improvement in performance in its most recently ended financial year, but results were mostly below what the market had expected. For the 12 months to June, the mining giant's pretax profit rose 2.0% to USD15.05 billion the prior year, while underlying earnings before interest, tax, depreciation, and amortisation was broadly flat year-on-year at USD23.16 billion compared to USD23.18 billion. The figure fell short of the USD23.71 billion expected by analysts. BHP's annual revenue from continuing operations was USD44.29 billion, up 2.7% from a year earlier, but again below consensus of USD44.74 billion. BHP is paying a "record" final dividend of 78 US cents a share, 25 cents above its policy of paying 50% of underlying attributable profit. The total dividend for BHP's financial year was 133 cents, far higher than the 118 cents paid out a year earlier.
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John Wood Group said it swung to a half-year profit despite a fall in revenue and also announced the sale of its nuclear subsidiary for USD305.0 million. In the six months to June 30, the oilfield services company reported a pretax profit of USD62.2 million compared with a loss of USD25.3 million in 2018, which at the time was attributed to the costs of its purchase of Amec Foster Wheeler. Pretax profit before exceptional items, like redundancy and restructuring outgoings, was USD91.1 million, representing a 20% rise from USD75.8 million from 2018. The FTSE 250 company suffered a 2.6% year-on-year revenue fall, however, to USD4.79 billion from USD4.92 billion. John Wood will pay an interim dividend of 11.4 cents per share, up slightly from last year's half-year payout of 11.3 cents. The USD305.0 million sale of the nuclear business is to the US's Jacobs Engineering Group. The deal is expected to close in the first quarter of 2020.
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Bayer said it has agreed to sell its Animal Health business unit for USD7.6 billion in cash and shares. The exit of Animal Health business completes the series of portfolio measures initiated by Bayer in November last year to focus on life sciences. The German chemical and pharmaceutical company had previously announced the divestiture of its consumer health brands Coppertone and Dr Scholl's along with the sale of its 60% stake in German site services provider Currenta. Bayer's Animal Health unit will be sold to Elanco Animal Health for USD5.3 billion in cash and USD2.3 billion in shares.
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MARKETS
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London shares were broadly higher, with Sainsbury's the best blue chip performer, up 2.6%. The pound was down against the dollar amid rising expectations of a no-deal Brexit. Wall Street was pointed to a mixed open following a sharply higher close on Monday.
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FTSE 100: up 0.4% at 7,215.00
FTSE 250: up 0.1% at 19,115.20
AIM ALL-SHARE: flat at 864.91

GBP: down at USD1.2098 (USD1.2139)
EUR: down at USD1.1080 (USD1.1092)

GOLD: up at USD1,503.31 per ounce (USD1,501.04)
OIL (Brent): up at USD59.82 a barrel (USD59.25)

(changes since previous London equities close)
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ECONOMICS AND GENERAL
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UK manufacturing output steadied in the three months to August, the latest Confederation of British Industry's Industrial Trends Survey showed. The CBI said 15% of manufacturers reported total order books to be above normal, while 28% said they were below normal, giving a balance of minus 13%. Though in negative territory, this was, nonetheless, an improvement on the minus 34% recorded in July.
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UK Prime Minister Boris Johnson has faced fresh calls to ensure there is no return to a hard border on the island of Ireland in the event of a no-deal Brexit. Johnson wrote to EU Council President Donald Tusk on Monday evening outlining his opposition to what he called the "anti-democratic" Northern Ireland backstop. In the letter, Johnson said while he wants the UK to leave the EU with a deal, he could not support any withdrawal agreement that "locks the UK, potentially indefinitely, into an international treaty which will bind us into a customs union and which applies large areas of single market legislation in Northern Ireland".
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Johnson makes his debut on the global stage at the G7 summit this weekend, where all eyes will be on his chumminess with US President Donald Trump. The summit in France opens on Saturday, the one-month anniversary of the gaffe-prone Brexit cheerleader and former foreign secretary becoming premier. His meeting with Trump will be one of the highlights to watch for at the August 24-26 summit in the glitzy resort of Biarritz on France's southwest coast.
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The White House is considering cutting taxes or reversing tariffs to head off a recession, US media reported on Monday, despite President Donald Trump's insistence the economy was in rude health. Senior White House officials are mulling several moves to stimulate the economy including temporarily cutting the payroll tax to increase workers' monthly take-home pay, The Washington Post reported. Also under consideration is reversing new tariffs the Trump administration imposed on Chinese goods, according to The New York Times. The discussion is still in the early stages, and officials have not brought up the idea with Trump, who would have to seek approval from Congress, the newspapers said.
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Italy's 14-month populist government looks set to finally collapse Tuesday after months of infighting and gridlock, paving the way for "unpredictable" outcomes. Prime Minister Giuseppe Conte is due to speak at the Senate at 3 pm local time, two weeks after his deputy Matteo Salvini unexpectedly said he wanted to bring down the government. Conte is likely to defend his record and shoot back at Salvini, and then face a confidence vote or spontaneously tender his resignation to President Sergio Mattarella.
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Hong Kong's leader has said she is setting up a "communication platform" to resolve differences in the city after months of anti-government protests. Chief Executive Carrie Lam also said a fact-finding study would look at the causes of the protests and the police response to them. The movement held a massive but peaceful rally on Sunday after earlier protests had been marked by violence. Meanwhile, Twitter said it has suspended more than 200,000 accounts it believes were part of a Chinese government influence campaign targeting the protest movement in Hong Kong. The company also said it will ban ads from state-backed media companies, expanding a prohibition it first applied in 2017 to two Russian entities.
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Copyright 2019 Alliance News Limited. All Rights Reserved.

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