TOP NEWS SUMMARY: Ashtead Ups Dividend, Plans GBP500 Million Buyback

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

Alliance News 18 June, 2019 | 11:27AM
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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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Ashtead Group lifted its total payout for the 2019 financial year and said strong demand in its core US market supplemented by targeted bolt-on acquisitions led to a year-on-year rise in earnings and revenue for the period. The equipment rental firm also said it continues to look to the medium term with confidence and expects to return up to GBP500 million via share buybacks in 2020 financial year. The company has returned GBP675 million via share buybacks since December 2017. For the year to April 30, the company recorded pretax profit of GBP1.06 billion, up 23% from GBP862.1 million in the year ago period on a revenue of GBP4.45 billion, up 20% from GBP3.71 billion in 2018. Rental revenue increased year-on-year to GBP4.14 billion from GBP3.42 billion. Ashtead declared a final dividend of 33.5p per share. The firm's total payout stood at 40.0p, up from 33.0p paid a year ago.
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Anglo-South African financial services firm Old Mutual has fired Chief Executive Peter Moyo, it announced, following a conflict of interest. Moyo had been suspended in May following a "material breakdown of trust and confidence". Moyo had declared these interests, Old Mutual said, but the parties disagreed on how they had been managed. One of the issues was a ZAR115 million dividend paid by investment firm NMT Capital, of which ZAR30.6 million went to Moyo's personal investment vehicle. Old Mutual also has a stake in NMT Capital, and Moyo is a founder and non-executive director. Old Mutual did not get an "acceptable" explanation as to why dividends were declared by NMT Capital while debt was owed to Old Mutual, leading to the "breakdown in trust and confidence" with Moyo. Since his suspension, Moyo has not acted appropriately, Old Mutual also charged, meaning his contract has now been terminated.
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AstraZeneca said Lynparza has been approved in Europe as a first-line maintenance treatment for BRCA-mutated advanced ovarian cancer. The European Commission approved the drug for adults patients with stage three and four ovarian cancer who have a BRCA mutation. BRCA1 and BRCA2 genes help suppress the growth of tumours, and mutations in these genes is associated with an increased risk of cancer. The approval covers "high-grade epithelial ovarian, fallopian tube or primary peritoneal cancer" patients who have responded to 1st-line platinum-based chemotherapy. Lynparza is the only PARP inhibitor approved in the EU for this indication. PARP is an enzyme in cells that helps to repair damaged DNA, and so inhibiting this enzyme prevents cancer cells from repairing themselves. The approval is based on data from the phase 3 Solo-1 trial, which found that 60% of patients taking Lynparza were free of disease progression after three years compared to 27% taking a placebo.
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Rolls-Royce Holdings said it has agreed to buy the electric aerospace engines business of German engineer Siemens for an undisclosed amount. The deal - expected to close in late 2019 - will help to accelerate the electrification strategy of the FTSE 100-listed jet engine maker. The eAircraft unit of Siemens is already known to Rolls-Royce through its E-Fan X demonstrator project, which when flying will show hybrid electric propulsion can power regional aircraft.
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MARKETS
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London shares were mixed, with the FTSE 100 benefitting from weakness in the pound. Ashtead was the best blue chip performer, up 2.6%. The euro was down against the dollar after European Central Bank President Mario Draghi said the central bank could cut interest rates and provide more stimulus, if needed. Wall Street was pointed to a higher open as the US Federal Reserve's two-day meeting gets underway.
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FTSE 100: up 0.6% at 7,398.31
FTSE 250: flat at 19,150.87
AIM ALL-SHARE: down 0.1% at 936.36

GBP: down at USD1.2527 (USD1.2559)
EUR: down at USD1.1184 (USD1.1233)

GOLD: up at USD1,344.17 per ounce (USD1,340.19)
OIL (Brent): down at USD60.56 a barrel (USD61.66)

(changes since previous London equities close)
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ECONOMICS AND GENERAL
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European Central Bank President Mario Draghi said that the central bank still has room to cut interest rates and measures to cushion the side effects from low interest rates. Speaking at the ECB Forum on Central Banking in Sintra, Portugal, Draghi said: "Further cuts in policy interest rates and mitigating measures to contain any side effects remain part of our tools." Risks to the euro area economic outlook remained tilted to the downside and indicators for the coming quarters suggest lingering softness, Draghi said. "In the absence of improvement, such that the sustained return of inflation to our aim is threatened, additional stimulus will be required," Draghi added.
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Eurozone inflation slowed as estimated in May, moving further away from the European Central Bank's target of 2%, Eurostat revealed. Meanwhile, the eurozone's trade surplus for April came in lower than a year ago. The consumer price index in the euro area rose by 1.2% in May following an increase of 1.7% registered in April. May's data was unrevised from the initial Eurostat estimate. In May, the highest contribution to the annual euro area inflation rate came from services, which rose by 0.5%. This was followed by energy which rose by 0.4%, food, alcohol & tobacco which increased by 0.3% and non-energy industrial goods, up by 0.1%. Core inflation - which excludes energy, food, alcohol & tobacco prices - slowed to 1.0% in May from 1.4% in the previous month.
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The US will send about 1,000 additional troops to the Middle East, Acting Secretary of Defense Patrick Shanahan said Monday, linking the move to last week's attacks on two oil tankers in the Gulf of Oman that the US says Iran carried out. Shanahan said the additional forces are "for defensive purposes to address air, naval and ground-based threats in the Middle East." The action also will help ensure the safety of US military personnel working in the region and protect US national interests, he added. He reiterated that the US does not seek conflict with Iran ,but said the US "will continue to monitor the situation diligently and make adjustments to force levels as necessary given intelligence reporting and credible threats."
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The battle for the Tory party crown in the UK is revving up with a fresh round of voting in the leadership stakes as Boris Johnson is due to break cover and take part in television debates. Tory MPs will vote in the second bout of the contest to select Britain's next prime minister on Tuesday ahead of a live TV debate that will feature the front-runner and former foreign secretary, Johnson. Candidates need to gain at least 33 votes from MPs to remain in the race to reach the final run-off, which will see some 160,000 Tory members select the next prime minister. If all candidates pass the 33-vote threshold, the one with the lowest total will be eliminated and by the end of the week, four of the six current riders will be forced out, leaving the final two to go head-to-head for votes from the Tory grassroots.
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UK Chancellor of the Exchequer Philip Hammond is prepared to resign over Theresa May's plans to spend billions of pounds on projects to shore up her legacy, it is understood. Senior government sources have told the Press Association that tensions between Treasury and Number 10 officials have reached boiling point over the prime minister's spending intentions. Hammond is understood to be so against the plans that he is prepared to quit the government in what would be an extraordinary move just weeks before the PM leaves office. Tensions have surfaced over May's intention to spend up to GBP9 billion per year over three years on education, totalling GBP27 billion, including plans to build new schools and pay teachers higher wages, the well-placed source said. The Chancellor is thought to be particularly angry that the plans could tie the hands of her successor, which the source said was "immoral" and "irresponsible".
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EU ministers for European Affairs are due on Tuesday to consider opening membership talks with Balkan hopefuls Albania and North Macedonia, although their hands are tied as Berlin has not yet received the green light domestically to back the move. The EU's enlargement policy serves as a tool to encourage neighbouring states to carry out pro-democratic reforms, offering the prospect of membership in return.
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US President Donald Trump on Tuesday is set to announce his candidacy for a second four-year term at a rally in Florida. Trump's campaign for re-election in 2020 chose the 20,000-seat Amway Center in the centre of the state to make the announcement. The event is scheduled to start at 8 pm local time. A poll conducted Sunday by Fox News showed Trump trailing former vice president Joe Biden, the front-runner among a crowded field of Democrats, by 10 points. The poll also shows him nine points behind Senator Bernie Sanders, another leading contender. Trump tweeted about the polls on Monday, suggesting they were fake. "Only Fake Polls show us behind the Motley Crew. We are looking really good, but it is far too early to be focused on that. Much work to do! MAKE AMERICA GREAT AGAIN!"
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Securities Mentioned in Article
Security Name Price Change (%) Morningstar Rating
Ashtead Group PLC 2,285.00 GBX -0.17 -
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