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LONDON BRIEFING: Imperial Brands' Alison Cooper Joins Exodus Of CEOs

(Alliance News) - UK company chiefs continued to head for the exits on Thursday, as Imperial ...

Alliance News 3 October, 2019 | 8:11AM
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(Alliance News) - UK company chiefs continued to head for the exits on Thursday, as Imperial Brands said Chief Executive Officer Alison Cooper will leave the FTSE 100-listed cigarette maker once a successor has been appointed.

Cooper was joined in making plans to depart the top job by Andrew Pardey at FTSE 250 miner Centamin. They follow Dave Lewis, whose surprise plan to step down as Tesco chief executive was announced on Wednesday. That day also saw departure announcements for two founders, Martin Gilbert at Aberdeen and Vernon Hill at Metro Bank.

Imperial Chair Mark Williamson thanked Cooper - boss since 2010, having been at the firm for two decades - for having "worked tirelessly and with great energy and passion" and the "tremendous contribution" she made to the company.

"During her tenure as CEO the business has been significantly simplified and reshaped to strengthen its long-term growth potential, and more than GBP10 billion in dividends has been returned to shareholders," Williamson added. "I am pleased that Alison has committed to continue to lead the business until a successor is appointed, ensuring an orderly transition of responsibilities."

Cooper will remain at the business until a new boss is chosen, in the meantime continuing to focus on the asset divestment programme at the company. Imperial is targeting GBP2 billion in disposal proceeds by May 2020.

Last week, Imperial Brands cut its revenue guidance due to a challenging vaping and e-cigarette market in the US.

Imperial predicted net revenue growth for its financial year, which ended on Monday, would be 2%, down from its previous 2.5% growth forecast.

Imperial noted that the US next-generation product environment had "deteriorated" over the last quarter in the wake of increased regulation, with Massachusetts last week temporarily banning the sale of all forms of e-cigarettes - the first state to enact an outright ban.

Imperial shares were up 1.1% in early trade on Thursday.

Here is what you need to know at the London market open:

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MARKETS

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FTSE 100: down 0.2% at 7,111.49

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Hang Seng: flat at 26,049.13

Nikkei 225: closed down 2.0% at 21,341.74

DJIA: closed down 494.42 points, 1.9%, at 26,078.62

S&P 500: closed down 1.8% at 2,887.61

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GBP: down at USD1.2276 (USD1.2300)

EUR: flat at USD1.0949 (USD1.0951)

Gold: soft at USD1,500.72 per ounce (USD1,501.40)

Oil (Brent): soft at USD57.64 a barrel (USD57.97)

(changes since previous London equities close)

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ECONOMICS AND GENERAL

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Thursday's Key Economic Events still to come

China National Day Golden Week continues. Shanghai market closed, HK open.

German National Unity Day. Financial markets closed.

0930 BST UK CIPS-Markit Services purchasing managers' index

0930 BST UK official holdings of international reserves

0955 CEST Germany services PMI

1000 CEST EU eurozone services PMI

1100 CEST EU producer price index

1100 CEST EU retail trade

0730 EDT US Challenger Job-Cut Report

0945 EDT US services PMI

0945 EDT US Bloomberg Consumer Comfort Index

1000 EDT US ISM non-manufacturing report on business

1030 EDT US EIA weekly natural gas storage report

1630 EDT US foreign central bank holdings

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UK Prime Minister Boris Johnson is preparing for 10 days of "intensive discussions" as he seeks backing from EU leaders for his Brexit blueprint. The prime minister has said he wants to get an agreement in place for the EU summit on October 17, paving the way for Britain to leave with a deal at the end of the month. With the agenda for such meetings generally set several days in advance, he acknowledged there was "very little time" left. So far, however, European leaders have reacted coolly to the plan, set out in a letter to European Commission President Jean-Claude Juncker on Wednesday, to resolve the issue of the Northern Ireland backstop.

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Business activity in Ireland's service sector expanded at the slowest pace in over six years, according to a survey released. The AIB services purchasing managers' index fell to 53.1 in September from 54.6 in August, signalling the weakest rise in business activity since May 2013. AIB attributed this to a softening in both the domestic and foreign market conditions. Composite output was its lowest since March 31, with a PMI reading of 51.0 in September, down from 51.8 in August. Manufacturing output declined for the third month running in September, AIB said. The AIB manufacturing PMI read 48.7 in September, according to the reading released on Tuesday, up marginally from 48.6 in August.

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Hours after getting the green light from the World Trade Organization, Washington moved to retaliate against the EU over illegal subsidies for Airbus SE, announcing tariffs on USD7.5 billion worth of European goods starting October 18. The ruling is the largest arbitration award in WTO history and a landmark moment in the longstanding Airbus-Boeing battle, which threatens to intensify already strained trade relations between the US and the EU. The top US trade negotiator said he expects to begin talks with Brussels soon to try to resolve the dispute. But US President Donald Trump hailed the decision, calling it a "big win" for the US and claiming credit for the outcome of the 15-year-old case. The EU will face tariffs of 10% on aircraft and 25% on other goods, like cheeses, whiskey and olive oil, as some industrial products, largely from the four countries that support Airbus: France, Germany, Spain and the UK.

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Trump lashed out against the investigation into his dealings with Ukraine, hours after House Democratic leaders warned the White House to expect a subpoena for documents. Democrats accused the administration of "flagrant disregard" of previous requests and said that refusal could be considered an impeachable offence. Separately, the Democrats accused Trump of "an incitement to violence" against a national security whistleblower and advised him and his administration not to intimidate potential witnesses in the impeachment inquiry. The whistleblower exposed a July phone call that President Trump had with Ukrainian President Volodymyr Zelenskiy in which he pressed for an investigation of Democratic political rival Joe Biden and his family.

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North Korea has confirmed it tested a new submarine-launched ballistic missile, calling it a "significant achievement" in its efforts to contain external threats and bolster its military power. The test-firing on Wednesday was North Korea's first of a submarine-launched missile in three years and came ahead of a resumption of nuclear diplomacy with the US this weekend. Some experts say North Korea wants to show to the US what would happen if diplomacy fails again.

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Japan's services sector remained resilient in September, IHS Markit said, but new orders grew at a weak pace relative to 2019. The seasonally adjusted services business activity index from Jibun Bank edged down to 52.8 in September from August's 22-month peak of 53.3. IHS Markit said the latest survey data marked the 36th month of expansion in Japan's service sector. The composite PMI, which includes manufacturing as well, slipped to 51.5 in September from August's eight-month high of 51.9, signalling the "second-quickest" rise in private sector output seen so far this year. IHS Markit noted that the Japanese expansion remained unbalanced, with a resilient service sector offsetting a manufacturing downturn. The Jibun Bank Japan manufacturing purchasing managers index fell to 48.9 in September from 49.3 in August, according to figures released on Tuesday.

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BROKER RATING CHANGES

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HSBC RAISES NICHOLS TO 'BUY' ('HOLD') - TARGET 1730 PENCE

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JEFFERIES RAISES SPIRE HEALTH TO 'HOLD' (UNDERPERFORM) - TARGET 106 (98) PENCE

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COMPANIES - FTSE 250

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Stagecoach reaffirmed its annual guidance as it reported an in-line performance at its bus operations. The public transport operator said it has been pleased by a strong performance in its London bus business, with a favourable service performance resulting in higher-than-anticipated "Quality Incentive Contract" income. For the twenty weeks to September 14, like-for-like regional bus revenue growth was 1.0%, lower than anticipated. "We continue to see regional variations in performance, with patronage trends typically strongest in urban areas and the southern half of the country," Stagecoach said. Turning to its rail operations, Stagecoach said it is continuing to pursue claims against the UK secretary of state for transport regarding decisions to disqualify the firm from three rail franchise competitions. The three cases are due to be heard in the High Court in early 2020.

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The boss of gold miner Centamin intends to retire. The nomination committee, chaired by Edward Haslam, is now initiating a search process to find a replacement for Andrew Pardey, who will remain in post while assisting the search process and facilitating an handover to his appointed successor, within his 12-month notice period. The firm added that the lower end of its annual production guidance "remains achievable", having previously communicated that third quarter output was behind expectations due to reduced open pit mining rates on the higher-grade Stage 4 West wall of its Sukari mine in Egypt.

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Assura expressed confidence for the reminder of its financial year following accelerated activity in the first half. The care property investor said its current portfolio comprises of 560 properties. During the six months to the end of September, Assura said it has completed nine acquisitions at a cost of GBP34.3 million and 14 disposals for GBP18 million in cash, at a "small" premium to book value at March. Assura said it has completed two developments at a cost of GBP8.4 million in the half-year. Annualised rent roll stood at GBP104.4 million as of Monday, taking account of additions, disposals and rent reviews. Gross debt was GBP757 million with undrawn facilities of GBP250 million, the company noted.

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COMPANIES - OTHER MAIN MARKET AND AIM

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Ted Baker reported a "challenging" first half, marred by "unprecedented and sustained" levels of promotional activity across the sector. Revenue for the 28 weeks to August 10 was down 0.7% at GBP303.8 million, with the company swinging to a pretax loss of GBP23.0 million from a GBP24.5 million profit a year ago. Exceptional costs of GBP17.4 million were largely incurred as a result of actions taken to "strengthen the brand" and include GBP11.8 million in respect of restructuring the Asian businesses and GBP3.5 million related to a footwear acquisition at the start of 2019. "The financial results we delivered in the first half were behind our expectations. Trading in the second half has started slowly, not helped by the unseasonably warm weather in September, and this will have an impact on the full year outcome," Ted Baker warned.

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CMC Markets said net trading revenue for the six months to the end of September was "strong", with the spread-betting firm pleased with its interim performance. The online trading platform said revenue for its stockbroking business is expected to increase to around GBP14 million for the half, more than double the GBP5.5 million generated a year ago. The contracts-for-difference unit generated client income "only slightly down" on last year. Following the strong performance in the half year, CMC said it is confident that net operating income will exceed GBP170 million for the full-year, with pretax profit expected to increase. "I am pleased with our first half performance. This time last year we had the uncertainty of regulatory change hanging over the sector and the uncertainty of how clients would react to the changes in minimum margin levels. A year on, we are seeing clients adapting to the new changes and still maintaining their interest in the products and the trading platforms we offer," said CMC Chief Executive Peter Cruddas.

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COMPANIES - INTERNATIONAL

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Anheuser-Busch InBev said the over-allotment option for the initial public offering of its Asia Pacific subsidiary in Hong Kong has been fully exercised, leading to the issue of 217.8 million additional shares. The full exercise of the option raised HKD5.88 billion, or USD750 million, in additional gross proceeds. Ab InBev will use the money for debt repayment, it said. The brewer will continue to hold an 87% stake in Budweiser APAC. On Monday, Budweiser APAC started trading in Hong Kong after its IPO was priced at HKD27.00 per share, initially raising HKD38.2 billion, or around USD4.9 billion, in gross proceeds.

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Thursday's Shareholder Meetings

Purplebricks Group

Photo-Me International

Arcontech Group

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By Tom Waite; thomaslwaite@alliancenews.com

London Briefing is available to subscribers as an email newsletter. Contact info@alliancenews.com

Copyright 2019 Alliance News Limited. All Rights Reserved.

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Securities Mentioned in Article

Security Name Price Change (%) Morningstar
Rating
Nichols PLC 1,560.00 GBX -2.50 -
Imperial Brands PLC 1,780.60 GBX -0.63
Spire Healthcare Group PLC 117.51 GBX -0.25 -

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