UK TOP NEWS SUMMARY: Smith & Nephew Hires New CEO, Reckitt New CFO

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

Alliance News 21 October, 2019 | 11:01AM
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(Alliance News) - The following is a summary of top news stories Monday.

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COMPANIES

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Smith & Nephew said it has appointed former Roche executive Roland Diggelmann as the company's new chief executive officer, effective from November 1. Diggelmann, who joined company's board as a non-executive director in March 2018, is a medical technology executive and most recently was CEO of Roche Diagnostics, division of Roche Holdings AG, leaving Roche in 2018. Diggelmann will succeed Namal Nawana, who will step down from the board and his position as CEO by "mutual agreement" on October 31, "to pursue other opportunities outside of the UK". The company added that Nawana will provide assistance to Diggelmann until December 31, in order to ensure a smooth transition.

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Reckitt Benckiser Group said it has hired the finance chief of Dutch supermarket chain Ahold Delhaize to be its new chief financial officer. Reckitt said current CFO Adrian Hennah will retire from the FTSE 100 consumer healthcare household products firm next year. Hennah - CFO since 2013 - will retire from his role when Jeff Carr joins the firm, expected some time before April 9. Hennah will remain at RB until his retirement date of October 21, 2020 in order to ensure a "seamless transition". Carr has been CFO of Ahold Delhaize since 2011, having previously served in senior roles at UK food producer and clothes retailer Associated British Foods, budget airline easyJet, and bus and trains operator First Group. He is currently a non-executive director at home improvement products retailer Kingfisher.

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Online food ordering platform Just Eat said its third quarter revenue growth was "strong" with rising orders despite changing consumer tastes, and the firm retaining full year forecasts. For the three months ended September, revenue grew 25% on the year prior to GBP247.5 million with orders up 16% to 62 million during the period. Within the UK, orders rose 8% to 33 million. Over the nine months ended September, revenue was 28% higher on the year before at GBP717.8 million. For 2019, Just Eat remains confident of achieving revenue of between GBP1.0 billion and GBP1.1 billion with underlying earnings before interest, taxes, depreciation & amortisation between GBP185 million and GBP205 million.

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Prudential said it has completed the demerger of M&G, and shares of M&G have started trading on the London Stock Exchange's main market. The life insurance company announced plans to demerge M&G, its UK & Europe business, back in March 2018, resulting in two separately listed companies. Prudential itself will now operate in Asia, Africa and the US. Shareholders have retained their shares in Prudential and also have received shares in M&G.

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SAP said it has collaborated with Microsoft for first-in-market cloud migration offerings after its earnings surged in the third quarter. The German enterprise software company reported on Monday 37% annual growth in cloud revenue in the third quarter to EUR1.79 billion, with cloud & software revenue up 12% to EUR5.63 million. This resulted in total revenue increase of 13% to EUR6.79 billion. Operating profit increased 36% year-on-year to EUR1.68 billion, and was up 15% at constant currencies. "In April we promised a stronger focus on profit and here we go: the third quarter marks yet another milestone in delivering on this commitment," highlighted Chief Financial Officer Luka Mucic.

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MARKETS

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The FTSE 100 was trading flat at midday, with a stronger pound and Brexit optimism bolstering domestically exposed banks such as Royal Bank of Scotland and Lloyds Banking Group. At the bottom of the index was Smith & Nephew on news of its chief executive departing and Just Eat, despite reporting solid third-quarter growth. Stocks in the US are pointed to a higher open, with the Dow Jones Industrial Average seen up 0.1% and both the S&P 500 and Nasdaq Composite seen 0.2% higher. Though Monday is quiet in the US for company reports, the week will heat up with the likes of Microsoft, Procter & Gamble, Boeing and Amazon.com releasing results.

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FTSE 100: up 0.2% at 7,162.70

FTSE 250: up 0.1% at 20,245.26

AIM ALL-SHARE: up 0.4% at 884.56

GBP: up at USD1.2977 (USD1.2885)

EUR: firm at USD1.1168 (USD1.1140)

GOLD: flat at USD1,490.89 per ounce (USD1,490.45)

OIL (Brent): down at USD58.82 a barrel (USD59.62)

(changes since previous London equities close)

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ECONOMICS AND GENERAL

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Boris Johnson is set for a showdown with Commons Speaker John Bercow as the UK prime minister pushes for a knife-edge Commons vote on his Brexit deal. Bercow, who Tory Brexiteers have accused of being pro-Remain, will rule on whether the government can bring a so-called "meaningful vote" on its plans. If the Speaker blocks the move, focus will switch to the government bringing its Withdrawal Agreement Bill before MPs on Monday, with a vote on its second reading on Tuesday. Ministers insist they "have the numbers" to push the agreement through, but the parliamentary situation appears to be on a tightrope. Labour has made clear it will try to hijack the legislation by putting down amendments for a second Brexit referendum and a customs union with the EU.

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UK house prices experienced their lowest October uptick in more than 10 years, Rightmove said, with the looming Brexit deadline deterring potential sellers. The Rightmove Monthly House Price index showed average prices rose by 0.6% from September and down 0.2% on an annual basis, during what is traditionally a period where prices increase month-on-month. Over the past 10 years, prices have hiked by 1.6% in October. The number of sellers entering the market was down 14% year-on-year, which Rightmove attributed to the lethargic prices and the incoming Brexit deadline. Number of sales agreed fell by 0.5% year-on-year but Rightmove however, said sales that have broken down are at their lowest level since 2015.

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Consumer confidence in the UK decreased in the third quarter, returning to a level last seen in the final quarter of 2018, according to the latest Deloitte Consumer Tracker survey. UK consumer confidence fell by one percentage point to 9% in the third quarter of 2019. The analysis, based on the response of more than 3,000 consumers in the UK between September 27 and 30, revealed sentiment on job security was three points lower year-on-year at 8%. At the same time, confidence around job opportunities and career progression also fell by five points to 6% over the same period. According to Deloitte's latest survey, businesses are intensifying cost control, with 70% of employers expecting to reduce hiring in the next 12 months.

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Germany's industrial products producer prices saw a marginal increase in September compared to the previous month but slipped slightly year on year, the German government reported. The September PPI reading came in at 104.6, compared to 104.5 in August, a 0.1% increase. The PPI printout in September 2018 was 104.7. The Statistisches Bundesamt said energy prices were down 1.9% year on year but were up 0.4% compared to August. On an annual basis, prices of natural gas distribution decreased by 6.8% and prices of petroleum products by 7.6%, whereas prices of electricity rose by 3.7%.

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Securities Mentioned in Article

Security Name Price Change (%) Morningstar
Rating
Smith & Nephew PLC 1,734.50 GBX 2.21
Reckitt Benckiser Group PLC 6,037.00 GBX 0.13

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