LONDON MARKET OPEN: FTSE Opens Higher; UK Jobs, Trump Speech In Focus

(Alliance News) - The FTSE 100 opened higher on Tuesday, helped by share price gains for ITV, ...

Alliance News 12 November, 2019 | 8:31AM
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(Alliance News) - The FTSE 100 opened higher on Tuesday, helped by share price gains for ITV, Experian and Vodafone.

In London, focus is on UK jobs data later in the morning, while internationally investors await an appearance from US President Donald Trump in hopes he will provide an update on a trade deal with China.

The FTSE 100 was 39.32 points lower, or 0.5%, at 7,320.06 early Monday. The FTSE 250 was down 65.24 points, or 0.3%, at 20,292.39, and the AIM All-Share was down 0.1% at 890.78.

The Cboe UK 100 index was up up 0.3% at 12,456.74. The Cboe UK 250 was down 0.2% at 18,300.54, and the Cboe UK Small Companies was down 0.1% at 11,283.12.

In European equities, the CAC 40 index in Paris was up 0.2% and the DAX 30 in Frankfurt up 0.3% in early trade.

In Tokyo, the Nikkei 225 index closed up 0.8%. In China, the Shanghai Composite ended 0.2% higher, while the Hang Seng index in Hong Kong closed up 0.4%.

Investors are waiting "nervously" for further news on the US-China trade situation, said Lloyds Banking.

"With investors anticipating a potential trade accord between the US and China later this month, the most keenly anticipated event in the afternoon session will be a speech from President Trump during a luncheon at the Economic Club of New York," said Lloyds.

Elsewhere, the economic events calendar on Tuesday has UK unemployment data at 0930 GMT and ZEW economic sentiment surveys for the eurozone and Germany at 1000 GMT.

FXStreet consensus sees the UK unemployment rate steady at 3.9% in September, while annual average earnings growth, both including and excluding bonuses, is also expected to remain firm at 3.8%.

"This morning's data are expected to reaffirm the broad picture of a relatively tight labour market, although there are signs that it may no longer be tightening further. In particular, we look for a 120k fall in employment in the latest three months and a slight decline in regular pay growth (excluding bonuses) to 3.7%," said Lloyds.

Sterling was quoted at USD1.2833 early Tuesday, down from USD1.2867 at the London equities close on Monday.

In London, ITV saw its shares rise 2.5%. The broadcaster said its performance in the first nine months of the year was as expected, with the FTSE 100 constituent set to deliver its full-year guidance.

Total advertising revenue was up 1% in the third quarter, at the top end of guidance. The fourth quarter is expected to deliver a result somewhere between flat to 1% higher, and total advertising revenue should be down 2% across the full-year.

For the nine months, Broadcast & Online revenue was down 3% to GBP1.46 billion, with ITV total advertising down 3%, as guided, and online revenue up 23%. ITV Studios revenue was up 1% to GBP1.12 billion.

"ITV's overall performance for the first nine months of 2019 was as we expected, and although the economic environment continues to be uncertain, we are making good progress in executing our strategy," said Chief Executive Carolyn McCall.

Credit checking firm Experian upped its annual guidance and interim payout following earnings growth in the first half of its current financial year, sending shares 2.1% higher.

Pretax profit in the six months to the end of September improved by 2.1% to USD480 million from USD470 million, with revenue growing by 5.5% to USD2.50 billion from USD2.36 billion.

Looking ahead, the Dublin-headquartered company said it now expects full-year organic revenue growth in the 7% to 8% range, at the upper end of previous guidance. First-half organic revenue growth was 7%.

Vodafone shares were 1.9% higher after the telecommunications firm raised its full-year outlook.

Revenue for the half-year to September 30 came in at EUR21.94 billion, up 0.4% from EUR21.85 billion a year ago. The firm's pretax loss narrowed to EUR511 million from EUR2.85 billion a year ago, largely due to an impairment of EUR3.50 billion booked in the comparative period.

Adjusted earnings before interest, tax, depreciation and amortisation was EUR7.11 billion, up 2.7% from EUR6.92 billion a year ago.

Organic service revenue was up 0.3% in the first half as the second quarter returned to growth, of 0.7%, following a 0.2% fall in the first three months of the financial year.

Vodafone now expects adjusted Ebitda of EUR14.8 billion to EUR15.0 billion for the current financial year, previously seen between EUR13.8 billion and EUR14.2 billion, implying organic growth of 2% to 3%.

This new guidance includes a EUR800 million benefit from the Liberty Global acquisitions in Germany and Central Europe and Vodafone's disposal in New Zealand - excluding this, the company is still on track to achieve the upper half of its original guidance range.

"I am pleased by the speed at which we are executing on the strategic priorities that we announced this time last year. This is reflected in our return to top-line growth in the second quarter, which we expect to build upon in the second half of the year in both Europe and Africa," said Chief Executive Nick Read.

Vodafone declared an interim dividend of 4.50 cents, down 7.0% from the 4.84c paid out a year before.

Commercial property investor and manager Land Securities, down 1.0%, reported a swing to loss for it first half as it reported "unsettled" market conditions.

Revenue for the half to September 30 was GBP369 million, down from GBP378 million a year ago. The company swung to a pretax loss of GBP147 million from a profit of GBP42 million, largely due to a GBP304 million net deficit on the revaluation of investment properties.

EPRA net asset value per share was 1,296 pence at the end of September, down 3.2% from 1,339p a year ago.

Looking ahead, Landsec said it expects the retail market to remain challenging due to company voluntary arrangements and administrations. Real estate fundamentals in London are "sound", however.

"Landsec had a good first half, delivering resilient results in unsettled market conditions...We have been proactive in the tough retail market, maintaining high occupancy and protecting income," said Chief Executive Robert Noel.

"With a general election next month and the UK's proposed exit from the EU further delayed, we remain alert to market risks. However, Landsec enters the next six months with confidence; we're in a strong financial position, have an exciting development pipeline and are agile enough to seize value-creating opportunities as we see them," he added.

B&M European Value Retail slumped 8.5% as it reported interim profit was hit by an impairment.

Revenue for the half to September 29 was up 22% to GBP1.90 billion, while B&M UK stores revenue was up 14%, including like-for-like sales growth of 3.7%.

"Trading so far in Q3 has seen continued solid LFL sales growth in the B&M UK stores business and it is well placed for the 'golden quarter' trading," the company said.

B&M's pretax profit, however, dropped 71% to GBP32.2 million due to a GBP59.5 million impairment charge related to Jawoll, its German unit. On its German operations, the company said it is undertaking a strategic review to determine the future of the business after a "continued disappointing financial performance".

B&M held its interim dividend at 2.7p per share.

"We have delivered a solid overall first half performance driven by our core B&M UK stores business which constitutes 86% of Group sales. Our existing stores performed consistently well through the last two quarters, generating half year LFLs of 3.7%. The current crop of new stores also achieved especially strong results. The core business has made a solid start to the second half of the financial year," said Chief Executive Simon Arora.

By Lucy Heming; lucyheming@alliancenews.com

Copyright 2019 Alliance News Limited. All Rights Reserved.

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Securities Mentioned in Article

Security Name Price Change (%) Morningstar
Rating
ITV PLC 65.03 GBX -2.56 -
Experian PLC 3,130.00 GBX 1.49
B&M European Value Retail SA 454.20 GBX -1.48 -
Land Securities Group PLC 534.40 GBX -4.35 -
Vodafone Group PLC 108.80 GBX 1.36

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