(Alliance News) - With Britons locked away in their homes for much of 2020, it is perhaps no wonder that a company called Homeserve is faring well.
The Walsall, England-based home repairs and improvements provider said Tuesday it now sees full-year profit ahead of prior expectations following a better-than-expected first half.
Revenue for the six months to September 30 grew 17% to GBP536.7 million, but pretax profit slumped 49% to GBP10.1 million.
The fall in profit was due to the absence of exceptional gains recorded in the prior period, of GBP7.4 million, and higher acquisition-related amortisation of GBP23.0 million versus GBP16.3 million a year ago. Adjusted pretax profit was up 16% to GBP33.1 million. Homeserve lifted its dividend by 7% to 6.2p.
Homeserve said it exited the first half with the business "trading well", having recovered "earlier and more strongly" from the first global lockdown than originally anticipated. With the firm performing better than expected in the first half, Homeserve said it expects to deliver adjusted pretax profit for the current financial year "slightly ahead" of current consensus.
"The latest wave of lockdowns has made no fundamental difference to our operations, and the good news for us and our customers is that engineers can continue to work in peoples' homes. Based on what we see today, we are confident of delivering a healthy mix of organic and acquired revenue growth at the full year, with profits ahead of our prior expectations," said Founder & Chief Executive Richard Harpin.
The FTSE 100 stock was up 1.9% early Tuesday.
Here is what you need to know at the London market open:
----------
MARKETS
----------
FTSE 100: down 0.1% at 6,413.14
----------
Hang Seng: up 0.1% at 26,397.47
Nikkei 225: closed up 0.4% at 26,014.62
DJIA: closed up 470.63 points, 1.6%, at 29,950.44
S&P 500: closed up 1.2% at 3,626.91
----------
GBP: firm at USD1.3197 (USD1.3186)
EUR: firm at USD1.1850 (USD1.1840)
Gold: down at USD1,886.88 per ounce (USD1,889.70)
Oil (Brent): soft at USD44.05 a barrel (USD44.40)
(changes since previous London equities close)
----------
ECONOMICS AND GENERAL
----------
Tuesday's Key Economic Events still to come
0930 GMT UK Finance monthly card spending statistics
1100 GMT Ireland labour force survey
1100 CET EU construction output
0830 EST US advance monthly sales for retail & food services
0830 EST US import & export price indexes
0915 EST US industrial production
1000 EST US manufacturing & trade - inventories & sales
1630 EST US API weekly statistical bulletin
----------
The UK government foreign aid budget could reportedly be cut temporarily after public finances took a hit dealing with the coronavirus pandemic. The Times reported plans had been drawn up to pare back the commitment to spend at least 0.7% of national income on foreign aid to 0.5%, and the move could be announced in the chancellor's comprehensive spending review next week. A Treasury official did not deny the report but declined to comment on speculation about fiscal events. The UK has already said it would be cutting its global aid budget by GBP2.9 billion this year due to the economic hit of the coronavirus crisis, but that the 0.7% commitment towards international development would still be met.
----------
BROKER RATING CHANGES
----------
UBS CUTS NATIONAL GRID TO 'NEUTRAL' (BUY) - PRICE TARGET 975 (920) PENCE
----------
RBC RAISES BP TO 'SECTOR PERFORM' (UNDERPERFORM) - PRICE TARGET 290 PENCE
----------
HSBC CUTS PETROFAC TO 'REDUCE' ('HOLD') - TARGET 125 PENCE
----------
COMPANIES - FTSE 100
----------
Imperial Brands said revenue in the financial year to September 30 rose 3.1% to GBP32.56 billion, and pretax profit increased 28% to GBP2.17 billion from GBP1.69 billion. Revenue growth was supported by moderated tobacco volume declines, Imperial said, as well as share gains and a stronger second half price mix. Tobacco volumes were down 2.1% with "better market size trends" in several markets. The performance from its Next Generation Products - which includes products such as vapes - was "disappointing", the firm said. It did note, however, a moderation in NGP net revenue decline over the year, with the first half down 43% and the second half down 9%, leaving the total down 27% for the year as a whole. Imperial's dividend was chopped by a third to 137.7 pence from 206.6p, in line with a rebasing set out in May. "Although this has been a difficult year, the resilience of our tobacco business and the measures we have taken to improve our NGP operations reinforce my confidence in the future potential of the business. With a more disciplined focus and better execution we can realise significant value for our stakeholders over time," said Chief Executive Stefan Bomhard. Following a "difficult" year, Imperial expects to deliver a stronger financial performance in the 2021 financial year.
----------
Consumer credit scoring firm Experian said its performance in its first half was "resilient". Revenue for the half-year ended September 30 was USD2.49 billion, a slight dip on the USD2.50 billion a year prior. Organic revenue growth was 2% in the half and, the firm noted, 5% in the second quarter - at the top end of its guidance range. "The drivers of growth stemmed largely from North America and Brazil which offset COVID-19 related declines in other territories. The stand out performance across the group was Consumer Services, where we now have nearly 100 million free consumer memberships. For Q3 we expect organic revenue growth in the range of 3% to 5%," said Chief Executive Brian Cassin. Pretax profit in the period fell 5% to USD458 million. "Once the crisis abates, we believe we will be strongly positioned to take advantage of the secular growth trends and we are excited by the opportunities we see ahead," said Cassin. Experian's interim dividend was unchanged at 14.50 cents.
----------
COMPANIES - FTSE 250
----------
easyJet swung to a hefty annual loss in a financial year which saw passengers halve due to the pandemic. Total revenue in the year to the end of September fell 53% to GBP3.01 billion, with passengers down 50% to 48.1 million. The low-cost airline swung to a pretax loss of GBP1.27 billion from a profit of GBP430 million the year before. easyJet grounded its entire fleet for 11 weeks during the national lockdowns seen in the spring to early summer, as governments across the globe tried to halt the spread of Covid-19. "Whilst there was some recovery in demand as travel restrictions eased during the summer, widespread quarantine measures introduced in September once again eroded demand and consumer confidence to travel," the firm noted. Based on current travel restrictions, easyJet expects to fly no more than 20% of planned capacity for the first quarter of its new financial year. "At this stage, given the continued level of short-term uncertainty, it would not be appropriate to provide any further financial guidance for the 2021 financial year," easyJet said.
----------
COMPANIES - GLOBAL
----------
The US's top infectious disease scientist on Monday hailed early results from Moderna's Covid-19 vaccine as "stunningly impressive". "The idea that we have a 94.5%" effective vaccine is stunningly impressive," Anthony Fauci told AFP. "It is really a spectacular result that I don't think anybody had anticipated it would be this good."
----------
Airbnb said in its stock market filing Monday that its home-sharing model proved resilient during the global pandemic, as it posted a profit for the just-ended quarter. The San Francisco-based startup delivered a USD219 million profit in the three months ending in September, but nonetheless lost USD697 million in the first nine months of the year amid a 32% revenue drop as the Covid-19 outbreak crushed the travel sector. In its first public release of its financial data, Airbnb said its home-sharing model has been "resilient" compared with others in the sector during the crisis. "People wanted to get out of their homes and yearned to travel, but they did not want to go far or to be in crowded hotel lobbies," the document said. "Our platform has proven adaptable to serve these new ways of travelling." Airbnb revenue slipped to USD2.5 billion in the first nine months of 2020 from USD3.7 billion a year earlier. Its losses for the nine-month period were roughly in line with last year's level. The company has had mostly losing quarters, according to the filing, but has reported profits in the third quarter of each year from 2018.
----------
Huawei executive Meng Wanzhou finished the first day of a new round of extradition hearings Monday in Vancouver, as the two-year anniversary of her arrest by Canadian authorities approaches. Meng, chief financial officer of the Chinese tech giant, has been fighting extradition to the US, where she faces fraud and conspiracy charges related to alleged violations by Huawei of US sanctions on Iran. Her December 2018 Vancouver arrest plunged Canada-China relations into crisis. Days later, two Canadians were detained in China, accused by Beijing of espionage in what Ottawa has insisted was a retaliatory move, but which Beijing says was unrelated, while insisting Meng has violated no laws. Over the next two weeks, Meng's lawyers will continue their cross-examination of law enforcement involved in her detention.
----------
Separately, Huawei announced Tuesday it is selling its budget-priced smartphone brand Honor as an effort to save the unit, which is being crippled by US sanctions. Huawei said in a statement its consumer business had been under "tremendous pressure" due to the unavailability of components needed for its smartphone unit. The move comes as the company struggles amid sanctions imposed by the Trump Administration, which accuses it of facilitating spying for Beijing, a claim that Huawei has denied.
----------
Tuesday's Shareholder Meetings
Dunelm Group PLC - AGM
BMO Real Estate Investments Ltd - AGM
Mulberry Group PLC - AGM
Scancell Holdings PLC - AGM
Physiomics PLC - AGM
Marwyn Value Investors Ltd - AGM
Craneware PLC - AGM
Shaftesbury PLC - GM re share issue resolutions
SIG PLC - GM re new remuneration policy
----------
By Tom Waite; thomaslwaite@alliancenews.com
Copyright 2020 Alliance News Limited. All Rights Reserved.
