(Alliance News) - The following is a summary of top news stories Tuesday.
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COMPANIES
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Compass reported a sharp fall in annual earnings and axed its dividend as the coronavirus pandemic forced the contract caterer to close its operations. For the 12 months ended September 30, revenue fell 20% to GBP20 billion from GBP24.9 billion in financial 2019, and pretax profit slumped 86% to GBP210 million from GBP1.49 billion last year. Operating profit dropped 82% to GBP294 million from GBP1.63 billion. Compass axed its annual dividend, having paid out 40.0 pence per share in financial 2019. The company said it will keep future dividends under review and will restart payments when it is appropriate to do so. More encouragingly, Compass said in the fourth quarter it returned the business to profitability and is now cash neutral. This was achieved, it said, mainly through contract renegotiations to reflect the difficult trading environment, continued discipline in terms of costs, and improvement in volumes.
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Pennon Group said profit in the first half narrowed amid a fall in revenue as well as increased operating expenses, but it expects "continued outperformance" going forward. The Exeter-based water utility and waste management company saw its pretax profit for the six months to September 30 narrow 48% to GBP61.9 million from GBP119.4 million a year prior. Operating expenses increased 14% year-on-year to GBP103.2 million from GBP90.8 million. Revenue was down 8.2% to GBP299.2 million from GBP325.8 million a year before. Pennon halved its interim dividend to 6.77 pence per share from 13.66 pence a year before.
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Intertek Group said it is strongly positioned for growth going forward, despite weak performance so far in 2020. The London-based assurance, inspection, product testing and certification company said revenue rebounded in the July-October period in Products & Trade in all regions, while trading conditions remain challenging in the Resources sector. Revenue for the four months to the end of October declined by 9.9% to GBP941.0 million from GBP1.05 billion. On a constant currency basis, it fell by 6.2%. For the first ten months of 2020, revenue decreased by 8.7% year-on-year to GBP2.27 billion. On a constant currency basis, it was 7.2% lower on the prior year. Like-for-like revenue was down 10% and 8.8% in the four and 10 months to the end of October, respectively.
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Shares of UK property investment and development company Segro have started trading on Euronext Paris. Segro noted it will maintain its London listing and will not issue any new shares in relation to the Paris listing. Previously in explaining the reason for the European listing, Segro said the move is particularly important with the looming end of the Brexit transition period at the end of the year.
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Phoenix Group Holdings, noting interest from third parties for its European business, confirmed it is assessing a range of strategic options to maximise value for shareholders, but said there was no certainty that a transaction will be achieved. On Monday, Bloomberg reported that the life-insurance consolidator, was considering selling international operations to focus on the UK, citing people with knowledge of the matter. The financial news agency said a potential deal could be worth EUR650 million. Phoenix Europe is a specialist in the European life insurance market, with operations across Ireland, Germany and the UK offshore savings market. In 2019, Phoenix Europe contributed GBP52 million of the group's GBP810 million in operating profit. This was up from GBP22 million in 2018.
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CRH said it delivered a robust performance in a challenging trading environment in the third quarter, and expects earnings to grow in 2020. For the nine months to September 30, like-for-like sales were down 3% to USD20.6 billion, but earnings before interest tax depreciation and amortisation rose 2% to USD3.4 billion, with an Ebitda margin up one percentage point at 16.6%. For the third quarter alone, like-for-like sales also fell 3%, but Ebitda was up 3%. Third-quarter sales in the firm's Materials business in the Americas down 7% and European sales down 2%. CRH's Building Products unit partially offset this in the third quarter, growing 4%. Ebitda was up 3%, 2% and 5% in the three units respectively in the quarter.
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MARKETS
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London shares were higher as US President-elect Joe Biden is to begin his transition into the White House and on optimism that coronavirus vaccines could soon be rolled out around the world. Brent oil was trading at its highest level since March. US stock market futures were pointed to a higher open.
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FTSE 100: up 1.0% at 6,399.42
FTSE 250: up 0.8% at 19,743.04
AIM ALL-SHARE: flat at 1,034.92
GBP: up at USD1.3360 (USD1.3289)
EUR: up at USD1.1882 (USD1.1821)
GOLD: down at USD1,812.05 per ounce (USD1,833.31)
OIL (Brent): up at USD46.42 a barrel (USD45.78)
(changes since previous London equities close)
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ECONOMICS AND GENERAL
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The number of weekly registered deaths involving coronavirus has exceeded 2,000 in England and Wales for the first time since May, official figures showed. There were 2,466 deaths involving Covid-19 registered in the week ending November 13 in England and Wales, the Office for National Statistics said. This is the highest number since the week ending May 22, when 2,589 deaths were registered, and a rise of 529 deaths, or 27%, from the previous week ended November 6. The Covid-19 deaths, which rose for the tenth consecutive week, made up a fifth of the overall deaths in England and Wales in the week ending November 13. The overall number of deaths in hospitals, private homes and care homes was above the five-year average – the expected number of deaths for this time of year. All English regions, and Wales, saw a higher number of deaths than the five-year average.
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Travellers arriving in England will be able to end their quarantine period with a negative coronavirus test after five days from December 15, UK Transport Secretary Grant Shapps announced. The travel industry welcomed the policy but described it as "long overdue". Under the new rules, passengers who arrive from a destination not on the government's travel corridors list will still need to enter self-isolation. But they can reduce the 14-day period by paying for a test from a private firm on or after day five at a cost of GBP65-GBP120. Results will normally be issued in 24 to 48 hours. This means people could be released from quarantine six days after arrival. The change does not apply to people arriving in Northern Ireland, Scotland or Wales, who must continue to self-isolate for 14 days.
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US President Donald Trump came his closest yet to admitting election defeat Monday after the government agency meant to ease Joe Biden's transition into the White House said it was finally lifting its unprecedented block on assistance. Trump acknowledged it was time for the General Services Administration to "do what needs to be done." In the same tweet he insisted that he was still refusing to concede, saying: "Our case STRONGLY continues, we will keep up the good fight, and I believe we will prevail!" But for the Republican to sign off on the GSA's decision to work with the Biden transition team signalled that even he sees the writing on the wall after three weeks of evidence-free claims that the November 3 election was stolen from him. This means that Biden's team will now have access to funds, office space and the ability to meet with federal officials.
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Biden spoke with the heads of the EU institutions and NATO on Monday in a round of calls seen as part of his efforts to repair tattered transatlantic ties. Biden "underscored his commitment to deepen and revitalize the US-EU relationship," a statement from his office said after a call with Ursula von der Leyen, the head of the European Commission. In a marked difference in tone from Trump, who branded the EU a "foe" and accused it of ripping off the US in trade, Biden expressed his hope that the two sides would "cooperate on common challenges." Von der Leyen sounded upbeat and optimistic – a sign of relief in many European capitals at the prospect of smoother ties after four years of conflict and tension under Trump.
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Germany's gross domestic product growth in the third quarter was upwardly revised from initial figures, data from Federal Statistic Office showed on Tuesday, though Europe's largest economy remained slightly smaller than it was a year ago. Germany's economy grew by a record 8.5% in the three months to September on the quarter before, compared to a preliminary estimate of an 8.2% quarterly expansion and after the record slump of 9.8% in the second quarter. The expansion was supported by a rebound in household consumption of 11%, the Destatis report noted, and strong fixed investment in machinery and equipment of 16%. In addition, net exports positively contributed to the growth, as exports expanded by 18% while imports rose by 8.5%. Year-on-year, Germany's GDP shrank by 4.0% in the third quarter following a record contraction of 11% in the second quarter.
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