(Alliance News) - Associated British Foods on Tuesday awarded shareholders with a dividend as it regained confidence after Primark stores reopened last week and the discount fashion retailer once again becoming cash generative.
AB Foods declared a 6.2 pence a share payout for the 24 weeks to February 27 after not paying dividends for its previous financial year.
The company reported an 8% decline in pretax profit for the half-year to GBP275 million, as revenue fell by 17% to GBP6.31 billion year-on-year. On a constant currency basis, revenue came in 18% lower.
The performance was hurt by impact on its Retail division of the measures taken to control the spread of Covid-19, AB Foods explained.
Elsewhere, the Sugar arm continued to deliver a much-improved performance, driven in the first half by Illovo, the company said. Grocery delivered a strong result through a combination of successful new product launches and increased volumes through retail sales channels, it said. Profit at both AB Agri and Ingredients also were well ahead of last year.
Looking forward, AB Foods said, following the exceptional performance of its Grocery, Sugar, Agriculture and Ingredients businesses in the first half, it expects a softer performance in the second half.
"With the reopening of stores in England and Wales last week, and expected re-openings in some markets over the coming weeks, we will be trading at the end of April from 68% of our retail selling space, which increases to 79% if stores with restricted trading are included," the company noted. AB Foods added that it will increase its retail selling space with an additional nine stores opening in the second half.
However, the company noted that it continues to expect the profit for Primark to be somewhat lower than last year.
AB Foods shares were down 3.0% early Tuesday in London.
Here is what you need to know at the London market open:
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MARKETS
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FTSE 100: down 0.4% at 6,974.57
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Hang Seng: down 7.17 points at 29,098.98
Nikkei 225: closed down 2.0% at 29,100.38
DJIA: closed down 123.04 points, or 0.4%, at 34,077.63
S&P 500: closed down 0.5% at 4,163.26
Nasdaq Composite: closed down 1.0% at 13,914.77
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EUR: up at USD1.2060 (USD1.2029)
GBP: up at USD1.3996 (USD1.3984)
USD: up at JPY108.32 (JPY108.06)
Gold: down at USD1,769.03 per ounce (USD1,773.63)
Oil (Brent): up at USD67.73 a barrel (USD66.79)
(changes since previous London equities close)
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ECONOMICS AND GENERAL
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Tuesday's Key Economic Events still to come
0855 EDT US Johnson Redbook retail sales index
1630 EDT US API weekly statistical bulletin
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Unemployment in the UK edged down to 4.9% in the quarter ending February, the National Statistics Office said, with the jobless rate lower than expected. The UK unemployment rate was 0.9 percentage point higher than a year earlier but 0.1 percentage point down from 5.0% in the three months ended January. For December to February, an estimated 1.7 million people were unemployed, up 311,000 on a year before but down 50,000 on the quarter, the first quarterly decrease since October to December 2019. Market consensus, according to FXStreet, forecast the rate at unemployment rate in the quarter to February at 5.1%.
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Prime Minister Boris Johnson is set to announce steeper cuts to the UK's carbon emissions as he prepares to host the Cop26 international climate change summit later this year. Johnson is understood to be preparing to commit to cutting emissions by 78% by 2035 compared with 1990 levels. The announcement is scheduled to be made ahead of a major US summit on Thursday where President Joe Biden is expected to set out a new US target for reducing emissions. It would mark a significant step forward on the current UK commitment to cut emissions by 68% by 2030 – already seen as one of the most ambitious plans among developed nations.
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Producer prices in Germany rose 0.9% in March on February. They were up 3.7% on a year before, compared to a 1.9% annual increase in February.
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BROKER RATING CHANGES
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CREDIT SUISSE RAISES AB FOODS PRICE TARGET TO 2610 (2500) PENCE - 'OUTPERFORM'
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CREDIT SUISSE CUTS MONEYSUPERMARKET.COM TARGET TO 270 (290) PENCE - 'NEUTRAL'
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BERENBERG RAISES TEN ENTERTAINMENT PRICE TARGET TO 325 (220) PENCE - 'BUY'
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COMPANIES - FTSE 100
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Miner Rio Tinto left its annual production guidance unchanged after a "solid" first-quarter. Pilbara iron ore shipments rose 7% annually to 77.8 million tonnes in the first three months of the year. Pilbara output slipped 2% to 76.4 million tonnes, however. "Labour resource availability and weather challenges disrupted maintenance. Tropical Cyclone Seroja impacted mine and port operations in April," Rio Tinto explained. Bauxite output also was 2% lower, at 13.6 million, while production of mined copper was 9% lower year-on-year at 120,500 tonnes. For aluminium, production was 3% higher at 803,000 tonnes. For the whole of 2021, Rio continues to expect Pilbara iron ore shipments of between 325 million and 340 million tonnes. Guidance for bauxite, aluminium and mined copper also was unchanged.
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Cybersecurity provider Avast said it has made a "good start" to the year with continued demand for its security, privacy and performance solutions. Revenue for the three months to the end of March grew by 11% year-on-year to USD237.1 million. The Consumer Direct business continued to deliver good growth, Avast said, while the SMB business also sustained its positive momentum. For the first quarter, adjusted earnings before interest, tax, depreciation and amortization increased 10% to USD133.7 million, resulting in an adjusted Ebitda margin of 56.4%. However, Avast said guidance for its adjusted Ebitda margin for the full 2021 remains broadly flat versus the prior year.
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COMPANIES - FTSE 250
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Comparison website Moneysupermarket.com said its first-quarter performance was in line with expectations, given ongoing market disruption. Total revenue for the three months to the end of March was GBP85.5 million, a decline of 20% on the prior year. The company noted that its Insurance segment performance overall was broadly consistent throughout the quarter. Within Money, however, the quarter was hurt initially by lower year-on-year search demand for credit products and the continuation of tightened lending criteria. In Home Services, while savings available from energy switching were significantly lower than a year ago, energy performance improved from January into February and March. "We are moving ahead with our updated strategy, enhancing how we manage our data and starting to attract customers more efficiently. Several channels remain impacted by Covid-19, but we are well positioned to weather this period and return shortly to profitable growth," said Chief Executive Peter Duffy.
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COMPANIES - MAIN MARKET AND AIM
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Bakkavor reported a recovery in sales in the UK as lockdown restrictions are eased, with the fresh prepared food company first benefiting from schools returning in March. As result, Bakkavor said it will pay its previously suspended final dividend for 2019 of 4 pence per share. Group sales were down 4.4% on a year before in the 13 weeks to March 27, down 2.6% on a like-for-like basis. In the UK, like-for-like sales were down 6.4% in the entire quarter, but down just 3.5% in March. In the US, like-for-like sales were up 18% on levels seen at the end of 2020, while in China first-quarter sales were up 56% on a year before. The biggest rebound from the pandemic was seen in mainland China, while demand in Hong Kong remains reduced by continued virus restrictions.
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Tuesday's Shareholder Meetings
Audioboom Group PLC - AGM
Breedon Group PLC - AGM
GlobalData PLC - AGM
Herald Investment Trust PLC - AGM
Jadestone Energy Inc - GM re internal reorganisation
Porvair PLC - AGM
XP Power Ltd - AGM
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By Tom Waite; thomaslwaite@alliancenews.com
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