(Alliance News) - The following is a summary of top news stories Wednesday.
----------
COMPANIES
----------
Spain's top football league said it has agreed in principle to sell 10% of its business to private equity firm CVC Capital Partners for EUR2.7 billion to help finance its long-term growth plans. The deal for the ownership stake, the first of its type by a major European league, values La Liga at around EUR24.2 billion, the league said in a statement.
----------
Legal & General revealed earnings "well above" pre-virus levels in a strong first half. The 185-year old insurer posted operating profit of GBP1.08 billion for the first half of 2021, up 14% on a year ago, and earnings per share of 17.78p, up sharply on the 4.89p achieved a year ago and 21% higher than 2019. "We remain confident in achieving our five-year cumulative financial ambitions. In the first half of 2021, we continued to build on the good start we made in 2020. We expect to deliver double-digit growth in operating profit at the full year," the company said. L&G lifted its interim payout by 5% to 5.18p.
----------
Housebuilder Taylor Wimpey raised full-year guidance as the UK property market continues to boom. Revenue for the first half of 2021 surged to GBP2.20 billion from GBP754.6 million a year ago, while the construction company swung to a pretax profit of GBP287.5 million from a loss of GBP39.8 million. It highlighted positive momentum in the half-year, with the net private sales rate improving to 0.97 per week, up from 0.70 a year ago, and the opening of 37 new outlets in the period. "The UK housing market has continued to perform strongly across all our geographies in the first half of the year. Having entered 2021 with an excellent order book, we have delivered a strong first half performance, benefiting, as anticipated, from delayed Q4 2020 completions and the continuing strength in the housing market," said Taylor Wimpey. Forward indicators remain robust, it added, and build cost and supply chain pressure is being fully offset by "healthy" house price growth. Taylor Wimpey now expects full-year operating profit to be GBP820 million, above the top end of consensus. This compares with just GBP300.3 million in 2020, and approaches the pre-pandemic level of GBP850.5 million in 2019. The company declared an interim dividend of 4.14p.
----------
Jet engine maker Rolls-Royce said it has agreed to sell its Bergen Engines medium-speed liquid-fuel and gas engines business to Langley Holdings for an enterprise value of EUR63 million. "Sale proceeds of EUR70m from the transaction together with EUR40m of cash currently held within Bergen Engines which is to be retained by Rolls-Royce, will be used to help rebuild the Rolls-Royce balance sheet," it said. This follows an aborted deal earlier in the year after the Norwegian government put the brakes on the proposed sale of the Bergen unit to TMH Group, a privately owned company headquartered in Russia that makes locomotives and rail equipment. Rolls-Royce had planned to sell Bergen to TMH for EUR150 million. The Norwegian government blocked the sale on national security concerns, as Norway's army is among Bergen's customers. Rolls-Royce on Wednesday said it has notified the Norwegian government of the agreed sale. Bergen Engines will be operated by Langley Group as a stand-alone business.
----------
Toyota Motor reported first-quarter earnings that beat pre-pandemic levels but warned of uncertainty ahead as it left its forecasts unchanged. Revenue in the first quarter of the financial year ending March 2022 surged 73% year-on-year, to JPY7.94 trillion - about USD72.79 billion - from JPY4.60 trillion. Pretax profit multiplied to JPY1.26 trillion from JPY118.23 billion, while diluted earnings per share jumped to JPY321.11 from JPY56.87. The results beat the pre-pandemic level of first quarter of financial 2020, when Toyota made JPY7.72 trillion revenue, JPY850.99 billion pretax profit and diluted earnings per share of JPY216.19.
----------
The US drug regulator is set to fully approve the Pfizer-BioNTech Covid-19 vaccine by early next month, the New York Times reported. The Food & Drug Administration has set an "unofficial deadline" of the September 6 Labor Day holiday "or sooner" to give the anti-Covid shot the final green light, the newspaper reported, citing sources familiar with the plan. The vaccine is currently being administered via an emergency use authorization that was granted in December. The FDA had said in a statement last week that granting the Pfizer vaccine final approval was one of the agency's highest priorities and anticipated being finished with the final review soon.
----------
Thales it has entered an agreement to sell its Ground Transportation Systems business to Hitachi's Rail unit for enterprise value of EUR1.66 billion. Around 8 billion passengers benefit from GTS's rail technologies every year, Thales noted, and saw its best financial performance in 7 years in the first half of 2021. The unit recorded EUR1.6 billion in revenue in 2020. "Thanks to the strong technical, geographical and commercial complementarities between Hitachi Rail and Ground Transportation Systems, the combination will create a leading rail signalling provider with a broader product offering and stronger capabilities to meet customer demand around the world," Thales said.
----------
Amgen on Tuesday said its second-quarter revenue rose, but its recovery from the Covid-19 pandemic is expected to remain gradual for the rest of the year. For the second quarter to June 30, the company said revenue was up 5% at USD6.53 billion from USD6.21 billion at the same time last year. However, net income was down 74% to USD464 million from USD1.80 billion, with earnings per share of USD0.81, down from USD3.05. The Thousand Oaks, California-based firm said the results were driven by the write-off of USD1.5 billion in acquired in-process research & development, associated with its acquisition of Five Prime Therapeutics. Amgen declared a second quarter dividend per share of USD1.76, up 10% from USD1.60 a year before.
----------
MARKETS
----------
Share prices were higher in Europe despite a mixed lead from Asia, amid strong service sector survey results for the UK and eurozone. "With positive corporate results better than expected in an environment still supported by central banks, the trading stance remains bullish on most benchmarks," commented Pierre Veyret, a technical analyst at ActivTrades. "However, traders will cautiously assess today's US ADP nonfarm employment figures and the speech by Richard Clarida, vice chair of the Federal Reserve, ahead of Friday's [US nonfarm payrolls], to seek more clarity about the Fed’s next policy move."
----------
CAC 40: up 0.5% at 6,755.28
DAX 30: up 0.7% at 15,657.16
FTSE 100: up 0.4% at 7,133.27
----------
Hang Seng: closed up 0.9% at 26,426.55
Nikkei 225: closed down 0.2% at 27,584.08
S&P/ASX 200: closed up 0.4% at 7,503.20
----------
DJIA: called down 0.1%
S&P 500: called down 0.1%
Nasdaq Composite: called marginally higher, up 5.75 points
----------
EUR: down at USD1.1854 (USD1.1860)
GBP: up at USD1.3931 (USD1.3895)
USD: up at JPY109.20 (JPY109.02)
Gold: up at USD1,812.01 per ounce (USD1,809.00)
Oil (Brent): up at USD72.44 a barrel (USD71.83)
(currency and commodities changes since previous London equities close)
----------
ECONOMICS AND GENERAL
----------
Private sector growth in the eurozone surged to its highest point since 2006, data from IHS Markit showed, with solid expansion of both manufacturing and services activity. The eurozone purchasing managers' index composite output index rose to 60.2 points, slightly below the preliminary flash estimate of 60.6, but still surpassing June's 15-year record of 59.5. Any reading above 50 points indicates expansion. July's reading marked the fifth successive month in which private sector output has expanded, the longest uninterrupted sequence since the pandemic began early last year, IHS Markit said.
----------
The UK's services sector held up better than expected in July, even if momentum did slow from June due to staffing shortages and Covid-19 isolation rules, figures from IHS Markit showed. The IHS Markit/CIPS UK services PMI registered 59.6 points in July, down from 62.4 in June. However, the score came in ahead of the flash reading of 57.8, largely due to the final index covering an extra five working days since 'freedom day' from remaining virus restrictions in England. However, July's reading was still the lowest since March's 56.8, as staff shortages and supply issues served as a "severe" constraint on business capacity.
----------
The Chinese service sector rebounded in July, as containment of Covid-19 domestically and firmer market conditions helped to boost customer numbers and demand, survey results from IHS Markit showed. The Caixin headline seasonally adjusted services purchasing managers' index came in at 54.9 points in July, rebounding from June's 14-month low of 50.3.
----------
China on Wednesday reported its highest daily number of local coronavirus cases in months as mass testing and contact tracing campaigns uncovered a trail of Delta variant infections. Health authorities reported 71 domestic cases on Wednesday, the highest since January, as China battles its largest outbreak in months by testing entire cities and locking down millions. The official results of those tests have revealed a low caseload despite the outbreak spreading to dozens of major cities. Beijing had previously boasted of its success in crushing Covid-19, allowing the economy to rebound and normal life to return while swathes of the globe struggled to douse a pandemic that has killed more than four million people worldwide. But the latest outbreak is threatening that record with nearly 500 domestic cases reported since mid-July, when a cluster among airport cleaners in Nanjing, Jiangsu province, was found. Wuhan, where the virus first emerged in 2019, reported its first local infections in over a year this week and said it was "swiftly launching" testing of all 11 million residents
----------
Business activity in Japan contracted at a quicker rate in July, according to IHS Markit. The seasonally adjusted Japan services PMI dipped in July to 47.4 from 48.0 in June, both indicating contraction.
----------
The service sector in Australia took a nosedive in July, data from IHS Markit said. The seasonally adjusted Australia services business activity index declined to 44.2 points in July from 56.8 in June, dropping below the 50.0 no-change mark for the first time in 10 months. IHS Markit noted the steep fall in July is the sharpest since May 2020, with many Australian states returning to lockdown in July weighing on business.
----------
By Tom Waite; thomaslwaite@alliancenews.com
Copyright 2021 Alliance News Limited. All Rights Reserved.
