Maitland Morning Monitor – Thursday 7 December 2017

7th December 2017

Market Information

European markets are expected to open slightly higher today despite Brexit and news from the US playing on investors' minds.

Asian stocks were mixed with Hong Kong's Hang Seng Index and Japan's Nikkei making up some losses after dropping yesterday.

In the news

  • Jean-Claude Juncker 'fears Theresa May's Government will collapse next week without Brexit deal' (Daily Telegraph)
  • Trump recognises Jerusalem as capital of Israel (Financial Times)
  • Hammerson's £3.4bn bid for Intu set to form property giant (Financial Times)

Top Financial Announcements

* Maitland Client

Legal & General Group PLC Trading Update
  • Total sales for 2017 to date of £6.2bn.
  • Annuity sales generated £4.5bn of annuity premium, consisting of: £3.3bn of UK institutional pension risk transfer business, $0.7bn of US institutional pension risk transfer business and £0.6bn of UK retail annuities.
  • The institutional pension risk transfer business in the US has doubled versus 2016 and L&G has now written over $1.6bn of US business since entering the market.
  • In the retail space, UK individual annuity premiums are up 93%, equivalent to a 14% market share.
  • Nigel Wilson, CEO, said: “L&G is on track for a record year for earnings and profits. Our core business divisions are generating formidable momentum. With yesterday’s announcement of the sale of our closed book, in run-off Mature Savings business for £650m, our business is now well-positioned and focused on the products and geographies where we see optimum growth and cultural alignment. Our market leading positions and strong balance sheet, coupled with our management capability is allowing us to benefit from global growth opportunities.”
Coca-Cola HBC AG Appointment of Chief Executive Officer
  • Coca-Cola HBC AG today announces the appointment of Zoran Bogdanovic as the Company’s new Chief Executive Officer with immediate effect.
  • He succeeds Dimitris Lois who passed away in October. Mr. Bogdanovic will also be nominated as an executive director on the Board of Directors of Coca-Cola HBC at the Company’s next General Meeting of Shareholders.
  • Anastassis David, Chairman, said: “Following a thorough process and benchmarking exercise, the Board is delighted to announce Zoran’s appointment as Chief Executive Officer. Zoran has a track record of delivering results in diverse markets across our territories. His ability to bring out the best in people and apply innovative thinking to new challenges make him the ideal choice to lead Coca-Cola HBC through its growth era.”
Ladbrokes Coral Group PLC / GVC Holdings PLC Statement Regarding Potential Acquisition
  • The board of Ladbrokes Coral and the board of GVC announce that they are in detailed discussions regarding the possible combination of the two businesses, following the receipt by Ladbrokes Coral of a non-binding proposal from GVC.
  • It is expected that the Possible Offer would be structured as a scheme of arrangement pursuant to which GVC would acquire the entire issued and to be issued ordinary share capital of Ladbrokes Coral.
  • Based on the respective Ladbrokes Coral and GVC share prices as at the close of business on 6 December 2017, the Possible Offer values Ladbrokes Coral at 160.9p per Ladbrokes Coral share, equating to a total equity value of c.£3.1bn, plus a CVR of up to 42.8p per Ladbrokes Coral share, equating to a total equity value of up to c.£3.9bn.
  • It has been agreed by the parties that Kenneth Alexander would be the CEO of the enlarged group should the transaction proceed to completion.
Ferrexpo PLC* Special Dividend
  • Ferrexpo announces a special dividend of 3.3 US cents per share, following the payment of an interim dividend for the first six months of 2017 of 3.3 US cents per share.
  • Ferrexpo’s dividend policy is to pay a base level of sustainable dividends of approximately US$40 million per annum (or 3.3 US cents per half year), and pay special dividends from excess cash flows if appropriate.
  • The company has continued to trade strongly since it announced its half-year results on 3 August, and its cash flows have further reduced net debt and funded capital expenditure.
  • Together with the strong demand outlook for pellets in 2018, this has given the Board confidence to declare this dividend.
Smith (DS) PLC Half Year Results
  • Revenue up 19% at £2,800m.
  • Profit before tax down 1% at £144m.
  • Interim dividend per share up 7% at 4.9p.
  • Miles Roberts, CEO, said: “We are delighted with our volume growth which has significantly accelerated to over 5%, fuelled by success with e-commerce and pan-European customers. Structural shifts, including changes in consumer preferences, the increased relevance of our packaging at point-of-sale, and the rise in e-commerce are all underpinning the growth of packaging.  The strong customer demand has driven performance and our operating margin is in line with our expectations, despite the substantial input cost pressures in the period, which we continue to recover as planned. Integration of our recently acquired North American business is going very well and we have been delighted by the reaction from both employees and customers. The proposed acquisition in Romania is on track to complete in January 2018. We continue to see exciting opportunities for growth, both in Europe and in North America, and, accordingly, the Board remains confident about the outlook for DS Smith.”
St. Modwen Properties PLC Trading Update
  • The proportion of committed industrial and logistics pipeline being speculatively developed now 59% (May 2017: 73%).
  • St. Modwen Homes is currently active on 16 sites across the UK and has experienced robust demand for new homes with sales volumes for the year expected to be in line with expectations, growing by approximately 43% over the previous year to 694.
  • Mark Allan, CEO, said: “We have continued to advance our new strategic objectives since announcing them in June 2017 and have made solid progress in terms of accelerating delivery and focusing activity towards the higher performing industrial and logistics sector and our St. Modwen Homes business, both of which are experiencing excellent growth. At the same time, St. Modwen’s diverse portfolio and broader business has continued to perform well, demonstrating resilience and growth, and signalling that the full year results will be in line with expectations.”