Maitland/AMO Morning Monitor – Friday 14 February 2020

14th February 2020

What really matters... COVID-19

The FTSE, CAC and DAX are all expected to open down this morning.

Asian shares were mixed today, as hopes that governments will make provisions to soften the impact from the coronavirus epidemic were counterbalanced by continued fears about the outbreak.

Stock market moves

In other news

  • Sajid Javid resigns as Chancellor amid Cabinet reshuffle, to be replaced by Rishi Sunak
  • RBS planning to rename as NatWest Group
  • Shares in Nissan fall to thier lowest in a decade

Politics today

  • The Cabinet will meet for the first time following Thursday's reshuffle

Corporate announcements

* Maitland Client

Royal Bank of Scotland Group PLC Annual Results
  • RBS reported an operating profit before tax of £4,232m and an attributable profit of £3,133m and proposes a final ordinary dividend of 3 pence and a 5 pence special dividend.
  • In a challenging market RBS exceeded all of its 2019 financial targets: cost reduction above target; net lending growth ahead of target; RWAs below guidance; and 22 pence of total distributions to shareholders in 2019, while maintaining a CET1 ratio of 16.2%.
  • In the current environment, and recognising ongoing market uncertainty, the group continues to expect challenges on income. In addition, it anticipates that regulatory changes will adversely impact income in its personal business by around £200m.
  • The groups plans ongoing operating cost take out by reducing operating expenses excluding strategic costs, litigation and conduct costs and operating lease depreciation costs by £250m in 2020 compared with 2019.
AstraZeneca PLC Full-year Results
  • AstraZeneca delivered a year of strong revenue growth, supported by the launch of new medicines and further good progress on its pipeline, with several approvals and data readouts. These trends are set to continue in 2020, accompanied by growth in earnings and cash.
  • Sales of new medicines increased by 59% (62% at CER) to $9,906m, including new-medicine growth in Emerging Markets of 75% (84% at CER) to $1,865m. New medicines represented 42% of total Product Sales (FY 2018: 30%)
  • In maintaining its focus on patients and science, the Company remains on track to deliver its strategic ambitions.
  • Pascal Soriot, CEO, said: “Driven by a strong team, 2020 is anticipated to be another year of progress for AstraZeneca. We are becoming a better-balanced business, both regionally and through our medicines. This transition is a further step towards improving operating leverage and cash generation. As we accelerate our commitments to achieving our long-term climate-change and decarbonisation targets, we will maintain our focus on executing a strategy centred on science and patients.”
  • Adjusted pre-tax profit, up 10.8 per cent, reflecting a record year of development completions, high customer retention rates, like-for-like rental growth and a low vacancy rate.
  • Adjusted EPS of 24.4 pence, an increase of 4.3 per cent compared to 2018 (23.4 pence) or 9.9 per cent excluding the impact of the SELP performance fee received in 2018 (payable every five years). IFRS EPS of 79.3 pence (2018: 105.4 pence) reflects the 7.5 per cent increase in the value of our portfolio (2018: 10.7 per cent increase).
  • EPRA NAV per share up 8.9 per cent to 708 pence (31 December 2018: 650 pence). IFRS NAV per share was 697 pence (31 December 2018: 644 pence).
  • David Sleath, CEO, said: “”We have started 2020 in a strong position. Our substantial, mostly pre-leased development pipeline, along with the ongoing results from the active asset management of our existing portfolio, should enable us to drive further sustainable, compound growth in rental income, earnings and dividends over the coming years. This year SEGRO celebrates its one hundred year anniversary. We will continue to take a long-term view, reflecting the interests of our financial stakeholders and our wider responsibilities, as we look to position the business for further success in its next century.”