Premarket London: ABF Sees Strong FY2020, Imperial - Not So Much

Nov 05, 2019

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- Here are the highlights of the regulatory releases from the London Stock Exchanges on Tuesday, 5th November. Please refresh for updates.

Associated British Foods (LON:ABF), the owner of Primark, said net profit fell 5% on the year to 1.28 billion pounds mainly due to a 79 million pound charge on the closure of some of its businesses.

That clouded a slightly better-than-expected results at the underlying level for its full fiscal year through September, thanks to a strong performance from the fashion chain and translation gains on foreign currency earnings.

Adjusted earnings per share rose 2% to 1.41 billion pounds ($1.82 billion), while net cash flow came in at 936 million pounds, compared to guidance of 900 million three months ago.

“Next year the group is well-positioned for further progress, with the continued expansion of Primark, a material improvement in our Sugar profit and strong profit growth in Grocery,” CEO George Weston said in a statement.

Tobacco giant Imperial Brands' (LON:IMB) profit for the full fiscal year fell short even of the reduced expectations it announced in September.

Adjusted per share earnings fell 1.6%, due in part to the cost of terminating supply contracts for next generation products (NGP) that have come under increasing regulatory scrutiny in the U.S.

Revenue grew 2.2% in the year through September, as previously guided.

The NGP problems also weighed on the outlook for the next 12 months: Imperial has lowered its outlook after cutting its investment in the area, and doesn’t expect to see much benefit from its investment until the second half of fiscal 2020. Overall, it expects “low single-digit revenue and earnings per share growth,” although it reassured that its traditional tobacco business will deliver “modest revenue growth, high margins and strong cash flows.”

Imperial also said Thérèse Esperdy, currently senior independent director, will succeed Mark Williamson as Chairman from Jan. 1.

National Grid PLC (LON:NG) said its head of U.S. operations Dean Seavers is to leave 'for personal reasons.' He'll stay on until Dec. 31 to help arrange an orderly transition, while the company searches for a replacement. It will consider both internal and external candidates.

Heavy equipment supplier Weir Group (LON:WEIR) cut its outlook for 2019 after taking a 20 million pound restructuring charge in an oil and gas division struggling with cutbacks in expenditures by drillers in the U.S. shale patch. Orders for its O&G division fell 32% on the year.
The company said it had started a 30 million-pound cost cutting program at the oil and gas division, where it expects profits to fall further in the fourth quarter.
Weir’s mining division performed more strongly, most notably with a 100 million pound order for an iron ore project in Australia.
Like-for-like orders were unchanged on the year in Q3, while orders from continuing operations were up 4%. The group said its guidance for the non-O&G operations was unchanged.

Trainline (LON:TRNT) raised its guidance for the 2020 fiscal year after reporting a 29% rise in revenue in the six months through September to 129 million pounds. It now expects revenue to grow just above 20% this year.
Operating losses were 8 million pounds, while the net loss was 89 million, due largely to the costs of its IPO earlier in the year.
Operating free cash flow was 60 million, while adjusted EBITDA doubled to 42 million.
App downloads rose 59% on the year, shifting the mix in revenue more towards mobile.

Wizz Air (LON:WIZZ) said passenger traffic rose 21.3% on the year in October while the load factor rose to 95.3% from 94.0% a year earlier. On a rolling 12-month basis, passenger numbers were up 16.3%.

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