(Alliance News) - The following is a summary of top news stories Wednesday.
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COMPANIES
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Imperial Brands backed annual guidance and added it forecasts a "broadly flat" first-half revenue performance, with tobacco market struggles in Europe offset by progress elsewhere. The company owns the Rizla rolling papers brand, Gauloises cigarettes and the Blu e-cigarettes range. Imperial said net revenue for the six months ended March 31 is expected to be broadly flat annually on a constant currency basis, in line with expectations. "This reflects a weaker tobacco performance in Europe, which offsets growth in other regions. Europe's performance has been driven by the return to pre-Covid purchasing patterns as Northern Europeans resume international travel, as well as price phasing in some markets. However, price increases during the latter part of the first half will support a stronger revenue performance in the second half," the FTSE 100 listing explained. Interim adjusted operating profit is expected to grow by around 2% on a constant currency basis, benefiting primarily from reduced losses in the Next Generation Product range, which includes Blu. The tobacco performance, meanwhile, will be weighted to the second half.
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Airline passengers have been hit with further disruption as more than 100 UK flights scheduled for Wednesday were cancelled. British Airways axed at least 78 flights at Heathrow, while easyJet PLC cancelled at least 30 at Gatwick. The aviation industry is suffering from a surge in coronavirus-related staff sickness and a shortage of workers following job cuts made during the virus crisis. To reduce the impact on passengers, most cancellations are being made at least a day in advance and on routes with multiple daily flights, so passengers can be offered alternative departures. British Airways said many of its cancellations include flights cut as part of its decision last month to reduce its schedule until the end of May. Airports are also struggling from the combination of staff shortages and a spike in demand as many families head abroad for the school Easter holiday, which is the first since the UK's coronavirus restrictions for international travellers were dropped.
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ITV is interested in launching a bid for soon-to-be privatised UK broadcaster Channel 4, the Telegraph reported on Tuesday. The Telegraph reported ITV has told ministers it would be interested in making an offer for Channel 4, which has an estimated price tag of GBP1 billion. Channel 4 is to be privatised by 2024. ITV has turned to Credit Suisse and Robey Warshaw as advisers. No bid has been made yet. The Telegraph noted ITV could face competition from elsewhere. Sky, Discovery Inc and Paramount Global, which already owns Channel 5 in the UK, could all be interested. The potential bid from the FTSE 100 constituent comes amid a backdrop of scrutiny on UK government plans to privatise Channel 4. Channel 4 has said it is "disappointed" at the UK government's decision to proceed with plans to privatise the broadcaster without "formally recognising the significant public interest concerns which have been raised".
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Redrow and MJ Gleeson said they signed a UK government pledge which aims to ensure the safety of high-rise buildings. The announcements come a day after the April 5 deadline set by the UK government, and similar announcements made by other UK housebuilders Persimmon PLC and Crest Nicholson Holdings. The improvements that Redrow will enact will cost the company an additional provision of GBP164 million, which will be "treated as an exceptional item in the results for the 2022 financial year," Redrow announced. Another, previous provision for fire safety in high rise buildings comes at a cost of GBP36 million, it said. The additional provision is higher than what Persimmon and Crest Nicholson reported on Tuesday, citing additional costs of GBP75 million and a range of GBP80 million to GBP120 million respectively. Sheffield-based MJ Gleeson said it signed the pledge even though none of the buildings in development in which its legacy arm was involved with were over 11 metres tall, or 36 feet, for which the safety pledge rules apply.
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Twitter has announced that it has been working on an edit feature and will begin testing in the coming months. The social media giant said the feature had been in the works since last year. It comes following the news that Tesla and SpaceX founder Elon Musk has bought a 9.2% stake in the company and joined its board of directors. The billionaire tech entrepreneur tweeted a poll asking users if they wanted the feature to be added. It is currently not possible to edit tweets once they have been sent. The news of Musk's appointment to the board of Twitter was shared by its chief executive Parag Agrawal on Tuesday, who said Musk would make the company "stronger in the long-term".
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The Canadian government unveiled legislation Tuesday that would require global digital giants to pay for local news content, in step with a landmark law passed by Australia last year. The Online News Act, which is expected to be passed into law by Prime Minister Justin Trudeau's Liberal government with backing from a small leftist faction, comes after more than 450 news outlets closed in Canada since 2008 as digital platforms took over the space. It builds on Australia's New Media Bargaining Code, which was a world first, aimed at making Alphabet's Google and Meta Platforms-owned Facebook pay for news content on their platforms.
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US soft drink giant Coca-Cola plans to cut 410 jobs in Germany, the company's German subsidiary announced on Tuesday. The group plans to shut down its site in Hamm, in the state of North Rhine Westphalia, by the end of the year. Currently, 82 people work there and a good half of the jobs are to be cut. The other half, such as sales consultants, will remain in the region, but will be assigned to other locations. The majority of the planned job cuts involve vending machine fillers and service technicians, who currently work throughout Germany and are organizationally assigned to specific locations. Until now, Coca-Cola has also been in the vending machine business in Germany, filling beverage and snack vending machines, and also taking care of maintenance. However, the company no longer plans to do this business itself, but to hand it over to external service providers.
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MARKETS
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European stocks followed New York and Asia lower on Wednesday, awaiting another raft of Western sanctions on Russia and US Federal Reserve meeting minutes. "A likely escalation of sanctions and the possibility of a more aggressive Federal Reserve combined to pull the rug from markets," said Richard Hunter, head of markets at Interactive Investor.
In addition, survey data showed China's services sector contracted sharply in March as the country grapples with surging Covid cases, notching its highest daily infection tally since the start of the pandemic. "This adds to the concern that the world's second largest economy is currently flatlining amid the raft of issues which global economies are contending with, such as inflation," said ii's Hunter.
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CAC 40: down 1.3% at 6,558.34
DAX 40: down 1.4% at 14,219.51
FTSE 100: down 0.4% at 7,581.97
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Hang Seng: closed down 1.9% at 22,080.52
Nikkei 225: closed down 1.6% at 27,350.30
S&P/ASX 200: closed down 0.5% at 7,490.10
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DJIA: called down 0.5%
S&P 500: called down 0.6%
Nasdaq Composite: called down 0.9%
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EUR: down at USD1.0912 (USD1.0927)
GBP: down at USD1.3101 (USD1.3115)
USD: up at JPY123.83 (JPY123.38)
GOLD: up at USD1,929.39 per ounce (USD1,926.80)
OIL (Brent): up at USD108.44 a barrel (USD107.07)
(currency and commodities changes since previous London equities close)
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ECONOMICS AND GENERAL
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EU leaders said the bloc will soon have to sanction all of Russia's hydrocarbon exports as they blamed Moscow for "war crimes" discovered in Ukraine, especially in the town of Bucha. The declarations, made to the European Parliament in the French city of Strasbourg, came as the EU was poised to implement a fifth round of sanctions cutting off Russian coal imports, while NATO and G7 foreign ministers gathered in Brussels for further steps on coordinated action. The EU must also impose oil and gas sanctions on Russia "sooner or later", European Council chief Charles Michel told MEPs. The deaths of civilians in Bucha and other parts of Ukraine were "war crimes" and "yet more proof that Russian brutality against the people of Ukraine has no limits," he said. "We the EU, we will not turn our backs. We will look reality straight in the eye. There must be, and there will be, severe consequences for all those responsible," he said. European Commission President Ursula von der Leyen echoed that, saying: "We will hold accountable those who are responsible for war crimes. The perpetrators must pay after Bucha more than ever."
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The eurozone's construction economy expanded at its slowest pace since October in March, with the sector hurt by rising prices and uncertainty stemming from Russia's invasion of Ukraine. S&P Global's latest construction purchasing managers' index tally for the eurozone fell to 52.8 points in March from 56.3 in February. The figure edged closer to the 50.0 mark which separates expansion from decline, suggesting growth slowed in March. "Companies often commented that growth was partially held back by concerns of accelerating prices and uncertainty stemming from the outbreak of war in Ukraine. Sub-sector data showed a sustained, yet slower rise in activity across the three monitored sub-sectors, with house building leading growth," S&P Global said. "Eurozone construction companies signalled a broad slowdown in new order growth in March. The expansion was the weakest for seven months, as higher prices and the outbreak of war in Ukraine dampened client confidence."
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UK construction sector activity remained robust in March against a backdrop of rising inflationary pressures, S&P Global said. The S&P Global-CIPS UK construction purchasing managers' index was unchanged at 59.1 points in March, the same as in February. The latest reading signalled the joint-fastest rate of output growth since June 2021. In addition, total new orders expanded at a robust and accelerated pace in March, with the latest rise the strongest since August 2021, it said. S&P said the March data pointed to a continued rise in UK construction output, helped by the fastest increase in new work for seven months. However, escalating inflationary pressures and concerns about the economic impact of the war in Ukraine contributed to a sharp drop in business optimism. The degree of confidence about the growth outlook was the weakest since October 2020, it noted.
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China's services sector contracted in March, as rising Covid-19 cases took their toll, survey data revealed on Wednesday. The Caixin services purchasing managers' index fell to 42.0 points in March from 50.2 in February. March's figure moved below the 50.0 no-change mark, and it also suggested the sharpest activity decline since the virus first emerged back in February 2020. The composite figure, a weighted average of the services and manufacturing data, fell to 43.9 in March from 50.1 in February. "Cost pressures meanwhile intensified, with the overall rate of input price inflation accelerating to a five-month high, but prices charged inflation eased slightly," S&P Global said.
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China reported over 20,000 Covid-19 cases on Wednesday, the highest daily tally given since the start of the pandemic, with Shanghai the heart of the virus surge despite being in lockdown. The country's "zero-Covid" strategy has come under immense strain as cases spike. Until March, China had kept daily cases low with snap localised lockdowns, mass testing, and strict restrictions on international travel. But the caseload has hit thousands per day in recent weeks, with officials saying they have detected a mutation of the highly transmissible Omicron variant near Shanghai. China recorded 20,472 infections on Wednesday, the National Health Commission said in a statement, adding that there were "no new deaths."
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By Lucy Heming; lucyheming@alliancenews.com
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