(Alliance News) - AstraZeneca on Friday said its expects "a solid finish to the year, amid double-digit revenue growth, partly thanks to its vaccine against Covid-19.
The drug maker said it now expects to "progressively transition the vaccine to modest profitability as new orders are received". However, it said the profit contribution of this to the final quarter of 2021 will be offset by costs related to antibody combination AZD7442, so it left core earnings guidance unchanged for the full year.
AZD7442 is a drug cocktail shown to reduce severe Covid-19 or death in non-hospitalised patients with mild-to-moderate symptoms.
Astra reported total revenue in the year to date - including Alexion Pharmaceuticals - was USD25.41 billion, up 32% year-on-year. On a constant currency basis, revenue grew by 28% in the nine months to September 30. Total revenue in the third quarter alone increased by 50% to USD9.87 billion.
Astra noted that the Alexion integration is progressing well, creating new opportunities in rare diseases. Astra bought Alexion, a Boston, Massachusetts-based biotech firm, in July for USD13.3 billion in cash and 236.3 million new AstraZeneca shares. Revenue includes Alexion from July 21 onward.
Excluding Astra's Covid-19 vaccine, total revenue increase 21% or 17% at constant exchange rates, in the year to date, to USD23.19 billion, and by 34% in the third quarter to USD8.82 billion.
"Our broad portfolio of medicines and diversified geographic exposure provides a robust platform for long-term sustainable growth. Following accelerated investment in upcoming launches after positive data flow, we expect a solid finish to the year and our earnings guidance is unchanged," said Chief Executive Pascal Soriot.
For all of 2021, Astra said it expects total revenue excluding the Covid-19 vaccine to grow by a low-twenties percentage. Including vaccine revenue in the final quarter of 2021, revenue is expected to grow by a mid-to-high-twenties percentage.
Annual guidance for core earnings per share was kept at USD5.05 to USD5.40. Core EPS was USD1.08 in the third quarter and USD3.59 in the first nine months.
Astra shares were down 3.6% early Friday.
Here is what you need to know at the London market open:
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MARKETS
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FTSE 100: down 0.2% at 7,367.96
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Hang Seng: up 0.3% at 25,327.97
Nikkei 225: closed up 1.1% at 29,609.97
DJIA: closed down 158.71 points, 0.4%, at 35,921.23
S&P 500: closed up 0.1% at 4,649.27
Nasdaq Composite: closed up 0.5% at 15,704.28
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EUR: down at USD1.1452 (USD1.1462)
GBP: firm at USD1.3387 (USD1.3381)
USD: flat at JPY114.04 (JPY114.02)
Gold: down at USD1,856.55 per ounce (USD1,861.20)
Oil (Brent): soft at USD82.26 a barrel (USD82.48)
(changes since previous London equities close)
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ECONOMICS AND GENERAL
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Friday's Key Economic Events still to come
Germany balance of payments
1100 CET EU industrial production
1000 EST US job openings & labour turnover survey
1000 EST US University of Michigan survey of consumers
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UN climate talks headed towards a rocky conclusion Friday after two weeks of fraught debate failed to resolve several key disputes or produce the emissions cutting plans needed to limit global warming to 1.5C. "The world is watching us," COP26 President Alok Sharma told delegates charged with keeping the Paris Agreement temperature goals alive even as climate-driven disasters hit countries the world over. The summit began with a bang as world leaders descended on Glasgow armed with a string of headline announcements, from a commitment to slash methane emissions to a plan to save the rainforests. But progress has stalled in the underlying technical and now minister-level negotiations. With one day left of scheduled talks, countries are hardly any closer to agreement over whether national emissions cutting plans must be ramped up in the short term, how climate action is reported, and how vulnerable nations are supported.
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BROKER RATING CHANGES
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JEFFERIES CUTS AVEVA TO 'HOLD' ('BUY') - TARGET 3700 (4600) PENCE
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GOLDMAN SACHS RAISES VIRGIN MONEY TO 'NEUTRAL' ('SELL') - TARGET 195 PENCE
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BERENBERG INITIATES QUILTER WITH 'HOLD' - TARGET 162 PENCE
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COMPANIES - FTSE 100
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Land Securities reported the sale of 6-9 Harbour Exchange in the Canary Wharf area of east London to Blackstone European Property Income Fund for GBP196.5 million. The sale price reflects a net initial yield of 3.99%. LandSec said this transaction underlines strong investor demand for high quality income in central London. The disposal is in line with Landsec's strategy set out in October last year, it said. This identified a future growth strategy focused on three key areas: Central London offices; major retail destinations; and urban mixed-use neighbourhoods in London and other major regional cities.
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COMPANIES - FTSE 250
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John Wood Group said has initiated a strategic review of the part of its Consulting business facing the built-environment end-market. The scope of the review will consider a range of options to unlock value from this part of the business for shareholders, the company said. Turning to trading, John Wood said it expects to deliver improved revenue and earnings in the second half of 2021 relative to the first half. The engineering and consulting company said it is seeing robust activity in Consulting and Operations, but the rate of recovery in Projects has been slower than anticipated largely due to the deferral of activity and awards into 2022. More positively, the Aberdeen, Scotland-based firm said it has maintained strength in the order book which is up 18% at the end of September compared to December 2020. As a result, John Wood said it expects 2021 revenue to be USD6.4 billion. In 2020, the company recorded revenue of USD7.56 billion.
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Housebuilder Redrow said trading has remained strong since its financial year end on June 27. The value of net private reservations in the 19 weeks to November 5 was 2.1% above the prior year at GBP672 million versus GBP658 million. The private revenue per outlet per week was GBP309,000 compared to GBP298,000 last year. Average selling price of private reservations rose 14% on the equivalent period last year to GBP453,000 from GBP398,000. During the period Redrow said it added 1,400 plots to its current land holdings and 95 plots to its forward land holdings compared to 457 plots and 119 plots, respectively, last year. Homes turnover was 3.5% below the prior year's GBP690 million, at GBP666 million, but the total forward order book is a record GBP1.51 billion, up 2.0% from GBP1.48 billion a year ago. The company warned on material shortages and supply interruptions facing the industry, but said it is working with long-term supply partners to ensure build output remains at normal levels. Redrow said it estimates that overall build cost inflation will be 5% for the current financial year. Looking ahead, Redrow said it now expects its revenue for 2022 to be GBP2.1 billion, and its operating margin to be 19%. A year ago, it posted revenue of GBP1.94 billion.
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COMPANIES - MAIN MARKET AND AIM
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Galliford Try said it is performing well, as it continues to manage inflation and supply challenges, and maintain a strong cash position with margins in line with expectations. The infrastructure construction company said it is "encouraged" by the continuing pipeline of new opportunities that align to its strategy and chosen sectors, and the government's planned investment in infrastructure and economic recovery. Going forward, Galliford Try said it is confident of meeting its objectives for the current financial year.
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COMPANIES - GLOBAL
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Toshiba's board has approved a plan to split the storied Japanese conglomerate into three companies, it announced, following tension with shareholders and a controversial takeover offer. The move will spin off one company focusing on infrastructure and a second dedicated to devices from the rest of Toshiba's business, with the aim of all three being listed companies.
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Chinese games and messaging firm Tencent has acquired the Japanese creative studio behind several hit Nintendo Switch titles, as it seeks to recover from a government crackdown on the gaming sector. Tencent has taken about a 90% stake in Wake Up Interactive for more than JPY5 billion, about USD44 million, Bloomberg News reported, quoting unidentified people with knowledge of the deal. Wake Up owns Tokyo-based Soleil, which helped develop Nintendo Switch hits Ninjala and Travis Strikes Again: No More Heroes, Bloomberg said.
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Friday's Shareholder Meetings
DFS Furniture PLC - AGM
Falcon Oil & Gas Ltd - AGM
Galliford Try Holdings PLC - AGM
Intosol Holdings PLC - AGM
Petrofac Ltd - GM re capital raise
Redrow PLC - AGM
Urban Logistics REIT PLC - GM re move to Main Market
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By Tom Waite; thomaslwaite@alliancenews.com
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