(Alliance News) - Car dealership Lookers said Friday its first half was "challenging", and Chief Executive Officer Andy Bruce and Chief Operating Officer Nigel McMinn will be leaving the company immediately.
Lookers expects to report 2019 underlying pretax profit of GBP20 million. The company reported an adjusted pretax profit of GBP67.3 million in 2018.
It said the UK new vehicle market was weak in the third quarter, including the normally highly profitable plate-change month of September. Like-for-like unit sales of new cars were down 3.2% in the quarter, accelerating the 1.2% decline seen in the first half of 2019.
"This was driven by ongoing weakness in consumer confidence in the light of political and economic uncertainty, pressure on used car margins and retail cost inflation. The board expected these conditions to continue to impact the group during the second half, but trading, particularly over recent weeks since mid-September, has been much more challenging than expected," the company said.
Loookers said Chair Phil White will become executive chair until permanent successors are found, while Non-Executive Director Richard Walker will take on a part-time executive role.
Here is what you need to know at the London market open:
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MARKETS
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FTSE 100: up 0.3% at 7,268.35
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Hang Seng: up 0.6% at 27,061.43
Nikkei 225: closed down 0.3% at 22,850.77
DJIA: closed down 140.46 points, 0.5%, at 27,046.23
S&P 500: closed down 0.3% at 3,037.56
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GBP: up at USD1.2960 (USD1.2927)
EUR: firm at USD1.1162 (USD1.1151)
Gold: firm at USD1,511.80 per ounce (USD1,510.25)
Oil (Brent): soft at USD59.42 a barrel (USD60.22)
(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
0930 GMT UK CIPS-Markit manufacturing purchasing managers index
0830 EDT US jobs report for September
0945 EDT US manufacturing PMI
1000 EDT US ISM manufacturing report on business
1000 EDT US construction spending - construction put in place
1600 EDT US domestic auto industry sales
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October's Chinese manufacturing data showed the strongest improvement in conditions since 2017, the latest figures from Caixin revealed. The Caixin China General Manufacturing purchasing managers' index rose to 51.7 in October from 51.4 in September. The index has now signalled an improvement in operating conditions for three months running, Caixin noted, with the latest improvement the strongest seen since February 2017. Total new work received by Chinese firms rose "solidly" in October, with the rate of expansion the quickest recorded for 81 months. Notably, new export business increased for the first time in five months, albeit marginally.
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Japan's manufacturing economy sank deeper into contraction territory during October, according to the latest Jibun Bank Japan Manufacturing purchasing managers' index. The PMI fell to 48.4 in October, from 48.9 in September, representing the lowest reading in nearly three-and-a-half years. Any reading above 50 indicates expansion, while one below signals contraction. The sharper deterioration in business conditions was driven by a steeper drop in demand, with survey data pointing to a "marked decline" in new orders.
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Ireland's business conditions improved in October for the first time since May, the latest AIB Ireland Manufacturing purchasing managers' index showed. The seasonally-adjusted PMI returned to growth in October with a reading of 50.7, up from 48.7 in September. This signalled the first improvement in Irish manufacturing conditions since May.
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North Korea said its most recent weapons test was a successful test fire of "super-large" rocket launchers, in comments by state media KCNA. "The perfection of the continuous fire system was verified through the test-fire to totally destroy with super-power the group target of the enemy," the statement added. Neighbouring South Korea had earlier announced that two short-range projectiles were fired by Pyongyang into the sea off its coast, without offering a description of the type of projectile.
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The US Department of the Interior has grounded its fleet of Chinese-made drones as it conducts a review of the program. Nick Goodwin, an Interior Department spokesman, did not provide a reason for the decision but it comes amid US security concerns over Chinese electronics.
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The US extended its sanctions on Iran by taking aim at its construction sector, which Washington linked to the country's Revolutionary Guards. The sanctions, it said, would also target "four strategic materials as being used in connection with Iran's nuclear, military, or ballistic missile programs." Secretary of State Mike Pompeo imposed the sanctions after the construction sector was identified as "being controlled directly or indirectly by the Islamic Revolutionary Guard Corps," spokeswoman Morgan Ortagus said in a statement.
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Donald Trump is urging Boris Johnson and Nigel Farage to team up and become an "unstoppable force" as he warned that Jeremy Corbyn would take the UK to "bad places". The US president called for the UK prime minister and Brexit Party leader to "get together" in what appeared to be a call for them to form a pact ahead of Farage launching his party's General Election campaign on Friday morning. Trump hailed Johnson as "the exact right guy for the times" but also criticised his Brexit deal, claiming it hinders trade with the US.
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BROKER RATING CHANGES
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PEEL HUNT RAISES HOMESERVE TO 'ADD' ('HOLD')
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BERNSTEIN RAISES RYANAIR PRICE TARGET TO 11.80 (10.00) EUR - 'MARKET-PERFORM'
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GOLDMAN RAISES DAILY MAIL PRICE TARGET TO 709 (590) PENCE - 'SELL'
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COMPANIES - FTSE 100
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Evraz said its total crude steel production slipped 3.4% in the third quarter compared to the previous quarter to 3.4 million tonnes, with the miner's Russia operations seeing a 1.8% decline in production. Evraz blamed scheduled downtimes and weaker demand. Total third-quarter sales were flat compared to the previous quarter at 3.3 million tonnes. In the nine month period, however, crude steel production was 4.5% higher year on year at 10.4 million tonnes, with sales 6.1% higher at 9.9 million tonnes.
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Miner BHP Group said it has approved USD44 million for work relating to the restart of a concentrator at Samarco Mineracao SA's Germano compex. Samarco's operations were suspended following the failure of the Fundao dam in 2015. BHP has approved the funding for BHP Billiton Brasil Ltda's share of the work needing to be done. The funds will enable the construction of a filtration plant over the next 12 months and the "commencement of operation readiness activities" for restart.
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Rentokil said it has acquired Florida Pest Control, which serves both commercial and residential customers. Based in Gainesville, Florida Pest Control was established in 1949 and today employs 600 people in 20 branches throughout central and northern Florida. Rentokil said the company generated revenue of USD66 million in 2018. It didn't provide financial details of the acquisition, but said Florida Pest Control will contribute towards it North American revenue and margin targets.
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Tesco is to remove one billion pieces of plastic from products by the end of 2020 as it seeks to reduce its environmental impact, the UK's biggest retailer has announced. The supermarket will end its use of small plastic bags, commonly used to pack loose fruit, vegetables and bakery items, and replace them with paper ones. It will also remove plastic trays from ready meals, secondary lids on products such as cream and yoghurt, sporks and straws from snack pots and drinks cartons, and 200 million wrappers used to pack clothing and greetings cards.
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COMPANIES - FTSE 250
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Interdealer broker TP ICAP said its third-quarter revenue was 17% higher year on year at GBP478 million, with the firm's Global Broking unit recording 10% revenue growth to GBP334 million and its Energy & Commodities business seeing 24% growth to GBP98 million. "Today's strong trading update demonstrates that TP ICAP's trading portfolio is well placed to capitalise on volatile macro market conditions," Chief Executive Nicolas Breteau commented. TP ICAP left its 2019 guidance of "low single-digit revenue growth" unchanged despite the strong quarter.
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COMPANIES - OTHER MAIN MARKET AND AIM
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Irish lender AIB Group has sold a non-performing loan portfolio to Everyday Finance DAC, a consortium with affiliates of Cerberus Capital Management, for EUR700 million in cash. "The proceeds will be used for general corporate purposes including the continuation of support for customer restructuring. The sale is expected to have a negative P&L impact but overall will be capital accretive due to the reduction in RWAs, the timing of which will occur upon receipt of proceeds in early 2020," AIB explained. The portfolio has a gross value of EUR850 million and incurred a loss of EUR52 million in 2018. AIB said the sale means the bank remains on track to meet its 5% non-performing loan deleveraging strategy by the end of 2019.
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COMPANIES - INTERNATIONAL
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Macquarie Group lifted its interim dividend as it reported a rise in profit and operating income for the six-month period. For the six months to the end of September, the Sydney-based Australian bank reported a pretax operating profit of AUD1.84 billion, around USD1.02 billion, up 7.6% from AUD1.71 billion a year before. Net operating income meanwhile grew by 8% to AUD6.32 billion from AUD5.83 billion the prior year, lifted by an 8% increase in Fee & Commission income to AUD2.87 billion, as well as another 8% rise from net interest and trading income to AUD2.42 billion. Macquarie declared an interim dividend of AUD2.50 per share, up 16% from AUD2.15 the year before.
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Danish pharmaceutical firm Novo Nordisk reported a rise in profit and sales for the first nine months of 2019, on strong growth from all of its segments. For the nine months to the end of September, Novo Nordisk's pretax profit rose by 1% to DKK37.47 billion, around USD5.60 billion, from DKK37.24 billion in the same period a year before. This was on net sales that grew by 9% on a reported basis to DKK89.60 billion from DKK82.10 billion. At constant currency rates, net sales grew by 5%.
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Boeing announced that dozens of its popular 737NG planes had been taken out of service after cracks in them were detected, marking another setback for the crisis-stricken US aircraft maker. The new difficulties compound the troubles facing the US manufacturer, which has faced tumbling profits, federal scrutiny and calls for its CEO to resign after deadly crashes involving the 737 MAX, the successor aircraft for the 737NG. Australian national carrier Qantas said it had found cracks in three of its 737NGs and removed them from service for repairs, after inspecting 33 jets which had flown more than 22,600 times - the threshold set by US regulators for such inspections.
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Friday's Shareholder Meetings
no events scheduled
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By Tom Waite; thomaslwaite@alliancenews.com
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