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Primark profits recovering | Persimmon sales strong

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9am: Primark boosts ABF shares

Associated British Foods was the best performer in the first hour of trading on the LSE, up 6%, after its Primark retail business said it is looking to pay a special dividend on the back of a good annual performance (see below).

ABF declared a 20.5 pence final dividend, alongside a 13.8p special dividend, bringing total dividends for the year to 40.5p.

Rolls-Royce rose 3.1% after the jet engine maker said it had secured funding from a consortium of private investors and the UK government to develop small nuclear reactors to generate cleaner energy.

BT Group was up 2.3% after Berenberg upgraded the telecoms firm to Buy from Hold.

After an initial dip the FTSE 100 was trading 8.41 points higher at 7,308.81.


7am: Primark in profit

Primark

Fast fashion chain Primark delivered a good performance in the face of continued disruption to trading caused by the pandemic, according to parent group Associated British Foods.

ABF declared a 20.5 pence final dividend, alongside a 13.8p special dividend, bringing total dividends for the year to 40.5p.

“Although the possibility of further trading restrictions cannot be ruled out, we expect Primark to deliver a much improved margin and profit next year,” said chairman Michael McLintock.

“We are now intent on expanding our new store pipeline and investing in technology and digital capabilities to continue improving the performance of the business.”

The board said surplus capital may be returned to shareholders by a special dividend or share buy-backs.

Revenue for the group of £13.9bn was in line with last year at actual exchange rates and was 1% ahead at constant currency.

Primark sales were impacted by trading restrictions and store closures as a result of government measures taken to contain the spread of COVID-19. The periods of closure were longer this year compared to the last financial year and sales declined by 5% at constant currency as a result.

“With the recovery in Primark’s profitability, we expect the Group’s effective tax rate to fall next year to a level closer to pre-COVID rates.” said Mr McLintock.


7am: Persimmon says sales ‘strong’

Persimmon homes

House builder Persimmon said the fundamentals of the UK housing market remain strong with good levels of consumer demand and confidence, mortgage availability and low interest rates.

Both average private sales reservation rates and forward sales reserved beyond 2021 remain healthy.

“As expected, we are on track to grow our new home sale completions by c. 10% this year (2020: 13,575 new homes) and we are targeting a return to 2019 volume levels in 2022. We continue to manage the inflationary pressures in the industry well and anticipate that margins will remain resilient.”


7am: Rolls-Royce confirms nuclear plan

Rolls-Royce has confirmed that it has raised funds to develop a series of low cost, low carbon nuclear power generation plants.

A consortium has raised £195m which will be backed by a £210m grant from the government.

The initiative is seen as a significant attempt to meet the anticipated surge in demand for clean energy.

A ‘small modular reactor’ will be the same size as two football pitches and can power approximately one million homes.

Full story here


7am: Distillery plan

Outline plans for a new malt whisky distillery beside the Dornoch Firth have been lodged with Highland Council.

The Midfearn Distillery Company plans to build its distillery on the Midfearn Estate at Easter Fearn, three miles south-east of the village of Ardgay on a site close to where whisky was first produced more than 200 years ago.

Full story here


7am: AMTE grant

Scottish battery maker AMTE said Scottish Enterprise has awarded a small grant to the company as part of its ScotHeavy Project, aimed at achieving zero emissions from heavy duty vehicles such as buses, lorries and construction vehicles.

The company said: “As a Scottish…manufacturer of battery cells, AMTE naturally has close links across the Scottish Government and has been working closely with Scottish Enterprise for some time. The ScotHeavy project will involve AMTE designing a specific battery module for the Ultra Energy cell.”


Global markets

London was expected to open lower despite all three Wall Street indexes setting more record highs overnight. The Dow Jones Industrial Average rose 0.3%, while the S&P 500 and Nasdaq edged 0.1% higher.

However, a 4.9% decline in Tesla shares weighed on the S&P 500. The stock fell after chief executive Elon Musk’s Twitter poll on whether he should sell about 10% of his stock in the electric automaker. The poll garnered more than 3.5 million votes, with 57.9% voting “Yes”.

There was a warning from Morgan Stanley that the “risks of a market bubble are growing,” with valuations “stretched” with investors “putting stock in the Fed’s patience with interest rate hikes”.

In Asia, SoftBank Group’s shares surged about 10% after announcing a plan to buy back up to one trillion yen of its own shares.

Japan’s Nikkei 225 slipped 0.75% while South Korea’s Kospi was up by 0.04%.

China’s Shanghai Composite gained 0.16% and Hong Kong’s Hang Seng index rose 0.2%.



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