Anglo American sees earnings rise, Serco lifts full-year forecasts
London open
The FTSE 100 is expected to open nine points lower on Thursday, having closed up 0.69% at 7,228.62 on Wednesday.
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Anglo American on Thursday reported a 4% rise in underlying EBITDA to $9.2bn driven by strong prices, particularly platinum group metals, thermal and metallurgical coal and nickel, as well as productivity improvements and cost control. The company said hit took a $600m hit from the suspension of operations at it giant Minas Rio iron ore mine in Brazil. Production is due to resume by the end of the year.
Defence contractor BAE Systems said full year operating profit rose 14.3% per cent to £1.6bn as it warned that Germany's move to halt arms exports to Saudi Arabia could hit its ability to supply the controversial country in the aftermath of the murder of Saudi journalist Jamal Khashoggi. BAE said it was working closely with the UK government to "minimise the risk of any such occurrence and the impact it would have on financial performance, the supply chain and relationships".
Outsourcing firm Serco upped its 2019 profit and revenue forecasts on Thursday following a recent series of contract wins despite the "fog of uncertainty" surrounding Brexit". Serco now expects profits of around £105m, ahead of its previous £95-100m estimates, while revenues were projected to rise 3-4% and hit somewhere between £2.9bn and 3bn.
Newspaper round-up
Derek Sach, the former boss of RBS's Global Restructuring Group, was among more than 50 executives whose “incentive and bonus” payments were linked to “performance targets” established by the Asset Protection Agency, an arm of the Treasury that insured RBS’s toxic loans. Documents seen by The Times reveal that Mr Sach, 70, had 70 per cent of his 2010 annual bonus evaluated against such targets. The emergence of the scale of the agency’s involvement in GRG will increase calls for a public inquiry into the government’s influence over the actions of the restructuring unit. - The Times
Cat Rock Capital, a US investment firm which owns around 2 percent of Just Eat, has published the transcript of a call it held with analysts discussing Just Eat's fortunes. Cat Rock's founder and managing partner Alex Captain said the 'management situation at Just Eat [was] worse than we had previously expected'. He slammed the food delivery company for failing to contact candidates his firm proposed as chief executive. - The Daily Mail
An American airline run by two former Virgin Express executives has emerged as the latest would-be saviour of Flybe, the lossmaking British regional carrier. However, the bid by Mesa Air, a company trading as American Eagle and United Express, which has teamed up with Andrew Tinkler, the former Stobart Group executive, has been rebuffed immediately by Flybe, which says it still wants to sell up for a penny a share to a consortium including Virgin Atlantic and Stobart. - The Times
Austerity policies from the Treasury have resulted in slower growth in every year since 2010 and left each household £300 a month worse off as a result, a think tank has said. The New Economics Foundation said its analysis of the impact of tax and spending changes since the Conservatives came to power, first as part of a coalition with the Liberal Democrats, had left the economy £100bn smaller than it would otherwise have been. - The Guardian
US close
Wall Street finished in the green on Wednesday, as investors mulled over the latest developments in Sino-US trade relations and digested the latest Federal Reserve minutes.
The Dow Jones Industrial Average ended the session up 0.24% at 25,954.44, the S&P 500 added 0.18% to 2,784.70, and the Nasdaq Composite was ahead 0.03% at 7,489.07.
Minutes from the Fed’s latest meeting three weeks ago were released during the afternoon, which revealed that officials were keen to end the reduction of bonds on the Fed’s balance sheet before the end of the year.
“Almost all participants thought that it would be desirable to announce before too long a plan to stop reducing the Federal Reserve's asset holdings later this year,” the minutes read.
“Such an announcement would provide more certainty about the process for completing the normalization of the size of the Federal Reserve's balance sheet.”