UK Likely to Scale Back Stimulus Despite Improving Public Finances

0748 GMT - The U.K. government is likely to scale back fiscal stimulus in autumn, despite official data showing public finances have improved, says Capital Economics. "August's public finance figures provided more evidence that the government's financial position isn't as bad as the Office for Budget Responsibility (OBR) predicted back in March," says senior U.K. economist Ruth Gregory. The GBP20.5bn of public sector net borrowing (excluding banking groups) in August was once again lower than the OBR's forecast of GBP21.6bn, though it was higher than the a forecast in a WSJ pool of GBP14.0 billion. U.K.'s Treasury chief expected to signal the end of pandemic-era stimulus at his Budget on Oct. 27, when he presents the government's fiscal plans. (lorena.ruibal@wsj.com)

 
Companies News: 

Travis Perkins to Return GBP179 Mln to Shareholders via Buyback, Special Dividend

Travis Perkins PLC is launching a 100 million pound ($136.6 million) share buyback and a GBP79 million special dividend, after the sale of its Plumbing & Heating distribution business, it said Tuesday.

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Kingfisher's 1H Adjusted Pretax Profit Came in Ahead of Market Views

Kingfisher PLC on Tuesday reported a significant rise in pretax profit and adjusted pretax profit for the first half of fiscal 2022 and said that its outlook for the full year has improved.

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Stagecoach Is in Merger Talks With National Express Group

U.K. transportation group Stagecoach Group PLC said Tuesday that it is in talks for an all-share takeover by peer National Express Group PLC that will give its shareholders about 25% of the combined group if the deal proceeds.

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Compass Group Says 4Q Underlying Revenue to Be 86% of FY 2019's

Compass Group PLC said Tuesday that it expects fourth-quarter underlying revenue on a constant currency basis to improve to 86% of 2019 revenue, and for it to be slightly ahead of the previous guidance range of 80% to 85%.

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Blackstone's BioMed to Invest $1.2 Bln in New UK Labs

U.S. real-estate investment company BioMed Realty said Tuesday that it plans to significantly increase its laboratory space in the U.K. after acquiring two sites in the city of Cambridge.

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PensionBee Group 1H Pretax Loss Widened

PensionBee Group PLC on Tuesday reported a significantly widened pretax loss for the first half of 2021 and said that its performance for the period was in line with management expectations.

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Dignity Swung to 1H Profit on Financial Remeasurements

Dignity PLC on Tuesday reported a profit for the first half of the fiscal year, but its underlying earnings declined as deaths fell on year.

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Knights Group Says Strong Performance Continues into FY 2022

Knights Group Holdings PLC said Tuesday that its performance continues to be strong and in line with expectations following the end of fiscal year 2021 on April 30.

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Aegon to Appeal Hungarian Court Decision to Block Acquisition by Vienna Insurance Group

Aegon NV said Tuesday that it will appeal a decision made by the Budapest Metropolitan Court to block the acquisition of its Hungarian business by Vienna Insurance Group AG.

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Caerus Mineral Resources to Raise GBP1.5 Mln to Fund Project Development

Caerus Mineral Resources PLC said Tuesday that it is raising 1.5 million pounds ($2 million) via a share placing and subscription and will use the money to fund project development.

 
Market Talk: 

First Green Gilt Syndication Likely Today

0726 GMT - The U.K. is likely to issue its first ever green gilt via syndication today, subject to market and demand conditions. "This marks the first of two planned green gilt syndications in fiscal year 2021/22, in the form of a new 0.875% green gilt maturing on 31 July 2033 - giving it a maturity of 11.86yrs and modified duration of 11.24," says RBC Capital Markets. The bank expects the U.K. to raise between GBP10-GBP15bn today, given Treasury chief Rishi Sunak said that this will be the largest green sovereign launch on record, analysts at the bank say. Italy issued the largest green sovereign bond deal so far after issuing an EUR8.5bn BTP maturing in 2045. (lorena.ruibal@wsj.com)

Permian Assets Sale Could Lead Shell to Boost 2022 Buybacks

0703 GMT - Shell has committed $7 billion of the proceeds from the sale of its Permian basin assets to additional shareholder distributions and, given the current share price, RBC Capital Markets expects the bias to be for share buybacks. As a result, the bank's 2022 buyback estimate of $6 billion could easily double, it says. The company hasn't commented on whether the distributions would be via special dividend or additional buyback. Still, RBC expects the announcement to be taken positively by the market, and to support the shares in the near term. RBC has an outperform rating on the Anglo-Dutch energy giant. (jaime.llinares@wsj.com)

Compass Group Could Come out Swinging After Pandemic

0703 GMT - Contract caterer Compass Group could have suffered as clients shut their offices and took their canteens with them, but it now looks set to come out of the pandemic swinging, Daniel Lane at Freetrade says. Compass's reduced spending has allowed it to avoid growing a large pile of debt, but as companies will operate a hybrid workforce for a while still--meaning they only need half the service they used to pay for--the question as to how it will get back to its target 7% margins remains, Lane says. "It'll need a steady hand to maintain that balance of efficiency and new business to bring in firms starting to realize they need to be just as lean as their contractors," Lane says. (anthony.orunagoriainoff@dowjones.com)

Shell's Permian Sale to Please Investors

0656 GMT - The market will take Shell's sale of its Permian basin assets positively, given the relatively attractive price tag and the higher-than-expected allocation of proceeds to incremental shareholder returns, which should support shares in the near-term, RBC Capital Markets says. The company is divesting 5% of its 2021 production estimate, or 4% of its asset base, for 6% of its market capitalization, RBC estimates. "It has been our long held view that Shell had a sub-scale position in the Permian relative to its U.S. peers, and given its poor track record in the asset class, it would make sense to divest to another operator," the Canadian bank says. (jaime.llinares@wsj.com)

 

Contact: London NewsPlus; paul.larkins@wsj.com

(END) Dow Jones Newswires

September 21, 2021 04:12 ET (08:12 GMT)

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