LONDON MARKET PRE-OPEN 20 July 2017

Unilever On Track As Bunzl Goes Shopping

LONDON (Alliance News) Stocks in London are called for a positive open on Thursday, with all eyes
on the European Central Bank monetary policy decision at 1245 BST.
In early UK company news, consumer goods giant Unilever said revenue grew to EUR27.73 billion in
the first half of 2017, compared to EUR26.28 a year before. The firm said pretax profit rose to
EUR4.63 billion compared to EUR3.64 billion a year earlier.
Unilever said it is on track for another year of underlying sales growth ahead of our markets, in
the 3% to 5% range.
We anticipate accelerating growth in the second half of the year driven by the phasing of our
innovation plans and a step-up in brand and marketing investment, said Chief Executive Paul
Polman.
Distribution and outsourcing group Bunzl said it has agreed to buy a group of businesses in France
and a marketing services business in the UK. Bunzl said the firms are Frances Hedis, which is
engaged in the sale and distribution of cleaning & hygiene related products, while both
Comptoir de Bretagne and Gnrale Collectivits distribute light catering equipment and
tableware.
Bunzl said the acceptance of its offer for the business in France is subject to the completion of a
consultation process with the relevant works councils of the target companies, which Bunzl said is
expected to be initiated shortly.
The FTSE 100-listed firm also said it has recently acquired Pixel Inspiration, a marketing services
business in the UK which specialises in digital signage.
The price of the acquisitions wasnt disclosed. However, Bunzl said that so far this year it has
acquired, or agreed in principle to acquire, 10 businesses for a total committed spend of
approximately GBP530 million.
GlaxoSmithKline said on Wednesday it will sell its Horlicks malted milk hot beverage brand and
undertake a strategic review of its cephalosporins antibiotics business, under plans to improve
the efficiency and competitiveness of its manufacturing network.
The pharmaceutical and consumer healthcare giant said the strategic review of its cephalosporins
antibiotics business includes an option to sell the business along with its associated manufacturing
facilities. The medicines are produced at sites in Ulverston, Cumbria, Verona in Italy and part of its
Barnard Castle site in Durham.
Glaxo has also decided to outsource some manufacturing activity at its Worthing site in the UK,
while deciding not to proceed with a previously planned investment to build a biopharmaceutical
facility in Ulverston as it no longer needs the additional capacity.
IG says futures indicate the FTSE 100 index to open 9.69 points higher at 7,440.60. The blue-chip
index ended up 0.6%, or 40.69 points, at 7,430.91 on Wednesday.
The ECB Governing Council meets in Frankfurt, Germany, with the meeting to be followed by a press
conference with President Mario Draghi at 1330 BST.
The market has been bullish on the euro as the eurozone economy appears to have found firm
ground, amid healthier consumer inflation and gross domestic product data.
Investors have priced in a more hawkish attitude from the central bank since last month, when
Draghi considered the risks surrounding the euro area growth outlook to be broadly balanced.
However, some analysts believe this investor confidence in another hawkish move by the ECB is
somewhat overdone.
While no change in policy is expected today it is against this backdrop that Draghi will be looking
to manage expectations about the timetable for future monetary policy, with markets expecting
some form of clarity as soon as the September meeting, by way of the Jackson Hole Central Bank
annual symposium in August where we might get further clues, comments CMC Markets chief
market analyst Michael Hewson.
The single currency was quoted at USD1.1513 early Thursday against USD1.1521 at the European
equities close on Wednesday. That is still near the euros highest level in over a year against the
dollar.
Analysts at French bank Societe Generale believe Draghi will signal a dovish tightening.
Managing the communication will not be easy; at the same time seeking to maintain market
expectations that policy normalisation is underway, but also avoiding another bond sell-off and
euro appreciation, said SocGen.
In Asia, the Japanese Nikkei 225 index in Tokyo closed up 0.6%.
The Bank of Japan kept its monetary stimulus unchanged as widely expected on Thursday.
Governor Haruhiko Kuroda and the central banks board decided by an 7-2 majority vote to hold its
target of raising the amount of outstanding Japanese government bonds holdings at an annual pace
of about JPY80 trillion. The BoJ will purchase government bonds so that the yield of 10-year
Japanese government bons will remain at around zero.
The board also decided to maintain the -0.1% interest rate on current accounts that financial
institutions maintain at the bank. Annual inflation is likely to continue on an uptrend and increase
toward 2.0%, the bank said.
The monetary policy decision by the BoJ will be followed by a press conference with Kuroda at 0730
BST.
In China, the Shanghai Composite is up 0.4%, while the Hang Seng index in Hong Kong is also up
0.4%.
Wall Street ended higher on Wednesday, with the Dow Jones Industrial Average up 0.3%, the S&P
500 index up 0.5%, and the Nasdaq Composite up 0.6%.
Elsewhere in the economic calendar on Thursday, the German producer price index is at 0700 BST,
while the eurozone current account balance is at 0900 BST and eurozone consumer confidence is at
1500 BST.
UK retail sales are at 0930 BST. In the US, initial and continuing jobless clams are at 1330 BST,
together with the Philadelphia Fed manufacturing survey.
By Daniel Ruiz; danielruiz@alliancenews.com
Copyright 2017 Alliance News Limited. All Rights Reserved.
Market News and Views
The FTSE 100 is called to open higher this morning following the overnight performances on Wall
Street and in Asia with the Bank of Japan keeping its monetary stimulus unchanged but cut its
inflation forecast as it pushed back the timeframe by a year for it to achieve its 2% inflation target to
end March 2020 Investors will now be looking ahead to the outcome of the ECB meeting and Mario
Draghi's subsequent lunchtime press conference on its policy guidance going forward. The economic
diary today also sees the release of domestic retail sales data, the latest US weekly jobless claims
and Philly Fed manufacturing index. Commodity prices are mixed and on the foreign exchanges, the
pound is slightly higher against both the dollar and the euro but all the key currencies are trading
within narrow ranges ahead of these data releases and Mario Draghi's speech.
Company Announcements
easyJet
Q3 IMS reports that total revenue per seat grew 2.2% at constant currency, ahead of guidance and
rose by 5.9% on a reported basis to 57.78 per seat. Total revenue in the period increased 16% to
1.38bn with the headline cost per seat including fuel improving by 5.5% at constant currency due
to low fuel prices and an underlying cost focus. Net cash at 30 June 2017stood at 426m and it has
received approval for its Air Operator Certificate and airline operating licence from the Austrian
authorities, securing its future operations in Europe. It noted that 67% of expected bookings for Q4
have now been secured and based on this, revenue per seat at constant currency for the 6 months
ending September is expected to fall by around 2%. There is no change to cost guidance with
headline PBT guidance for FY2017 now expected in the range of 380m-420m. It added that
with the ongoing low cost of fuel allowing capacity to stay in the market, it currently expects ongoing
pressure on yields into the next financial year.
 Howden Joinery
Half Year Results sees group revenue ahead at 553m with UK depot revenue +4% and +2.4% on a
same depot basis at 539.5m. Operating profit was lower at 66.6m reflecting the costs of its new
distribution centre and product introduction programme with PBT declining to 65.6m. The interim
dividend has been raised to 3.6p and net cash at 10 June 2017 stood at 215.1m. It added that UK
depot revenue rose 6.5% in the first 4 week period of H2 and its overall expectations for the full year
unchanged, although it remains watchful given economic uncertainties.
Markets Results
Markets Summary Previous Change

FTSE 100 7430.91 +40.69

FTSE 250 19693.93 +80.55

Dax 12452.05 +21.66

Dow Jones 21640.75 +66.02

Nasdaq 6385.04 +40.74

S&P 2473.83 +13.22

Hang Seng 26744.51 +72.35

Nikkei 20144.59 +123.73

Commodities Summary Previous Change

Oil 49.62 +0.07

Gold 1238.18 -3.22

Silver 16.21 -0.07

LME copper 3MO $ 5970.00 +3.50

Currency Summary Price Change

/$ 1.3024 +0.0002

/$ 1.1506 -0.0010

$/ 112.15 +0.2720

/ 1.1318 +0.0013

Time Country Indicator Median Previous

9:30 UK Retail Sales m/m 0.4% -1.2%

1:30 EUR ECB Press Conference N/A N/A

1:30 US Unemployment Claims 245k 247k

1:30 US Philly Fed Manufacturing Index 23.4 27.6

Asian Markets
Asian shares rose to their highest levels in nearly a decade on Thursday, bolstered by a surge in
global markets, while the yen eased after the Bank of Japan reinforced expectations that it will keep
massive stimulus in place far longer than other major central banks.
U.S. Markets
US markets pushed further into record territory on the back of better-than-expected results from
Morgan Stanley, with tech shares at the top of the benchmarks
Today's News
The latest plan put forth by Republicans in the US Senate on health care reform would result in
an increase in the number of uninsured people to 32 million by 2026, the Congressional Budget
Office said Wednesday. The plan calls for repealing many provisions of the Affordable Care Act
(ACA), also called Obamacare, with no new legislation to replace it. Before hitting 32 million
uninsured people, the US would first have 18 million uninsured next year and 27 million
uninsured in 2020. The latter would occur after the elimination of the ACA's expansion of
eligibility for the government health care system for poor and disabled people known as Medicaid
and the elimination of subsidies for insurance purchased through the marketplaces established
by the ACA. The CBO also warned that premiums would increase dramatically if Obamacare is
repealed.
GlaxoSmithKline said it will sell its Horlicks malted milk hot beverage brand and undertake a
strategic review of its cephalosporins antibiotics business, under plans to "improve the efficiency
and competitiveness of its manufacturing network". The pharmaceutical and consumer
healthcare giant said the strategic review of its cephalosporins antibiotics business includes an
option to sell the business along with its associated manufacturing facilities. The medicines are
produced at sites in Ulverston, Cumbria, Verona in Italy and part of its Barnard Castle site in
Durham. Glaxo has also decided to outsource some manufacturing activity at its Worthing site in
the UK, while deciding not to proceed with a previously planned investment to build a
biopharmaceutical facility in Ulverston "as it no longer needs the additional capacity". In the
consumer healthcare business, Glaxo said it plans to sell its Horlicks brand in the UK and close
the associated manufacturing site in Slough, while also intending to sell the MaxiNutrition brand
in the UK
Japan's exports jumped 9.7% from a year earlier to JPY66 trillion yen, about $59.1bn, in June
for the seventh consecutive month of increase thanks to a weaker yen, the government said.
Exports to China, Japan's largest trading partner, rose 20% year-on-year to JPY1.25 trillion, the
Finance Ministry said in a preliminary report. Exports to the US also climbed 7.1% to JPY1.3
trillion, while those to the EU grew 9.6% to JPY726.2 billion, the ministry said. Japan's overall
imports jumped 16% to JPY6.17 trillion, which led to a trade surplus of JPY439.9bn in June, the
first black in two months, according to the ministry. Japan has purchased more petroleum and
liquefied natural gas for power generation from abroad since the country's worst atomic disaster
at the Fukushima Daiichi Nuclear Power Station in March 2011, which was hit by a huge
earthquake and ensuing tsunami.
Anglo American saw an 8% increase in copper equivalent production in the second quarter of
2017, compared to the corresponding period of 2016. For the half year as a whole, copper
equivalent production increased by 9%. Chief executive Mark Cutifani said: "We have delivered
another strong production quarter across most of our businesses. "Through the improvements
we have made to our portfolio and the efficiencies we are driving, we continue to unlock the
potential of our world class assets "The production ramps at Gahcho Ku, Minas-Rio and
Grosvenor are also contributing to these ongoing positive performance trends. "We have
increased the full year production guidance for Kumba Iron Ore and are on track to deliver full
year guidance across the rest of our products."
easyJet has reported a strong trading and operational performance in its third quarter and
announced the award of its European Air Operator Certificate in Austria. Passengers carried
increased by 10.8% to 22.3 million, driven by an increase in capacity of 9.5% to 24.0 million
seats and load factor increasing by 1.1 percentage points to 93.1%. Total revenue per seat
increased by 2.2% at constant currency, ahead of guidance and increased by 5.9% on a reported
basis to 57.78 per seat. Total revenue in the quarter increased by 16.0% to 1,387 million, with
a significant benefit from the move of Easter to April, higher load factors, as well as an improving
underlying trend in the trading environment. It said: "Ongoing enhancements to our customer
proposition and other revenue initiatives helped to stimulate bookings and build revenue
momentum throughout the period." easyJet said it delivered strong cost control as headline cost
per seat including fuel improved by 5.5% at constant currency, due to low fuel prices and a
strong underlying cost focus.
Profits at retailer Sports Direct have plummeted nearly 60% largely as a result of the weaker
pound. Underlying pre-tax profit fell to 113.7m, down from 275.2m last year, because of
"currency movements and increased depreciation charges". Chief executive Mike Ashley said it
had now taken steps to "minimise the short-term impact of currency volatility". Sports Direct's
reputation has been badly hit by revelations about staff conditions at its Derbyshire warehouse.
Chairman Keith Hellawell said the company had made "positive progress" across the business
as it continued to "strive to ensure that all of our people are treated with dignity and respect". A
recent survey of workers in Shirebrook, to which 3,300 people responded, had showed that an
"overwhelming majority" of people in the warehouse "currently feel they are treated with respect",
he added. Despite the news shares in the company were up 4.8% in early trading.
Premier Foods reported a drop in first-quarter sales on, due to lower sales volumes in the
grocery category, an outcome it called in-line with its expectations. The company, which is under
mounting pressure to deliver growth after spurning a takeover offer last year from U.S. rival
McCormick and Co, said sales in its first quarter fell 3.1% as a good performance by its Sweet
Treats division was offset by slow sales for its branded grocery products, notably desserts.
However, Premier said it maintained its expectations for the full year saying it expected to report
positive sales growth in the second quarter and broadly flat sales in the first half.
Moneysupermarket.com Group reported a 3% rise in adjusted operating profit, but warned that
this will be at the lower end of market consensus for the full year due to the current trends in
energy trading.The comparison website reported an adjusted operating profit, the figure most
watched by the market and excluding exceptional and other one-off items, of 55.2m for the half
year ended June 30, compared with 53.8m for the same period last year. Pretax profit for the
period rose to 49.5m, from 47.1m on revenue that grew 5% to 165.3m
ConvaTec Group said it has agreed to acquire US-based incontinence-related products
distributor Woodbury Holdings from MTS Health Investors LLC for $120.5m. Through the
acquisition ConvaTec America will create a new home distribution business unit for catheter and
incontinence products, putting together the US distribution companies 180 Medical, Symbius
Medical, South Shore Medical Supply, Wilmington Medical Supply and Woodbury Health
Products. Woodbury provides incontinence and catheter products, including nutritional feeding
and vascular compression supplies, and has national distribution in the US, delivering directly to
customers. Woodbury's senior management will remain with ConvaTec. On acquisition, earnings
from Woodbury will immediately be accretive to ConvaTec's financial accounts.
Oil prices held steady, hanging on to gains made the previous session when falling U.S. crude
inventories lifted the market
Gold finished a few cents higher, extending their streak of gains to a fourth session by a hair.
Companies Reporting this Week
Day Companies

Today: Unilever * Moneysupermarket.com * Anglo American * easyJet * Premier Foods * SSE

Sports Direct

Tomorrow: Vodafone Group * Acacia Mining * Euromoney Institutional Investor

Early Market Movements

Market Index Change % Change

UK 100 7,454.0 +23.1 +0.3%

UK 250 19,715.8 +21.8 +0.1%

GER 30 12,516.5 +64.5 +0.5%

FRA 40 5,241.4 +25.3 +0.5%

U.S. 30 21,640.75 +66.02 +0.3%

U.S. 500 2,473.8 +13.2 +0.5%

OIL (BRENT) 49.68 -0.02 -0.0%

GOLD 1,239.78 -1.47 -0.1%

UK Major Risers & Fallers - 8:15am

Company Price Change % Change

Sportsdirect Group 315.1 +14.4 +4.8%

Ashtead Group 1712 +53 +3.2%

Company Price Change % Change

Tesco 177.3 +2.7 +1.5%

Moneysupermarket.com Group 319.45 -39.95 -11.1%

Easyjet 1383 -35 -2.5%

Schroders 3300 -57 -1.7%

Latest Broker Views

Company Broker Recommendation Price Target

Informa Berenberg Buy 675.5 800.00

Reckitt Benckiser Beaufort Hold 7950 8,000

Group Securities

Rollys-Royce Group Credit Suisse Underperform 924 665

Just Eat Peel Hunt Buy 698 895

Forthcoming Economic Data

Time/Date Previous Forecast Outcome

9:30am: U.K. Retail Sales m/m -1.2% 0.4% -

1:30pm: ECB Press Conference - - -

1:30pm U.S. Unemployment Claims 247k 245k

Interbank Spot FX Rates - 08:05am

Pairing Rate % Change

GBP/USD 1.3023 +0.01%

EUR/USD 1.1520 +0.04%

GBP/EUR 1.1304 -0.07%

USD/JPY 112.1100 +0.13%

USD/CHF 0.9552 -0.04%

GBP/JPY 146.0780 +0.18%

Upcoming UK Dividend Dates

Company Dividend Ex Dividend Date

Vedanta 27p 20/07/2017