What to Watch: Nuclear business sold for £250m, Persimmon profits fall, and crypto company inks energy deal
Here are the top business, market, and economic stories you should be watching today in the UK, Europe, and abroad:
Nuclear business sold for £250m
John Wood Group (WG.L), the Aberdeen-headquartered energy company, has agreed to sell its nuclear business for £250m ($302m).
Wood Group is offloading the business to American industrial group Jacobs. The deal includes an agreement that Jacobs will pay Wood £7.5m if the UK’s competition watchdog does not clear the deal.
David Kemp, Wood’s chief financial officer, said: “The sale of our nuclear business follows other recent divestments and marks a significant step towards achieving Wood’s target leverage policy.
“Although our nuclear business is a strong UK player and has performed well, we see better opportunities to develop clear global leadership positions across other parts of our business.”
Persimmon profits fall
House builder Persimmon (PSN.L) has announced a fall in revenues and profits as it focuses on building better quality homes at the expense of volume.
Pre-tax profit fell by 1.3% to £509.3m in the six months to June 30, while revenue fell by 4.5% to £1.7bn.
The number of new homes sold slowed to 7,584, versus 8,072 in the same period last year.
Persimmon’s chief executive Dave Jenkinson said: “Improving the quality and service delivered to our customers remains our top priority and I am encouraged with the progress made in the first half, which clearly shows that Persimmon is changing.”
Pound falls to $1.20
The pound fell against both the euro and the dollar on Tuesday morning as fears continued that Britain is heading for a disruptive hard Brexit on 31 October.
Prime Minister Boris Johnson wrote to European Council president Donald Tusk late on Monday reiterating his call for the EU to scrap the so-called Irish backstop.
He called for “alternative arrangements” to avoid a hard border in Ireland and urged the EU to help find “flexible and creative” solutions.
The proposals that meet with an immediately frosty reception in Brussels. An EU source told the Guardian: “The withdrawal agreement is not open for renegotiation and the backstop is not open for change.”
Sterling was down 0.3% against the dollar to $1.2089 (GBPUSD=X) and down 0.3% against the euro to €1.0906 (GBPEUR=X) at just before 8.30am UK time on Tuesday.
Blockchain business boosts energy supply
Shares in cryptocurrency business Argo Blockchain (ARB.L) leapt higher on Tuesday after the company announced a deal it said would make it “the largest publicly listed crypto miner in the world.”
Argo, whose largest shareholder is colourful oil boss Frank Timis, announced that it has signed a deal with a Canadian data centre company to boost its electricity supply by 357%.
The increased supply will allow it to run up to 15,000 extra cryptocurrency mining computers and will be funded “out of crypto mining proceeds from Argo's existing facilities in Quebec.”
Mike Edwards, executive chairman of Argo, said: "We are taking another major leap in expanding our mining capacity as the crypto-mining industry goes from strength to strength.
“By 2020, our aim is for Argo to be both the most efficient and the largest publicly listed crypto miner in the world.”
Argo’s share price rose by 13.8%.
Hong Kong tycoon swoops for Greene King
Shares in brewer and pub owner Greene King (GNK.L) surged over 50% in late trade on Monday, after news broke of a surprise takeover deal that valued the company at £2.7bn.
Hong Kong-based property developer CK Asset Holdings, which was founded by billionaire Li Ka-shing, announced a 850p-a-share takeover bid for Greene King late on Monday.
The all-cash bid represents a premium of 51% on Friday’s closing price of 563p and values Greene King at £2.7bn, or £4.6bn on an enterprise value basis.
"CKA's strategy is to look for businesses with stable and resilient characteristics and strong cash flow generating capabilities,” said George Colin Magnus, non-executive chairman designate of CK Bidco, the vehicle making the takeover offer.
“The UK pub and brewing sector shares these characteristics and we believe that this sector will continue to be an important part of British culture and the eating and drinking out market in the long run.
Ofgem investigates blackouts
Energy regulator Ofgem has launched an investigation into National Grid (NG.L) after power cuts last month left hundreds of thousands of homes across Britain without electricity.
A lightning strike and the sudden loss of two large electricity generators were "partly to blame" for the blackout on 9 August, according to an interim report.
Ofgem said it wants to “establish what lessons can be drawn from the power cut to ensure that steps can be taken to further improve the resilience of Britain's energy network.”
Mining boss warns on ‘nationalism’
The world’s largest mining company has warned that increased nationalism, interference by governments in global supply chains, and the US-China trade war threaten global economic growth.
BHP (BHP.L) CEO Andrew Mackenzie said that the trade standoff between the US and China was a consideration for the company, warning that there was “no doubt” that it would “put a dampener on world economic growth.”
“Ultimately it will impact demand for our products,” he said, noting that the effect would be limited in the short to medium term thanks to stimulus measures in China and strong demand in Australia.
Mackenzie similarly warned that “increased nationalism” and the “increased assertion by governments to interfere in global supply chains and capitalism” were considerations for his company and the global economy.
Markets in the green
European markets were cautiously rising on Tuesday morning, boosted by hopes of economic stimulus in the US that would spur growth.
Britain’s FTSE 100 (^FTSE) was down up by 0.2%, France’s CAC 40 (^FCHI) was up by 0.2%, Germany’s DAX (^GDAXI) was up by 0.1%, and the Euronext 100 (^N100) was up by 0.1%.
“Unable to justify another day of gains, the European markets moved sideways after the bell, at most eking out a smidge of growth here or there,” Connor Campbell, a financial analyst at SpreadEx, said in an email.
“Helping to keep the indices on the right side of the green/red divide were Trump’s latest attempts to bully the Federal Reserve into another rate cut. The President decried the ‘horrible lack of vision by Jay Powell’ and his colleagues while calling for ‘at least’ a 100 basis point decrease in interest rates over the coming months.
“Wednesday’s meeting minutes and the Jackson Hole Symposium, starting on Thursday, may give investors an idea as to how receptive the Fed is to Trump’s hectoring.”
Overnight in Asia, Japan’s Nikkei (^N225) closed up by 0.5%, but the Hong Kong Hang Seng Index (^HSI) and China’s Shanghai Composite (000001.SS) both closed down by 0.1%.
What to expect in the US
US stocks future are pointing to quiet open later today. S&P500 futures (ES=F) were up 0.1%, Dow Jones futures (YM=F) were up by 0.1%, and Nasdaq futures (NQ=F) were up by 0.1%.
Companies reporting today later in the US include:
