Thursday 21 September 2017

Grafton paves way to FTSE 250 with UK nationality classification

DIY MATERIALS supplier Grafton, the owner of Woodies and Homebase, has been assigned a UK nationality classification by London exchange the FTSE – paving the way for its entry on to the world-famous FTSE 250 Index. A listing on the FTSE 250 Index will be important in securing the type of international institutional investors Grafton is hoping to attract, who tend to favour companies listed on larger, internationally-renowned indexes. The final decision will be made on December 11.

Grafton abandoned its listing on the Irish Stock Exchange last month in favour of London. In addition to the desire to attract institutional investors, analysts said the move made sense because three-quarters of all Grafton's sales and 90pc of its profits come from the UK, where it has a chain of building and plumbers' merchanting outlets. Since its Irish listing required sterling sales to be converted to euros, this left the company open to currency volatility. Changes to the sterling/euro exchange rate have also previously resulted in differences between reported results and actual results.

STARBUCKS PAYS €2BN SETTLEMENT TO MONDELEZ

FOOD

STARBUCKS has said it will pay global food giant Mondelez $2.76bn (€2.06bn) to settle a dispute over the coffee-shop chain's bagged-coffee business after being ordered by an independent arbitrator. The ruling may settle a dispute that began in 2010, when Starbucks offered $750m to terminate an agreement through which Mondelez, then known as Kraft Foods, distributed its coffee to food retailers. The world's largest coffee chain was seeking to generate more of its revenue from grocery stores with new offerings such as Via, its single-serve coffee product. But Kraft rejected the offer and sought compensation for the "fair market value" of the business plus a premium of as much as 35pc of that value.

The payment will consist of $2.23bn in damages and $527m in interest and attorneys' fees. The company said it has adequate cash and borrowing capacity to fund the payment and will book it as a charge to its fiscal 2013 operating expenses. Mondelez said it would use the proceeds from the award to buy back stock. "They are paying more than I expected," said LA-based analyst Nick Setyan. "Having said that, it's great to have it behind us now."

EASYJET TO FIT VOLCANIC ASH DETECTORS

AIRLINES

EASYJET, Europe's second-biggest discount carrier, aims to fit sensors capable of detecting volcanic ash on some of its planes by the end of next year.

EasyJet, European plane manufacturer Airbus and Nicarnica Aviation tested the equipment last month in an artificial ash cloud at between 9,000 and 11,000 feet, the carrier said yesterday.

The system sensed ash from as far away as 60km, a distance at which pilots could adjust flightpaths around dangerous clouds, EasyJet said.

The technology could help avoid the type of massive losses incurred in April 2010, when European airline traffic fell 12pc, exceeding the worst declines of the recession, as ash from Iceland's Eyjafjallajökull volcano grounded 100,000 flights.

Carriers lost at least $1.7bn (€871m) in the first six days of the event, industry figures show.

The ash cloud created during the test was between 600 feet and 800 feet deep, measured 2.8km in diameter and was visible to the naked eye before dissipating, the airline said.

STRONGER MARKETS GIVE LONDON STOCK EXCHANGE 44PC REVENUE RISE

STOCKS

THE COMPANY behind the London Stock Exchange has reported a rise in profits for the first half of its financial year, helped by a strong market for new listings and its efforts to diversify the business.

Under chief executive Xavier Rolet the LSE has sought to broaden its earnings, moving into strong potential growth areas to offset a squeeze on profits from falling trading volumes in an uncertain economic climate and increased regulation. The exchange took control of indexes business FTSE International in 2011 and completed the acquisition of clearing house LCH Clearnet earlier this year. "Today the group has a strong complementary portfolio of global brands, services and products," Rolet told reporters. "The first half of this year has been transformational for the group as we continue to diversify our offering." The LSE has also benefited from a resurgence of initial public offerings (IPOs), as strong equity markets have encouraged companies to list after several years of drought. Bankers say many firms are working on planned listings for next year.

Group revenue rose 44pc to £504.2m (€599.7m) for the six months to the end of September while operating profit rose to £229.9m.

Irish Independent

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