Three things you need to know in the financial markets this morning from investment writer, Tony Cross.
InterContinental Hotels
Full year results are out from hoteliers IHG LON:IHG this morning showing revenues up 8%, operating profits up 4%, but RevPAR – the revenue per available room – had fallen by 0.3%. Greater China had the biggest impact here with ongoing unrest in Hong Kong making a specific mention, but with the company having significantly grown its footprint in the country over recent years, it seems inevitable that the Coronavirus will prove damaging in terms of the year ahead. Dividends are up by 10%.
HSBC
Earnings from HSBC LON:HSBA were released overnight and although the business posted a £10.3bn profit, this was down by around one third from a year earlier. Write offs in various – predominantly European – divisions of the bank lead the adjustment, but again as with IHG above, investors are more likely to be focused on the slowing Asian economy as a result of the Coronavirus outbreak. This is acknowledged in the note, as is the fact that RoTE (Return on Tangible Equity) has declined 0.2% to 8.4%, bucking a trend where other major banks are targeting 10%. Shares have already sold off in the Hong Kong market.
ITM Power
Something a little left field here, but small cap ITM Power LON:ITM is a UK company working hard in driving the country’s ambitions to become carbon neutral. Its shares have trebled in value over the last six months and today’s news is of a £7.5m funding grant from the UK government. The funds are to further work already undertaken in producing hydrogen without any carbon emissions, by using surplus offshore wind power. In the grand scheme, the numbers here remain miniscule, but with hydrogen able to run cars or be injected into the natural gas network, getting these processes to work at scale is something that should be applauded.
