FirstGroup puts American division on the market, Spirax-Sarco warns of coronavirus impact

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UK-based transport operator FirstGroup said it had put its North American contract businesses up for sale as the company rationalised its portfolio, adding that it had received “significant” interest from potential buyers. First, which operates bus and rail services, also said group revenue was up 7.5% in the year to date with trading trends in its First Student, First Transit and First Bus “broadly similar to first half, with industry cost inflation and volatile passenger demand largely mitigated by management action and growth”.

Spirax-Sarco warned the impact of the coronavirus and currency movements would offset underlying growth in 2020 as the industrial engineering company reported a 7% increase in adjusted profit for 2019. Adjusted operating profit for the year to the end of December rose to £282.7m from £264.9m as revenue rose 8% to £1.24bn. Pretax profit fell 18% to £236.8m due to a non-recurring gain from a disposal in 2018. The FTSE 100 company said it expected coronavirus to reduce annual sales and profit by 2% to 4%. Combined with negative currency movements this will offset expected underlying annual organic growth, the company said.

Quilter reported a year of “significant” strategic progress in its full-year results on Wednesday, with underlying profit performance ahead of market expectations and £375m of capital returned. The FTSE 250 company said its adjusted profit before tax was up 1% to £235m, of which £53m was from Quilter Life Assurance. Its adjusted diluted earnings per share slipped to 11.3p, however, from 13.5p.

Newspaper round-up

Saudi Arabia, the world’s biggest oil exporter, has spelled out details of the dramatic increase in its production that prompted Monday’s huge falls in global stock markets and is regarded as a targeted attack on the US shale oil industry. The state-owned oil firm Saudi Aramco said in April, when a three-year OPEC deal with Russia expires, it would increase output from 9.7m barrels per day (bpd) to 12.3m, flooding the market and bringing oil prices lower. - Guardian

Battered airlines have been thrown a lifeline by Brussels as the industry reels from the coronavirus with thousands of jobs at risk. Rules which force carriers such as British Airways and Virgin Atlantic to run almost empty "ghost flights" at a massive loss in order to keep their prized landing slots have been suspended after the outbreak brought major players to the brink of collapse. – Telegraph

Aviva is cutting back on travel cover in new insurance policies due to the coronavirus outbreak. The insurer confirmed that although people will still be able to buy its travel insurance, they will be unable to add cover for travel disruption, the BBC first reported. – Telegraph

The deficit in traditional pension funds is set to expand by as much as £150 billion because of the unprecedented fall in government bond yields. Aggregate shortfalls in the 6,500 defined-benefit schemes in Britain leapt from £75 billion to £125 billion in February alone, the Pension Protection Fund said yesterday. – The Times

One of America’s biggest shale oil producers has slashed its dividend by 86 per cent in response to the collapse in global crude prices. Occidental Petroleum, whose shares halved in value on Monday, said that it would cut its capital expenditure this year by $1.7 billion, or more than 30 per cent, as it tried to weather the crisis. – The Times

US close

US stocks closed sharply higher on Tuesday following the Dow Jones and S&P 500's worst daily showings since the Global Financial Crisis in the previous session.

At the close, the Dow Jones Industrial Average was up 4.89% at 25,018.16, while the S&P 500 was 4.94% firmer at 2,882.23 and the Nasdaq Composite saw out the session 4.95% stronger at 8,344.25.

The Dow closed 1,167.14 higher on Tuesday, cutting in half losses seen in the previous session after coronavirus fears continued to roil shares, which combined with an unexpected record cut in prices from oil producer Saudi Arabia to make for a particularly dark day on Wall Street.

Donald Trump suggested on Monday that some sort of "payroll tax cut or relief" was being considered to offset the negative impact of the outbreak.

While sentiment took a turn early in the session after White House officials told CNBC that the President wasn't even close to rolling out any specific proposals aimed at dealing with a coronavirus-fuelled economic slowdown, markets got a boost after it was later reported that the President had pitched a 0% payroll tax rate for the rest of 2020.

Oil prices suffered in the previous session, with West Texas Intermediate prices diving more than 24% in their worst day since 1991 after Saudi Arabia cut crude prices for April following a collapse in OPEC+ talks.

Prices rallied on Tuesday, with West Texas Intermediate crude up 12.01% at $34.87 per barrel and Brent crude ahead 10.39% at $37.93 a barrel.