6th Nov 2018 07:43
LONDON (Alliance News) - Stock prices in London are seen opening tentatively higher on Tuesday, as investors exercise caution ahead of the US midterm elections, while Imperial Brands and Associated British Foods delivered positive annual performances, both lifting their dividends by 10%. IG futures indicate the FTSE 100 index is to open up 18.76 points, or 0.3%, at 7,122.60. The blue chip index closed up 0.1%, or 9.72 points at 7,103.84 on Monday.In early UK corporate news, Imperial Brands said financial 2018 was a "successful year", with strong financial delivery, revenue and earnings growth, high cash generation and a dividend increase. For the year that ended in September, revenue rose 0.9% to GBP30.52 billion from GBP30.25 billion last year. On an adjusted basis, pretax profit increased 1.8% to GBP3.32 billion from GBP3.26 billion the year before. This beat the company-supplied consensus which had estimated adjusted pretax profit at GBP3.28 billion.Adjusted operating profit at group level was broadly flat at GBP3.77 billion from GBP3.76 billion last year, but higher than the company-supplied consensus estimate of GBP3.72 billion.Imperial Brands declared an annual dividend of 187.8 pence, up 10% from 170.70p last year. This maintains the company's record over recent years of increasing the dividend yearly by at least 10%. "The group is well positioned to deliver strong, sustainable shareholder returns. We remain committed to our Tobacco Maximisation strategy and investment in growth opportunities to enhance the performance of our Growth Brands and priority markets. Our tobacco business will continue to deliver modest revenue growth, high margins and strong cash flows. Our NGP business is a significant additive opportunity on top of tobacco, with its stronger growth prospects contributing to margins and cash returns over time," said Imperial Chief Executive Alison Cooper. Associated British Foods said it saw another year of progress for the group buoyed by its Primark discount retail arm. For the financial year ended September 15, AB Foods revenue rose 1.3% to GBP15.57 billion from GBP15.36 billion last year. Pretax profit slipped 18% to GBP1.28 billion from GBP1.57 billion last year, although on an adjusted basis pretax profit rose 4.6% to GBP1.37 billion from GBP1.31 billion the year before. At Primark, the company said sales were up 6% to GBP7.47 billion, while the clothing chain's operating profit increased 15% to GBP843 million. AB Foods declared a final dividend of 33.3p taking the total payout to 45.0p, representing a 10% increase from last year. Looking ahead to the new financial year, AB Foods said: "The profit at AB Sugar will be significantly lower, reflecting the full-year effect of the current level of EU sugar prices which will represent a further reduction on the average prices achieved this year. At current exchange rates we expect no material translation or transactional effect on profit but the sterling exchange rate can be expected to be volatile given a period of intense Brexit negotiations. Taking these factors into account, at this early stage, we expect adjusted earnings per share for the group for the coming year to be in line with this year."WM Morrison Supermarkets said it saw a good third quarter with strong sales growth, as it provided a "better and broader offer for customers across the whole store".For the 13 weeks to November 4, like-for-like sales excluding fuel were up 5.6%, which was made up of contributions from retail of 1.3% and wholesale of 4.3%. Like for like sales including fuel was up 6.0%. The company said retail sales growth eased slightly without the favourable effects of warmer weather and the football World Cup which benefited the second quarter. "After another period of strong growth, and with more customers enjoying shopping at Morrisons, we have now completed three years of positive like for like. Our exceptional team of food makers and shopkeepers are providing good quality food at great prices, and building a broader offer in store, online and for our wholesale customers," said CEO David Potts. In UK economic data, the "all-important golden quarter" for retail sales has got off to a fairly flat start as cautious consumer spending continues in the UK into the final three months of 2018, a report has found.October marked the start of the golden quarter - the last three months of the year when some retailers earn the majority of their profits as shoppers stock up for Christmas.But the British Retail Consortium-KPMG retail sales monitor found that in October, total retail sales increased by 1.3% year-on-year across the UK. On a like-for-like basis, retail sales increased by 0.1% from October 2017.The Japanese Nikkei 225 index closed up 1.1%. In China, the Shanghai Composite closed down 0.4%, while the Hang Seng index in Hong Kong is up 0.2%.In the US on Monday, Wall Street ended broadly higher, with the Dow Jones Industrial Average up 0.8% and S&P 500 up 0.6%, though the Nasdaq Composite closed 0.4% lower.Voters in the US will head to the polls on Tuesday for the highly anticipated midterm elections, which will decide control of both the House and Senate.All 435 seats in the US House of Representatives are up for re-election. A total of 35 US Senate seats out of the 100 total are in play, as well as almost 40 out of 50 state governor positions and the balance of power in virtually every state chamber.US President Donald Trump's Republican party currently holds a monopoly in Washington. Should Democrats win control of the House of Representatives, as strategists in both parties suggest is likely, they could derail Trump's legislative agenda for the next two years."Dollar bulls are looking for a Republican win, which will supportive of more of Trump's expansionary fiscal policies being pushed through. A democrat win, and the resultant political deadlock is considered more bearish for the US dollar and US equities although we expect this to be a short-term reaction. The unexpected result of a blue wave with Democrats taking both the Senate and the House would likely shock the markets resulting in an aggressive selloff in the greenback and US equities," London Capital's Jasper Lawler noted.In the economic events calendar there are services PMI readings from Italy, France, Germany and eurozone at 0845 GMT, 0850 GMT, 0855 GMT and 0900 GMT respectively. There is also eurozone producer prices at 1000 GMT.The pound was firm against the dollar quoted at USD1.3064, up against USD1.3022 at the London equities close Monday.UK Prime Minister Theresa May faces her Cabinet on Tuesday after Dublin insisted it would not accept any unilateral UK ability to end a Brexit backstop agreement on the Irish border.The meeting of senior ministers comes after Justice Secretary David Gauke said a no-deal EU exit would be "very bad" for the UK economy.May is understood to be seeking an opt-out to dampen hardline Conservative and DUP concerns over plans for the whole of the UK to remain temporarily in a customs union with the EU after Brexit in order to avoid a hard border in Ireland.Remain would win a new Brexit poll by 54% to 46%, according to analysis of one of the largest surveys carried out on the issue.Some 20,000 people were questioned in a Survation poll for Channel 4 which estimated 105 local authority areas that voted Leave in 2016 would now be carried by the Remain side.Related Shares:
MRW.LAB FoodsImperial Brands