7th Jan 2020 07:45
(Alliance News) - Stock prices in London are seen opening in the green on Tuesday, shrugging off continued tensions between the US and Iran.
In company news, 'Big Four' UK grocer WM Morrison Supermarkets set a low bar for peers to follow later in the week, as it reported a disappointing Christmas performance. Luxury carmaker Aston Martin Lagonda's woes from 2019 continued, and Premier Oil bought assets from BP.
IG futures indicate the FTSE 100 index is to open 34.06 points higher at 7,609.40. The blue-chip index closed down 47.06 points, or 0.6%, at 7,575.34 Monday.
Morrisons said challenging trading conditions and sustained consumer uncertainty led to a sales fall in the 22 weeks to January 5. The grocer said like-for-like sales, excluding fuel, were down 1.7% year-on-year. The decline was solely due to a fall in retail sales, as like-for-like performance in the wholesale unit was flat year-on-year.
"Throughout the period, trading conditions remained challenging and the customer uncertainty of the last year was sustained," Morrisons explained.
Including fuel, like-for-like sales decline 2.8% year-on-year during the 22 weeks. Total sales, were down 2.9% year-on-year, but declined 1.8% when not including fuel sales.
The supermarket reiterated its full-year guidance, expecting pretax profit before exceptional costs to be in line with analysts' forecasts. Morrisons ends its financial year on February 2.
Fellow grocers J Sainsbury and Tesco issue trading statements on Wednesday and Thursday respectively.
Aston Martin Lagonda Global Holdings said difficult trading conditions it experienced throughout 2019 continued through December, resulting in lower sales, higher selling costs and lower margins.
The Valkyrie hypercar maker said core car wholesales declined 7% year-on-year to 5,809 units. It attributed the poor performance to a weaker mix of vehicles and lower-than-expected wholesale sales.
Aston Martin now sees 2019 adjusted earnings before interest, tax, depreciation and amortisation to come in at a range between GBP130 million and GBP140 million. In 2018, adjusted EBITDA came in at GBP247 million.
The carmaker said sales of its lowest priced Vantage sportscar improved in the fourth quarter, supported by retail financing particularly in the UK and the US. Moreover, the order book for the new DBX sports utility vehicle has "built rapidly" to 1,800 since it opened in November 2019, it added.
Chief Executive Officer Andy Palmer said: "From a trading perspective, 2019 has been a very disappointing year. Whilst retails have grown by 12%, our best result since 2007, our underlying performance will fail to deliver the profits we planned, despite a reduction in dealer stock levels.
"We are taking a series of actions to manage the business through this difficult period. This will include a cost saving programme alongside a focus on returning dealer stock levels to those more normally associated with a luxury company; winning back our strong price positioning is a key focus."
Premier Oil reported 2019 production of 78,400 barrels of oil equivalent per day, which is at the upper end of guidance.
The oil company said development, exploration and abandonment expenditure for 2019 is estimated at around USD300 million, below original guidance of USD340 million.
This, it explained, was due to the release of contingency spend related to the BIG-P drilling programme, the Tolmount project tracking below budget and "some deferral of spend" into 2020.
In addition, Premier Oil said it has agreed to acquire Andrew Area and Shearwater assets from oil major BP for USD625 million. The oil company also is to acquire an additional 25% interest in the Premier Oil operated Tolmount Area from Dana Petroleum for USD191 million.
The proposed acquisitions, Premier said, will be funded via a USD500 million equity raise which has been "fully underwritten on a standby basis" and existing cash.
Premier Oil said it expects that the equity raise will include both a share placing and rights issue.
US equities ended higher on Monday, after having started lower, bucking a down day in Europe and Asia in response to the US killing of Iranian general Qasem Soleimani last week.
The Dow Jones Industrial Average closed up 0.2%, S&P 500 up 0.4% and Nasdaq Composite up 0.6%, all three setting new intraday record highs, despite opening lower.
The Japanese Nikkei 225 index closed up 1.6% on Tuesday. In China, the Shanghai Composite closed up 0.6%, while the Hang Seng index in Hong Kong is up 0.4%.
The pound was quoted at USD1.3161 early Tuesday in London, flat from USD1.3165 late Monday.
UK Prime Minister Boris Johnson is to chair a meeting of the National Security Council as Britain continued to urge all sides in the Middle East crisis to draw back from all-out conflict.
Foreign Secretary Dominic Raab spoke on Monday to his Iranian counterpart Mohammed Javad Zarif to stress the need for a diplomatic resolution to avoid a renewed conflict in the region.
Tehran has vowed "severe revenge" for the killing of its top military commander Qassem Soleimani in a US drone strike last week.
President Donald Trump in turn has warned the US was ready to strike back in a "disproportionate" manner if the Iranians hit US targets.
The euro was quoted at USD1.1188 early Tuesday, flat from USD1.1187 late Monday.
Against the yen, the dollar was unchanged from JPY108.37 late Monday.
Oil was quoted at USD68.28 a barrel Tuesday, lower than USD68.94 late Monday, slipping back from the USD70 mark reached on Monday.
Gold was quoted at USD1,566.95 early Tuesday, firm against USD1,562.34 late Monday, though retreating from multi-year highs reached on Monday.
The economic events calendar on Tuesday has eurozone inflation figures at 1000 GMT.
By Arvind Bhunjun; [email protected]
Copyright 2020 Alliance News Limited. All Rights Reserved.
Related Shares:
PMO.LAston Martin Lagonda