24th Aug 2020 07:48
(Alliance News) - Stock prices in London are seen opening higher on Monday amid hopes of an alternative treatment in the fight against the novel coronavirus.
In early company news, distribution firm Bunzl reiterated its dividend after reporting robust interim results. Education publisher Pearson ended the long search for a new chief executive. Pub chain JD Wetherspoon said reported a drop in sales, while defending itself against media reports and MP tweets about Covid-19.
IG futures indicate the FTSE 100 index is to open 28.41 points higher at 6,030.30. The blue-chip index closed down 11.45 points, or 0.2%, at 6,001.89 Friday.
Bunzl said it delivered a resilient performance in the first half despite the unprecedented challenges posed by the Covid-19 pandemic.
For the financial year ended June 30, revenue rose 7.0% to GBP4.85 billion from GBP4.53 billion last year, and pretax profit was up 22% to GBP245.4 million from GBP200.5 million.
Bunzl raised its interim dividend 1.9% to 15.8 pence from 15.5p paid out last year.
As a result of the better-than-expected trading performance during the first half of the year. Bunzl said it also has decided to reinstate and pay the final dividend for 2019 at the same level as originally proposed of 35.8p. Bunzl said that, as it is no longer possible for this dividend to be approved by shareholders at the annual general meeting, it will be paid as an additional interim dividend in November.
"Looking forward, although there remains considerable uncertainty, we expect to face challenging trading conditions during the second half of the year. However, the fundamental aspects of our business model remain attractive with the group's strong cash generation allowing us to maintain Bunzl's long track record of dividend growth and continue our compounding strategy of consolidating the group's fragmented markets through focused acquisitions," said Chief Executive Frank van Zanten.
Pearson said it appointed Non-Executive Director Andy Bird as its new chief executive to replace the outgoing John Fallon. Bird will assume the role on October 19, and Fallon will continue as CEO until that date. Bird joined the education publisher in May. He spent 14 years at Walt Disney Co and was chair of Walt Disney International.
JD Wetherspoon said it reopened all its pubs in England, Scotland and Wales as soon as permitted. The pub chain said some airport and station pubs have now reopened, but some remain closed. In total, 844 pubs are now open, out of a total of 873.
Like-for-like bar and food sales were down 17% for the 44 days to August 16.
The pub operator said sales have gradually improved, with a rapid acceleration recently, largely due to the UK government's subsidised food, coffee and soft drinks scheme that benefits the early part of the week. However, Wetherspoon expects a period of more subdued sales once the scheme for subsidised early-week meals and drinks scheme ends.
"The company expects to make a loss for the year ending July 26, both before and after exceptional items. Some of these exceptional items will be related to the Covid pandemic," Chair Tim Martin said.
Wetherspoon said it remains in a sound financial position. Net debt at the end of its financial year on July 26 is estimated to have been about GBP825 million.It also proposes to enter discussions with lenders regarding waivers for the current financial year, in due course.
Wetherspoon also hit out at a "large number of harmful media misrepresentations" in the aftermath of lockdown in the national press and from members of parliament on social media. It said claims that it was "allowing overcrowding" at its pubs were "irresponsible and untrue".
Elsewhere, US authorities announced on Sunday an emergency authorisation for doctors to use blood plasma from recovered coronavirus patients as a treatment against the disease that has killed over 176,000 in the US.
The move by the US Food & Drug Administration comes as President Donald Trump faces intense pressure to curb the contagion that has impaired the world's largest economy and dimmed his prospects for re-election in November.
The plasma is believed to contain powerful antibodies that can help fight off the disease faster and help protect people from being seriously hurt by it.
"Markets are opening this morning to optimism on the therapeutics front after the FDA authorized the use of blood plasma from Covid-19 survivors to treat sick patients. Not the Covid-19 cure all the world is hoping for, but it is another positive step to help patient recovery time and get people back on their feet quicker," said AxiCorp's Stephen Innes.
The Japanese Nikkei 225 index closed up 0.3%. In China, the Shanghai Composite is up 0.1%, while the Hang Seng index in Hong Kong is up 1.3%.
On the trade front, Trump on Sunday again said he is willing to largely end trade with China, known as decoupling.
"If they don't treat us right, I would certainly do, I would certainly do that," Trump said when asked about decoupling during an interview with Fox News that aired on Sunday.
"We get nothing from China," Trump added.
The president has been increasingly bellicose with China, saying that he no longer values the US interim trade deal with Beijing and referring to the novel coronavirus as the "China Virus""
The pound was quoted at USD1.3093 Monday morning, flat from USD1.3090 at the London equities close Friday.
The euro was priced at USD1.1794 early Monday, firm from USD1.1785 late Friday. Against the yen, the dollar was quoted at JPY105.90 in London, flat from JPY105.89.
Brent oil was trading at USD44.39 a barrel Monday morning, up from USD43.84 on Friday evening. Gold was quoted at USD1,932.46 an ounce, down from USD1,941.70.
By Arvind Bhunjun; [email protected]
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