26th Nov 2019 07:41
(Alliance News) - Stock prices in London are set to open higher on Tuesday buoyed by hopes that the US and China soon will announce a partial trade deal.
In early company news, it was all about food. Contract caterer Compass Group raised its dividend after reporting annual results in line with expectations, while sandwich maker Greencore Group reported a sharp rise in annual profit.
IG futures indicate the FTSE 100 index is to open 13.11 points higher at 7,409.40. The UK blue-chip index closed up 69.48 points, or 1.0%, at 7,396.29 on Monday.
Top US and Chinese negotiators held phone talks on Tuesday and agreed to keep in touch over "remaining issues" for a "phase one" trade deal between the two countries, Chinese state media said. US President Donald Trump had announced last month that the two sides had reached an initial agreement, but the deal is yet to be finalised.
Chinese Vice Premier Liu He spoke on the phone Tuesday morning with US Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin, the official Xinhua news agency reported.
Compass Group said it delivered strong annual results as it raised its annual dividend.
For the financial year ended September 30, revenue rose 8.8% to GBP24.88 billion from GBP22.87 billion the year before, but pretax profit slipped 3.5% to GBP1.47 billion from GBP1.52 billion last year.
Operating profit slipped to GBP1.60 billion from GBP1.69 billion last year, but underlying operating profit came in at GBP1.88 billion, up from from GBP1.74 billion last year. The underlying figure was in line with the company-supplied consensus market expectation.
Compass reported annual organic revenue growth of 6.4%, accelerating from 5.5% last year. The figure was in line with consensus estimates.
Compass raised its annual dividend by 6.1% to 40 pence from 37.7 pence.
The company said its outlook for the new year remains strong and expects financial 2020 organic growth around the mid-point of a 4% to 6% guidance range.
"Our expectations for the group in 2020 are positive although we remain cautious on the macro environment in Europe. The pipeline of new contracts in North America is strong and Rest of World is growing well, although we are seeing some hesitation in decision making in Europe. Thanks to the group's geographic and sectoral diversity, we are nevertheless confident of continued progress," Chief Executive Officer Dominic Blakemore said.
Greencore said it delivered a resilient performance against the backdrop of a subdued UK trading environment and uncertainty over Brexit.
For the financial year ended September 30, revenue fell 3.5% to GBP1.44 billion from GBP1.50 billion, but pretax profit surged to GBP56.4 million from GBP17.8 million last year. Adjusted pretax profit rose 16% to GBP95.3 million from GBP79.6 million the year before.
The company proposed a total dividend of 6.20p, up 11% from 5.57p last year.
In terms of outlook, Greencore's medium-term financial goals are for mid single-digit organic revenue growth and high single-digit adjusted earnings per share growth.
"Over the past twelve months we have fundamentally reset our business, anchored by a clear strategy to drive shareholder value by expanding our category and channel capabilities within the diverse, growing and attractive UK food to go market. The evidence of this can be seen in the launch of multiple commercial and innovation projects with key customers, and in the recent acquisition of Freshtime. As a result of this reset strategy, we anticipate another year of profitable growth in 2020," said Chief Executive Officer Patrick Coveney.
The Japanese Nikkei 225 index closed up 0.4%. In China, the Shanghai Composite closed up 0.1%, but the Hang Seng index in Hong Kong is down 0.1%.
In the US on Monday, Wall Street ended at fresh highs, with the Dow Jones Industrial Average up 0.7%, S&P 500 up 0.8% and Nasdaq Composite up 1.3%.
US monetary policy is set to continue the good times for workers while nudging inflation back to where officials would like to see it, the US Federal Reserve chief said Monday.
The remarks from Federal Reserve Chair Jerome Powell underscored central bankers' view that they are likely to hold their fire for the coming months after cutting interest rates three times this year.
"Monetary policy is now well positioned to support a strong labour market and return inflation decisively to our symmetric 2% objective," Powell said in a speech to the Greater Providence Chamber of Commerce in Rhode Island.
The pound was quoted at USD1.2895 early Tuesday, down from USD1.2906 at the London equities close Monday.
Still in the economic calendar on Tuesday are UK mortgage approvals at 0930 GMT. In the US is the housing price index at 1355 GMT and consumer confidence at 1500 GMT.
By Arvind Bhunjun; [email protected]
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