17th Oct 2018 07:43
LONDON (Alliance News) - Stock prices in London are seen opening higher following strong gains in the US and Japan overnight, while housebuilder Crest Nicholson's chief financial officer stepped down as it issued a profit warning. IG futures indicate the FTSE 100 index is to open 22.80 points higher at 7,082.20. The blue chip index closed up 0.4%, or 30.18 points at 7,059.40 on Tuesday.The Japanese Nikkei 225 index is up 1.3%. In China, the Shanghai Composite is down 0.8%. Hong Kong is closed for the Chung Yeung Festival.In the US on Tuesday, Wall Street ended significantly higher, with the Dow Jones Industrial Average up 2.2%, S&P 500 up 2.2% and Nasdaq Composite up 2.9%.US stocks surged to their biggest gain in six months amid positive earnings releases from big name firms such as Goldman Sachs, Morgan Stanley and Johnson & Johnson.In early UK corporate news, online fashion retailer ASOS said it saw a substantial year of progress as it delivered a strong trading performance.For the financial year to the end of August, pretax profit rose 28% to GBP102 million from GBP80 million the year before, as revenue increased 26% to GBP2.41 billion from GBP1.92 billion. Retail sales at group level was up 26% to GBP2.36 billion from GBP1.88 billion, with strong contributions both domestically in the UK and overseas. ASOS left its 2019 reported sales growth guidance unchanged at 20% to 25%, It also kept it guidance for earnings before interest and tax margin at 4%."This has been another year of substantial progress for ASOS. We delivered 26% sales growth and 28% profit growth whilst investing heavily in the long term potential of the business. Our reported profit increase was achieved despite bearing material transition costs due to our investment programme. All our financial and customer key metrics have shown positive growth. Our guidance remains unchanged both for the current year and the medium term, despite our record levels of investment," Chief Executive Nick Beighton said. Crest Nicholson said Chief Financial Officer Robert Allen is stepping down and leaving the company, as the housebuilder warned on profit amid challenging trading conditions.FTSE 250-listed Crest Nicholson said sales have not risen during the traditionally stronger early Autumn selling season, with the market environment for new homes in London is more difficult than previously anticipated.As such, Crest Nicholson now expects annual pretax profit within a range of GBP170 million to GBP190 million. Crest Nicholson said by keeping up sales volumes its margin have been hurt, and is now expected to be lower than the previous guidance of 18%.To combat this, the company is launching a new strategy that will focus on shareholder returns by prioritising cashflow and dividends, maximising value in its portfolio and improving operational efficiency.Still, the company remains committed to pay an ordinary dividend of 33 pence for financial 2018. It committed the same for financial 2019, subject to no material deterioration in market conditions.Pearson said it remains on track to meet full-year expectations as it left its 2018 adjusted operating profit guidance unchanged. The education publisher said total annual revenue was flat with declines in US Higher Education Courseware offset by growth in the rest of the company.Pearson said it expects adjusted operating profit in 2018 to be in the range of GBP520 million to GBP560 million and is also on track to deliver GBP300 million in annualised cost savings from end 2019 onwards. "We are on track to return to underlying profit growth and, with a strong balance sheet, are set up well for the future. We are picking up the pace in our growth opportunities, performing well competitively and making good progress in our digital transformation. There's a lot still to do but we are increasingly excited about the opportunity to help learners acquire the knowledge and skills to succeed in a fast changing world," said CEO John Fallon. BHP Billiton reduced guidance for copper production in its current financial year, due to expected lower volumes, despite reporting an increase in the first quarter.Copper production for the three months to the end of September rose by 1.0% to 409,000 tonnes, due to higher volumes at the Escondida mine in Chile.However, due to the impact of a fire at Spence in Chile, and an acid plant outage at Olympic Dam in Australia, full-year production guidance has been lowered to 1.62 to 1.71 million tonnes from 1.67 to 1.77 million tonnes. In addition, investors will be keeping watch over the European Council summit for potential developments over whether an exit deal can be struck by negotiators.UK Prime Minister Theresa May is to address EU leaders as she battles to keep her faltering hopes of securing a Brexit deal alive.May heads to Brussels for what had been billed as "the moment of truth" in the negotiations amid growing concerns the two sides will be unable to bridge the gap over the key issue of the Irish border.The meeting is the occasion when the leaders of the remaining 27 member states were supposed to give the green light for a special summit in November to finalise the terms of Britain's withdrawal.But after hastily arranged talks between the EU's chief negotiator Michel Barnier and Brexit Secretary Dominic Raab broke up on Sunday without agreement, the negotiations are once again deadlocked.European Council president Donald Tusk has warned that without new "concrete proposals" from the British to break the logjam over the so-called Irish border "backstop", further progress may be impossible.Sterling was down quoted at USD1.317 ahead of UK inflation readings due at 0930 BST, from USD1.3207 at the London equities close on Tuesday.The economic events calendar on Wednesday also has eurozone inflation readings at 1000 BST. There are US housing starts figures at 1330 BST.Bank of England policymaker Ben Broadbent will speak at the Brookings Institute in Washington, DC at 1800 BST. The Federal Open Market Committee's September meeting minutes will be released at 1900 BST.In US corporate news later aluminium producer Alcoa and equipment rentals firm United Rentals will report earnings after the market close in New York.Elsewhere, US President Donald Trump says the biggest threat to his presidency is the policy on interest rates set by the Federal Reserve, the US central bank."My biggest threat is the Fed," Trump said in an interview that aired Tuesday evening on Fox Business Network. He complained that the Fed "is raising rates too fast, and it's too independent".The Fed has hiked rates three times this year and is expected to put the federal funds rate up another notch in December in line with a course set last year. Additional rate increases are forecast for 2019 and 2020.Related Shares:
PearsonCrest NicholsonASOS