15th Apr 2021 07:53
(Alliance News) - Stock prices in London are seen opening flat on Thursday following weakness in some Asian equity markets, while earnings season in the US continues following blowout profit reports from Goldman Sachs and JPMorgan Chase.
In early UK company news, gambling firm Entain's first quarter was hindered by lockdown restrictions and the Hut Group owner THG said it was entering 2021 with confidence after a "monumental" 2020. Takeaway platform Deliveroo gave its maiden trading update as a listed company, with orders and transaction values rising strongly.
IG futures indicate the FTSE 100 index is to open 4.02 points higher at 6,943.60. The blue-chip index closed up 49.09 points, or 0.7%, at 6,939.58 Wednesday.
Entain said it delivered a strong first-quarter performance, continuing the momentum seen at the end of 2020 and in line with expectations.
For the quarter ended March 31, online net gaming revenue rose 33% to mark Entain's 21st consecutive quarter of double-digit Online NGR growth.
However, Retail NGR fell 99% during the three months, as betting shops were closed due to lockdown restrictions. Entain owns the Ladbrokes and Coral high-street chains in the UK. Total group NGR was down 13%.
"With some easing of Covid restrictions, we are delighted to be welcoming customers back into our shops. While it has only been a handful of days since the re-opening in parts of the UK on the 12 April, we look forward to returning to more normal trading across our whole business," said Chief Executive Officer Jette Nygaard-Andersen.
"In line with our expectations, the momentum from the end of 2020 has carried into 2021. Although Covid creates some near-term uncertainty, by maintaining our focus on the customer, providing them with great products and services, we remain confident and excited in our long-term prospects," Jette Nygaard-Andersen added.
Deliveroo said that, during the first quarter, growth accelerated, with progress in the UK driven by lockdown restrictions, which saw restaurants open for takeaway services only.
For the three months to March 31, total orders rose 114% on a year before to 71 million, while gross transaction value was GBP1.65 billion, up 130%.
Orders in the UK and Ireland were up 121% to 34 million, while International orders were up 108% to 37 million at the same time last year.
Gross transaction value in UKI was up 142% to GBP852 million, and International GTV was up 119% to GBP794 million year-on-year.
Deliveroo's monthly active consumer base has grown 91% year-on-year to 7.1 million monthly active consumers on average in the quarter.
Defending itself against criticism of how it treats its delivery team, Deliveroo said it works with over 100,000 riders globally. In the UK, rider satisfaction is "at an all time high of 89%" as of the end of the quarter.
Deliveroo also said it works with over 117,000 restaurants as of the end of the period, and continues to increase the availability and choice to consumers on a neighbourhood by neighbourhood basis.
Looking ahead, Deliveroo said it expects its rate of growth to decelerate as lockdowns ease, but the extent of the deceleration remains uncertain. It expects annual GTV growth of between 30% to 40% and gross profit margins of 7.5% to 8.0%.
"Demand has been strong in both the UK&I and International markets driven by record new consumer growth and sustained engagement from our existing consumers. This is our fourth consecutive quarter of accelerating growth, but we are mindful of the uncertain impact of the lifting of COVID-19 restrictions. So while we are confident that our value proposition will continue to attract consumers, restaurants, grocers and riders throughout 2021, we are taking a prudent approach to our full year guidance," said Founder & Chief Executive Officer Will Shu.
Meanwhile, THG said 2020 was a "monumental" first year as a publicly listed company when it listed in September with a market value of GBP5.40 billion.
THG reported 2020 revenue of GBP1.6 billion, up 46% from GBP1.1 billion in 2019 but its pretax loss widened to GBP534.6 million from GBP45.2 million.
THG incurred an operating loss in the year of GBP482 million, driven by events that have resulted in cash outflows and non-cash charges, the largest of which related to the vesting of share option schemes after the strong share price growth experienced post admission, it explained.
THG said that, following a strong end to 2020, sales momentum has continued into 2021 across all divisions, revenue growth for the first-quarter of 58.2%, with stable margins in line with guidance. THG reiterated its recently upgraded 2021 revenue growth guidance of 30% to 35%.
The Japanese Nikkei 225 index ended up 0.1% on Thursday. In China, the Shanghai Composite was down 0.9%, while the Hang Seng index in Hong Kong was down 0.8%. The S&P/ASX 200 in Sydney ended up 0.6%.
The underwhelming performance in Asia followed a tepid lead from Wall Street, where only the Dow Industrials managed to eke out a gain despite a healthy start to the much-anticipated first-quarter earnings season.
The Dow Jones Industrial Average closed up 0.1% on Wednesday, the S&P 500 index down 0.4%, and Nasdaq Composite down 1.0%.
"Today's European open looks set to be a mixed affair following in the footsteps of Asia markets which are being held back by weakness in Chinese markets," said CMC Markets analyst Michael Hewson.
Meanwhile, Britain and the EU are mounting a fresh attempt to resolve the problems over post-Brexit trading arrangements for Northern Ireland.
Brexit minister David Frost is travelling to Brussels for talks with European Commission vice-president Maros Sefcovic as they attempt to iron out differences over the Northern Ireland Protcol in Boris Johnson's Withdrawal Agreement.
The protocol has been blamed as one of the factors behind the recent upsurge of violence in loyalist areas amid concerns in those communities it has weakened their place in the UK. Under the terms, goods moving from the rest of the UK to Northern Ireland may be subject to checks.
The measures are intended to protect the EU single market while maintaining an open land border between the North and the Republic in line with the Good Friday peace process.
The pound was quoted at USD1.3776 early Thursday, down from USD1.3793 at the London equities close on Wednesday.
The euro was priced at USD1.1973, flat from USD1.1975. Against the Japanese yen, the dollar was quoted at JPY108.88, down from JPY108.96.
Brent oil was trading at USD66.73 a barrel Thursday morning, higher than USD66.32 late Wednesday. Gold was trading at USD1,740.65 an ounce, up from USD1,736.27.
Thursday's economic calendar has the latest US jobless claims reading and US retail sales data at 1330 BST.
The US earnings calendar has first-quarter results from major banks Bank of America and Citigroup and from asset manager BlackRock.
By Arvind Bhunjun; [email protected]
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