20th Nov 2018 07:42
LONDON (Alliance News) - Stock prices in London are seen opening lower following steep falls in the US overnight and in Asia amid renewed trade war concerns, but with easyJet leavening the mood somewhat. The discount airline substantially raised its dividend, after reporting a sharp rise in annual earnings, while fellow London blue-chip Compass delivered a rise in underlying revenue. IG futures indicate the FTSE 100 index is to open down 12.19 points at 6,988.70. The blue chip index closed down 0.2%, or 12.99 points at 7,000.89 Monday.easyJet expressed confidence that its strategy and positioning will deliver substantial value for shareholders as it reported a rise in annual earnings. For the financial year ended September 30, pretax profit surged more than 40% to GBP578 million from GBP405 million the year before and revenue rose 17% to GBP5.90 billion from GBP5.05 billion last year. In addition, passengers numbers were up 10% to 88.5 million from 80.2 million, while the load factor rose to 92.9% from 92.6%.The company lifted its total dividend 43% to 58.6 pence from 40.9p last year. "Our strategy continues to ensure we are well positioned for the future. We have made considerable progress on our new initiatives in holidays, business and loyalty, which will enable us to grow profitably. While disruption continues to be a major challenge for the industry, we are investing in resilience to help to mitigate the impact on our customers," said Chief Executive Johan Lundgren.Catering firm Compass Group said it had a strong year with healthy revenue growth, driven by an excellent performance in North America, an acceleration in Europe and good progress in Rest of World. For the financial year ended September 30, revenue increased 1.7% to GBP22.96 billion from GBP22.57 billion last year and operating profit rose to GBP1.69 billion from GBP1.67 billion. On an underlying basis, revenue rose 5.5% to GBP23.24 billion from GBP21.84 billion last year and operating profit was up 7.1% to GBP1.74 billion from GBP1.63 billion. The company-supplied consensus also had expected underlying profit of GBP1.74 billion.The company's underlying operating margin remained flat at 7.4%. Compass noted statutory basis earnings were lower than underlying results mainly due to the adverse foreign exchange movements during the year.Compass reported that annual underlying organic revenue growth was 5.5%, accelerating from 4.0% last year. This beat the company-supplied consensus estimate of 5.3%. The company raised its annual dividend 13% to 37.7p from 33.5p last year. "Our expectations for financial 2019 are positive. The pipeline of new contracts is strong and our focus on organic growth, efficiencies and cash gives us confidence in achieving another year of progress. We expect organic growth to be in the middle of our 4% to 6.0% range with modest margin progression. In the longer term, we remain excited about the significant structural growth opportunities globally, the potential for further revenue growth and margin improvement, combined with further returns to shareholders," said Compass CEO Dominic Blakemore.In the US on Monday, Wall Street ended sharply lower, with the Dow Jones Industrial Average down 1.6%, S&P 500 down 1.7% and the tech-heavy Nasdaq Composite down 3.0%. The Nasdaq fell to its lowest closing level in almost five months at 7,028.48. The sell-off on Wall Street came amid lingering concerns about the outlook for the global economy along with uncertainty about the potential for a trade deal between the US and China.At the Asia Pacific Economic Cooperation summit over the weekend, Vice President Mike Pence said the US would not back down until China changes its ways."Expectations of some form of trade détente at next week's G20 meeting between China and the US were knocked after US vice President Mike Pence was particularly critical of Chinese trade tactics," noted CMC Markets chief market analyst Michael Hewson.In addition, shares in Apple fell 4.0% after the Wall Street Journal said the company slashed production orders for all three of the iPhone models that were unveiled in September which also weighed on investor sentiment. The Japanese Nikkei 225 index closed down 1.1%. In China, the Shanghai Composite closed down 2.1%, while the Hang Seng index in Hong Kong is down 2.0%.The pound was firm quoted at USD1.2856 from USD1.2843 at the London equities close Monday.The economic events calendar on Tuesday has US housing starts at 1330 GMT. In addition, there are the UK Inflation Report Hearings from 1000 GMT, with Bank of England Governor, Mark Carney, as well as several MPC members, due to testify on inflation and the economic outlook before parliament's Treasury Select Committee.
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