4th Dec 2018 07:40
LONDON (Alliance News) - Stock prices in London are seen opening marginally lower on Tuesday, tracking a sharp fall in Tokyo, as investor euphoria over the trade war truce between the US and China fades.In early UK corporate news, sandwich maker Greencore said it will return cash to shareholders following the sale of its US business, and plumbing-supplies firm Ferguson - which is more focused on the US than ever - said it made a positive start to its financial year.IG futures indicate the FTSE 100 index will open down 9.61 points at 7,052.80. The blue chip index closed up 82.17 points, or 1.2%, at 7,062.41 on Monday.Greencore Group said it would focus on the significant growth opportunities in the UK following its exit from the US and was confident in its prospects despite Brexit uncertainty. For the financial year ended September 28, revenue rose 4.2% to GBP1.50 billion from GBP1.44 billion last year, and pretax profit grew 13% to GBP17.8 million from GBP15.8 million last year. Operating profit was up 9.5% to GBP49.8 million from GBP45.5 million. Last month, Greencore completed the sale of its entire US business to Hearthside Food Solutions for USD1.08 billion. The company said Tuesday that following the sale, it is committed to returning GBP509 million to shareholders via a tender offer. The capital return is expected to be completed during the second quarter of financial 2019.Greencore also proposed a total dividend of 5.57p, up 1.8% from 5.47p last year. "The group anticipates continued underlying revenue growth in its key convenience food categories. Adjusted operating profit growth will be driven by this revenue growth, improved operational performance, and by a planned review of central overheads. Although the group believes the risks from Brexit are manageable in the medium-term, the near-term challenges associated with a 'no withdrawal agreement' are uncertain. A strengthened balance sheet and strong underlying free cash generation leaves the group well positioned to consider organic and inorganic investment consistent with its strategic and returns objectives," Greencore said. Plumbing and heating products supplier Ferguson said it continued to perform well in the first quarter of its financial year, supported by a strong performance in the US.For the three months to October 31, revenue increased 8.5% to USD5.55 billion from USD5.12 billion in the first quarter last year. Trading profit was up 9.9% to USD432 million from USD393 million the year before. In the US, revenue was up 12% to USD4.61 billion from USD4.11 billion last year. In the UK, revenue fell 9.5% to USD607 million from USD679 million last year due to closed branches and the exit of low-margin business."Since the end of the quarter, the US has continued to grow well, and the current indications are that growth will continue in the months ahead. As a result, we expect trading profit for the full year to be in line with analysts' expectations," Ferguson said. Asian stock markets were mixed Tuesday despite the strong overnight gain on Wall Street as doubts surfaced over whether the world's two largest economies will be able to resolve their differences in the 90-day truce period.US President Donald Trump and Chinese President Xi Jinping met at the G20 summit in Buenos Aires and agreed to a 90-day truce in their trade war to allow time for negotiations between the world's two biggest economies.The Japanese Nikkei 225 index closed down 2.4% on Tuesday. In China, the Shanghai Composite closed up 0.4%, while the Hang Seng index in Hong Kong is down 0.3%.Japanese shares fell sharply with export-linked issues dragged down by a stronger yen and investors selling stocks to lock in profits following recent gains.The pound was flat quoted at USD1.2732 from USD1.2740 at the London equities close Monday.In early economic news, a record GBP1 in every GBP3 of non-food purchases in the UK were made online in November, according to a report.But aggressive promotional activity by retailers ahead of Black Friday failed to lure shoppers, with like-for-like sales in November decreasing by 0.5% on last year, the British Retail Consortium-KPMG retail sales monitor found.Those behind the report said UK retailers now face a "nerve-wracking" run-up to Christmas. The report said the proportion of non-food purchases taking place online increased to 33.8% in November - an all-time high.In political news, UK Prime Minister Theresa May will plead with MPs to back her Brexit deal as her government was embroiled in a constitutional row with Parliament.May will begin five days of Commons debate on her Brexit plan before a major test of her authority in a crunch vote on Tuesday next week.But before she even addresses MPs her government will come in for intense criticism over claims it is in contempt of Parliament by refusing to publish the full legal guidance given to ministers about the Withdrawal Agreement and Political Declaration negotiated with the EU.Commons Speaker John Bercow said there had been an "arguable case that a contempt has been committed" and ruled MPs should debate the issue on Tuesday.The economic events calendar on Tuesday UK construction PMI at 0930 GMT and eurozone producer prices at 1000 GMT.In addition, Bank of England Governor Mark Carney, alongside deputies Ben Broadbent, Jon Cunliffe and Sam Woods will appear before the UK Treasury select committee at 0915 GMT in response to the central bank's Brexit analysis.
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