7th Jul 2020 07:45
(Alliance News) - Stock prices in London are seen opening lower on Tuesday as investors try to balance the reopening of economies with worries about Covid-19 as it continues its spread across the globe.
IG futures indicate the FTSE 100 index is to open 15.14 points lower at 6,270.80. The blue-chip index closed up 128.64 points, or 2.1%, at 6,285.94 on Monday.
JD Sports Fashion reported a rise in annual earnings, but the sportswear retailer cut its dividend and warned the coronavirus outbreak has constrained its short term progress.
For the 52 weeks ended February 1, the company's revenue increased 30% to GBP6.11 billion from GBP4.72 billion the year before. Pretax profit edged higher to GBP348.5 million from GBP339.9 million.
For financial 2020, JD Sports said like-for-like sales were up 12% on an annual basis, with the core UK & Ireland sales up 10%.
However, JD Sports cut its total dividend to 0.28 pence from 1.71p the year before. In April, JD had said it does not intend to pay a final dividend due to the pandemic.
JD Sports warned Covid-19 continues to affect its commercial operations and will have a material impact on the results for financial 2021. It noted stores began to re-open in some countries from the end of April with the majority of the group's stores now trading again. Initial footfall has been weaker in malls and shopping centres, particularly in Northern Europe at weekends, as consumers remain nervous about the risks associated with densely occupied enclosed spaces, the company added.
"We were encouraged by the continued positive trading in the early weeks of the year prior to the emergence of Covid-19 and we firmly believe that we are well placed to regain our previous momentum. Looking longer term, there is inevitably considerable uncertainty as to what the effect of Covid-19 will be on consumer behaviour and footfall with future store investments highly dependent on rental realism and lease flexibility. Ultimately, however, we remain confident that we have a market leading multi-channel proposition which has the necessary flexibility and agility to prosper within a retail environment that may see profound and permanent structural change," said Chair Peter Cowgill.
Whitbread said it is well placed to capitalise on enhanced structural opportunities with its Premier Inn hotel and restaurant reopening now fully underway.
The hospitality firm said over 270 UK hotels and 24 restaurants now reopened with the majority of the rest of the estate due to reopen throughout July. In addition, all 19 operational hotels now open in Germany, including 13 new hotels that were refurbished and rebranded as Premier Inn during lockdown.
For the first quarter ended May 28, group like-for-like sales fell 80% and total sales were down 79%.
Whitbread said the first-quarter performance reflects the impact of the closure of its hotel and restaurant operations, in both the UK and Germany, at the end of March.
"It is still very early days and therefore too early to draw any conclusions from our booking trajectory, especially as there has been volatility in hotel performance in other countries that relaxed controls before the UK. However, in traditional regional tourist destinations, we are seeing good demand for the summer months, whilst the rest of the regions and metropolitan areas, including London, remain subdued," Chief Executive Alison Brittain said.
Online trading platform Plus500 said it has appointed interim Chief Executive Officer David Zruia to the role on a permanent basis. He was appointed interim CEO in April having been chief operating officer since 2013.
Plus500 said it expects revenue of about USD564.2 million for the six months to June 30, up from USD148.0 million the year before. It gained 198,176 new customers in the first half, up from 47,540 the year before.
"The company's financial position remains robust, driven by the strong earnings before interest, tax, depreciation and amortisation margin achieved during the period and continued high cash generation, as well as the minimal capital expenditure requirements and the low capital intensity of the business. Despite a background of on-going uncertainty regarding the duration of current levels of volatility, and the unquantified potential impact from regulatory changes in Australia, the board remains very confident about the outlook for the company," Plus500 said.
The Japanese Nikkei 225 index closed down 0.5%. In China, the Shanghai Composite is up 1.8%, while the Hang Seng index in Hong Kong is down 0.3%.
In the US on Monday, Wall Street ended higher, with the Dow Jones Industrial Average up 1.8%, S&P 500 up 1.6% and Nasdaq Composite up 2.2%.
While several countries are suffering a fresh surge in infections - particularly the US - the ongoing easing of lockdown measures and reopening of economies has been the key driver of a months-long surge across equities. After the latest advances, which saw Shanghai hit a two-year high and the Nasdaq on Wall Street end at another record, investors stepped back.
The US is still "knee-deep" in its first wave of coronavirus infections and must act immediately to tackle the recent surge, the country's top infectious diseases expert said Monday.
Anthony Fauci said the number of cases had never reached a satisfactory baseline before the current resurgence, which officials have warned risks overwhelming hospitals in the country's south and west. The death toll from the virus in the US hit 130,000 Monday, according to a tally by Johns Hopkins University, and the number of infections is nearing three million.
The pound was quoted at USD1.2502 early Tuesday, up from USD1.2492 late Monday.
The EU's chief Brexit negotiator Michel Barnier will travel to London on Tuesday for talks with his UK counterpart David Frost.
Last week, discussions between the two sides on a post-Brexit trade deal broke up early with "significant differences" remaining.
But Barnier and Frost will meet face-to-face in London on Tuesday, before talks with the rest of their teams on Wednesday.
The UK's Chief Negotiator Frost said last week that though the ability to meet in person had given "extra depth and flexibility" to the discussions, there was more to do. Barnier said that while Brussels had engaged "constructively", officials needed to see an "equivalent engagement from the UK side".
The euro was quoted at USD1.1306, marginally lower from USD1.1312. Against the yen, the dollar was quoted at JPY107.47, flat from JPY107.49.
Brent oil was quoted at USD42.81 a barrel Tuesday morning, down from USD43.43 late Monday. Gold was quoted at USD1,782.28 an ounce, flat from USD1,784.81
By Arvind Bhunjun; [email protected]
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