5th Apr 2022 07:50
(Alliance News) - Stocks in London are seen opening lower on Tuesday, with traders still mindful of the possibility of more sanctions being imposed on Russia in the wake of international outrage following killings in the Ukrainian town of Bucha.
"In the wake of 'Russian atrocities' claims and the ensuing public outrage, there is a strong chance we could see another layer of sanctions on Russian energy," SPI Asset Management analyst Stephen Innes commented.
In early UK company news, home emergency cover provider Homeserve said it made good progress during the financial year. Greeting card retailer Moonpig Group said it was confident in its annal prospects. Transport operator Go-Ahead reinstated dividends.
IG futures indicate the FTSE 100 index is to open 18.0 points lower, or 0.2%, at 7,540.92. The index closed up 21.02 points, or 0.3%, at 7,558.92 on Monday.
Homeserve said it made good progress in financial 2022, both strategically and financially, delivering an acceleration in performance compared to 2021, in line with expectations.
The home repairs and improvements firm said the Membership business continued to show resilience and value to homeowners in times of economic uncertainty, with customer satisfaction remaining high and global policy retention at 84% compared to 83% the year before.
Further, Homeserve said there was good strategic progress in each of its three business divisions, with new products gaining traction in North America; good progress in building three complementary businesses in EMEA - Membership, HVAC and Claims Assistance; and progress in Home Experts.
In addition, Homeserve said its Home Experts division was profitable for the first time on a full year basis, predominantly thanks to progress at its Checkatrade business.
Checkatrade ended the financial year with 47,000 paying trades, up from 44,000 the year before, and average revenue per trade is expected to exceed the milestone 1 target of GBP1,200, compared to GBP939 last year.
Online greetings card retailer Moonpig Group said its performance for the financial year to April 30 has remained strong.
Moonpig expects annual revenue to be around GBP300 million, with the upgrade reflecting the temporary impact of Covid-19 on customer behaviour in late December and January. Its expectations for underlying revenue in financial 2022 remain unchanged at approximately GBP265 million.
Further, it said trading in February and March has provided further evidence that supports expectations of a "permanent uplift in customer cohort frequency" compared to before Covid-19.
Accordingly, Moonpig remains confident in existing expectations for the next financial year. It reiterated a medium-term target for an adjusted earnings before interest, tax, depreciation, and amortisation margin of approximately 24% to 25%.
Chief Executive Officer Nickyl Raithatha said: "Today's update reflects continued strong trading performance post-lockdowns, including a very successful UK Mothers' Day, and we remain confident in the outlook for the year ahead. Moonpig Group has delivered a permanent step change in scale over the past two years, with a larger customer base displaying higher loyalty than pre-pandemic. The long-term opportunity remains vast, and we have never been in a better position to deliver against Moonpig Group's strategy to become the ultimate gifting companion."
Crest Nicholson Holdings confirmed its intention to sign the Building Safety Pledge, which it believes is in the best interests of the company.
The Building Safety Pledge programme was established by the UK government in the wake of the Grenfell Tower fire in 2017 to make sure that residents of high-rise buildings are safe by removing combustible materials.
The housebuilder said it would be taking further steps to support those living in affected buildings. As a result of making these new commitments, it said it would need to record a further exceptional charge in its financial statements.
"This is a complex and judgemental area, and the group will continue to work at speed to refine its latest estimate of these costs," it explained.
As such, Crest said it considers that a charge in the range of GBP80 million to GBP120 million currently represents its best estimate of this further liability.
Crest also said it had a strong balance sheet with net cash of GBP252.8 million at October-end.
"The cash outflows required to remediate the affected buildings will occur over several years. Given the group's well capitalised financial position and strong current trading performance," it added.
Go-Ahead Group said following conclusions of a business review it will reinstate its pre-Covid dividend policy. It will pay a dividend to shareholders equivalent to between 50% and 75% of underlying earnings per share from financial 2022.
Further, it said the board intends to recommend a dividend of not less than 50p in respect of the year ending July 2, 2022 in line with this policy.
Go-Ahead also set new medium-term targets to increase annual revenue to around GBP4 billion, up by around 30%, and operating profit to at least GBP150 million.
In the US on Monday, the Dow Jones Industrial Average closed up 0.3%, the S&P 500 added 0.8% and the Nasdaq Composite rose 1.9%.
US President Joe Biden called Monday for a "war crimes trial" over alleged atrocities in Bucha and vowed tougher sanctions against Moscow, as Ukraine's leader urged the world to acknowledge a "genocide" by Russian troops near Kyiv.
Western leaders have united in outrage after dozens of bodies were found on the streets and in mass graves when Russian troops retreated from the devastated town near the capital, laying bare the horrors of a 40-day war that has killed thousands.
Biden did not hesitate to call out Russian President Vladimir Putin over the killings.
"He is a war criminal," Biden told reporters at the White House.
"The receptiveness on the part of Europe (including Germany) to refrain from importing Russian gas has put a bid under and should keep energy prices supported," SPI's Innes added.
Oil prices were higher on Tuesday morning as traders eyed further Russia sanctions. Brent was quoted at USD109.26 a barrel, up from USD107.45 late Monday.
Gold stood at USD1,931.33 an ounce, firm from USD1,930.80 late Monday.
The dollar was mixed early Tuesday.
Against the dollar, the pound rose slightly to USD1.3123 early Tuesday in London from USD1.3121 late Monday. The euro was priced at USD1.0966, down from USD1.0996. Against the yen, the dollar was trading at JPY122.55, down from JPY122.70.
Japan's services economy contracted at a slower pace in March, figures on Tuesday showed, while the wider private sector returned to growth for the first time in three months.
The latest au Jibun Bank services purchasing managers' index rose to 49.4 points in March, from 44.2 in February. March's figure moved closer to the 50.0 no change mark, suggesting services activity has declined at a slower pace.
The composite PMI, a weighted average of the services and earlier manufacturing reading, rose to 50.3 points in March, from 45.8 in February.
Financial markets in mainland China and Hong Kong were closed on Tuesday to mark Tomb Sweeping Day. The Nikkei 225 in Tokyo and the S&P/ASX 200 in Sydney both finished 0.2% higher.
Australia's central bank on Tuesday left its key interest rate unchanged, but noted inflationary pressures have picked up recently.
The Reserve Bank of Australia kept its cash rate target at 0.1%, as expected. The RBA, however, noted that bets on future rate hikes have picked up recently, following Russia's invasion of Ukraine.
Still to come in the international economics events calendar on Tuesday are a slew of services PMI data, including the eurozone at 0900 BST and the UK at 0930 BST before the US print in the afternoon.
By Arvind Bhunjun; [email protected]
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