13th Dec 2018 07:42
LONDON (Alliance News) - Stocks in London are set to open slightly higher on Thursday following strong trading in the US and Asia overnight. The pound remained above the USD1.26 level but eased off some earlier gains after UK Prime Minister Theresa May saw down a vote of no confidence amongst members of Parliament from her party.In early company news, TUI raised its dividend with annual earnings in line with guidance, Sports Direct International warned it faces challenges turning around recent acquisition House of Fraser, and Serco said it expects annual earnings per share to beat consensus views. IG says futures indicate the FTSE 100 index of large-caps to open 8.51 points higher at 6,888.70 on Thursday. The FTSE 100 closed up 73.25 points, or 1.1%, at 6,880.19 on Wednesday.Travel firm TUI said it delivered a "very good" financial year as it lifted its dividend, with underlying earnings in line with guidance.Revenue for the year to September 30, excluding discontinued operations, grew 5.3% to EUR19.52 billion. Underlying earnings before interest, taxes and amortisation grew 4.1% to EUR1.15 billion. At constant currency, underlying Ebita rose 11% to EUR1.22 billion, just ahead of guidance. Pretax profit fell 10% to EUR971.5 million.The company proposed a dividend of EUR0.72, up from EUR0.65 last year. For financial year 2019, TUI said it expects to deliver underlying earnings growth of at least 10% in a "challenging market environment". Current trading for Winter 2019/19, as at December 2, was running just below the prior year's levels, with bookings down 1% and the average selling price 2% lower. Online grocer Ocado said it saw a "good finish" to its financial year, with Retail revenue growth in line with guidance.Retail revenue for the 13 weeks to December 2 grew 12%, with averages orders per week up 13% but the average order size falling 1.0%. The company said its automated warehouses in Andover and Erith continue to perform well, with Erith now processing over 30,000 orders per week as it ramps up in line with forecasts."Our unrelenting focus on delivering consistent high levels of service and value to our customers in the UK has produced another quarter of satisfying growth...Although in many respects 2018 has been a transformative year for Ocado, the story has only just begun. We look forward to the coming year," said Chief Executive Tim Steiner.Bunzl said revenue for 2018 is expected to rise by between 8% to 9% at constant exchange rates due to organic growth of more than 4%. Currency translation movements are expected to reduce constant exchange revenue growth by between 3% and 4%.The distribution firm also said it has recently acquired CM Supply, a foodservice distributor based in Denmark expected to record about GBP4 million in revenue this year. Sports Direct said revenue for its first half grew, though warned its acquisition of House of Fraser will see annual earnings lower than last year. Revenue for the half-year to October 28 grew 4.5% to GBP1.79 billion, though excluding acquisitions, and on a currency neutral basis, revenue increased by 0.2%. Pretax profit jumped 62% to GBP74.4 million. On an underlying basis, pretax profit fell 27% to GBP64.4 million.The rise in reported pretax profit came as investment costs fell to GBP4.8 million from GBP32.7 million last year, and finance costs reduced to GBP19.3 million from GBP40.9 million. "During the reporting period we acquired the trade and assets of House of Fraser, and I would like to welcome my new colleagues to the Sports Direct Group. I have made my views clear that I believe the previous House of Fraser senior management team traded the business whilst it was insolvent for a long time, this means we have significant challenges ahead in turning House of Fraser around," said Chief Executive Mike Ashley. He added, however, that he "genuinely" believes Sports Direct has acquired "a fantastic opportunity". Excluding House of Fraser, Sports Direct expects to deliver annual underlying earnings before interest, taxes, depreciation and amortisation growth in a range of 5% to 15%. Including House of Fraser, the company expects to be behind last year's result. Outsourcer Serco said its underlying trading profit is expected to grow between 30% to 40% in 2018, in line with September's upwardly revised guidance, with underlying earnings per share for both 2018 and 2019 expected to be a further 5% to 10% ahead of current consensus due to a lower effective tax rate. "With revenues no longer reducing, cash generation turning positive and the benefit of a strong balance sheet, we are pleased with progress, and we expect further improvement in 2019. We expect to deliver another year of strong order intake in 2018, driven in particular by our international businesses, and our operations and transformation plans continue to deliver an organisation which is leaner, fitter and much stronger," said Serco Chief Executive Rupert Soames.Personal care products maker PZ Cussons said it has continued to see good trading in Europe and Asia over its first-half, but conditions in Nigeria remain challenging. The Imperial Leather soap maker said it expects trading conditions in Nigeria to remain subdued, and it is actively managing and reviewing the portfolio to ensure that short-term volatility is mitigated. "We expect the consumer to remain under pressure in all of the markets in which we operate. Despite this, our unrelenting focus on continued product innovation and further expansion of our distribution are expected to underpin continuing good performance in Europe and Asia," said PZ Cussons. The company added that its annual result will, as in prior years, depend in part on the macro environment in Nigeria during the seasonally important second half of the year.UK Prime Minister May heads to Brussels on Thursday seeking fresh concessions for her Brexit deal after emerging from a confidence vote by Tory MPs bloodied and bruised but victorious.The prime minister will address EU leaders at the two-day European Council after seeing off rebels who attempted to remove her from the party leadership, winning by 200 votes to 117 in a secret ballot.After a day of drama in Westminster, she will travel to the Belgian capital still faced with the same dilemma she faced before it all took place: how to convince the EU to tweak the Withdrawal Agreement so that it will be passed by Parliament."The prime minister has survived the vote of no confidence in her leadership, though this in reality changes little. The vote, 200-117, was not a thumping result for the PM, and while it means she remains in place, it is clear that her authority has suffered a blow," said IG chief market analyst Chris Beauchamp.He added: "The pound had already rallied in expectation of the result, so the drop back from the highs is not surprising. But now the focus for sterling goes back to Brexit, and there the outlook is not at all promising."Sterling was quoted at USD1.2631 early Thursday, lower than USD1.2655 at the London equities close on Wednesday but up from the 18-month low of USD1.2476 hit earlier on Wednesday as news first broker that the confidence vote had been triggered.In the US on Wednesday, the Dow Jones Industrial Average closed up 0.6%, the S&P 500 up 0.5%, and the Nasdaq Composite up 1.0% higher. In Asia on Thursday, the Japanese Nikkei 225 index ended up 1.0%. In China, the Shanghai Composite closed up 1.2%, while the Hang Seng index in Hong Kong is up 1.1%.The economic events calendar on Thursday has Germany inflation data at 0700 GMT and US import and export price index readings at 1330 GMT. Headlining the day is the last monetary policy decision from the European Central Bank, due at 1245 GMT, followed by a press conference with ECB President Mario Draghi at 1330 GMT. The central bank is expected to confirm the end of its bond-buying programme as well as tweak its growth forecasts for 2018 and the coming years lower, though interest rate guidance is expected to remain unchanged.
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OcadoSercoBunzlSports DirectTUI.LPz Cussons