3rd Jul 2018 07:43
LONDON (Alliance News) - Stock prices in London are seen opening higher ahead of UK construction PMI data at 0930 BST, while St Modwen Properties reported a fall in interim profit and UDG Healthcare made two US acquisitions.
IG futures indicate the FTSE 100 index is to open 33.15 points higher at 7,581.00. The blue chip index closed down 1.2% at 7,547.85 on Monday.
In early UK corporate news, property developer St Modwen Properties said it made a good start to 2018 and its expectations for the full year remain unchanged.
For the half year ending May 31, revenue came in at GBP211.9 million compared to GBP151.4 million the prior year but pretax profit slipped to GBP25.9 million from GBP31.6 million. In addition, net asset value rose to 455.4 pence compared to 450.9p last year. The group proposed an interim dividend of 3.10 pence up from 2.02p.
"The wider UK economic and political environment is still uncertain and likely to remain so for some time to come. Although we are of course exposed to any cyclicality in the wider UK economy, the structural growth fundamentals in our key areas of regional housebuilding and industrial/logistics, remain positive. This provides us with confidence as we accelerate our development activity, although the short-cycle nature of our projects does mean we have flexibility to adjust our pipeline to any sudden changes in demand," the company said.
UDG Healthcare said it acquired two US-based businesses for a total of USD82.4 million. The healthcare company acquired Create NYC, a creative communications agency and SmartAnalyst which is a strategic commercialisation consulting and analytics business. Both companies are based in New York and have a focus on the healthcare market.
Paragon Banking Group said it acquired residential development finance provider Titlestone Property Finance for GBP48 million and a portfolio of development finance loans for GBP226 million from a series of special purpose-vehicle companies. Titlestone and the SPV companies were owned by funds controlled by Oaktree Capital Management.
"This acquisition demonstrates our continued progress in diversifying the group's income streams into specialist lending markets. The UK development finance market represents an excellent long-term opportunity and Titlestone will enable us to accelerate our growth in this area," said Properties Chief Executive Nigel Terrington.
Elsewhere, Ofwat announced some changes to its 2019 price review methodology. The water regulator said water companies are now required to set proposals to share benefits with customers and will be required to explain dividend policies for 2020 to 2025. Utility companies will also have to explain performance-related pay for top level executives.
"The decisions some water companies have made on dividends, financial structures and top executive pay have damaged customer trust. We have looked in detail at the incentives we give water companies. Through the measures we've announced today, we are strengthening the incentive on companies to improve their performance for customers and cutting the rewards that come from financial engineering," said Ofwat CEO Rachel Fletcher.
In the US on Monday, Wall Street ended higher, with the Dow Jones Industrial Average up 0.2%, S&P 500 up 0.3% and Nasdaq Composite ending up 0.8%.
The Japanese Nikkei 225 index closed down 0.1%. In China, the Shanghai Composite is up 0.3%, while the Hang Seng index in Hong Kong is down 2.0%. Stock markets in Hong Kong resumed trading after being closed on Monday for a public holiday.
Sterling was firm against the dollar quoted at USD1.3141 early Tuesday ahead of the PMI reading, versus USD1.3124 at the London equities close on Monday.
The PMI reading is expected to come in at 52.5.
"Today's construction PMI for June is expected to remain subdued as the sector continues to absorb the aftershocks of the Carillion collapse in January, though the data has picked up since a fairly weak first quarter, with expectations of a repeat of the previous two months at 52.5, which would still be a significant improvement on how the sector fared at the beginning of the year," noted CMC Markets chief market analyst Michael Hewson.
In the economic events calendar there is eurozone producer prices and retail sales at 1000 BST and US factory orders at 1500 BST. On Tuesday, stock markets in the US will close early for the Independence Day public holiday and will remain closed until Thursday.
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