10th Dec 2019 07:45
(Alliance News) - Stock prices in London are seen opening flat on Tuesday, with the US Federal Reserve's last policy-making meeting of the year getting under way later in the day.
In company news, troubled fashion retailer Ted Baker suspended its dividend and announced the immediate departure of its executive chair and chief executive. Equipment rental firm Ashtead Group reported solid first-half earnings, and energy provider SSE welcomed the UK regulator's decision to approve the sale of its retail arm.
IG futures indicate the FTSE 100 index is to open 0.10 of a point higher at 7,234.00. The blue-chip index closed down 5.76 points, or 0.1%, at 7,233.90 Monday.
Ashtead Group reported a rise in interim earnings supported by another strong performance from its North American business.
For the half year ended October 31, revenue rose 19% to GBP2.68 billion from GBP2.25 billion last year, and pretax profit was up 8.2% to GBP675 million from GBP610 million the year before.
In the US, where the company generates a bulk of its earnings from its Sunbelt unit, revenue came in at USD2.89 billion, up from USD2.50 billion last year.
Ashtead raised its interim dividend 10% to 7.15 pence from 6.50p last year.
"Our business continues to perform well in supportive North American end markets, while we have taken decisive strategic action to refocus our UK business in the challenging market conditions. Thus, except for the UK and a currency headwind, we expect results to be in line with our expectations and the Board continues to look to the medium term with confidence," Chief Executive Officer Brendan Hogan said.
Just Eat rejected the revised 740 pence per share takeover offer from Prosus saying it "significantly undervalues" the company. The board of Just Eat unanimously recommended that Just Eat Shareholders accept the offer from Takeaway.com.
"Just Eat is a leading, strategic asset in the food delivery sector and the board of Just Eat continues to believe that the Prosus offer fails to reflect appropriately the quality of Just Eat and its attractive assets and prospects, the benefits of first mover advantage in a consolidating sector, and, on the basis of its own analysis, the future upside available to Just Eat shareholders through remaining invested in Just Eat and the Takeaway.com combination," Just Eat said.
Ted Baker downgraded its annual pretax profit guidance to a minimum GBP5 million and a maximum of GBP10 million. For the year ended this past January 26, the fashion retailer posted pretax profit of GBP50.9 million.
Ted Baker said trading over November and the Black Friday sales event period was below expectations, with lower-than-anticipated margins and sell through. Further, the company expects the difficult trading conditions to continue, and therefore it is taking a more cautious outlook for the remainder of the financial year.
Ted Baker is conducting a cost review in a bid to improve its efficiency and has temporarily suspended its dividend. The company said it will look to resume payment as soon as it is "appropriate to do so".
Ted Baker said CEO Lindsay Page has resigned with immediate effect, and Chief Financial Officer Rachel Osborne has become acting CEO with immediate effect. In addition, David Bernstein has stepped down as executive chair and Non-Executive Director Sharon Baylay has become acting chair. The company said it looking for a replacement for Bernstein.
Energy provider SSE said it welcomed the UK Competition & Markets Authority's decision to clear the proposed sale its SSE Energy Services business to OVO Group. The sale is expected to complete around mid-January 2020.
Ovo is paying GBP400 million in cash and GBP100 million of loan notes. The retail arm provides energy to UK householders, under brands such as SSE, SSE Scottish Hydro, SSE Southern Electric, and SSE Swalec.
"Completion of the transaction will give SSE plc even sharper focus to delivering the low carbon infrastructure needed to help the UK reach net zero emissions. We have a clear strategy around developing, operating and owning renewable energy and electricity network assets, along with growing businesses complementary to this core," said SSE CEO Alistair Phillips-Davies.
The pound was quoted at USD1.3155 early Tuesday, flat from USD1.3154 late Monday, ahead of the UK general election on Thursday.
The euro was quoted at USD1.1067, flat from USD1.1070 at the European equities close Monday.
Against the yen, the dollar was trading at JPY108.60, flat from JPY108.59 late Monday.
Brent oil was quoted USD64.18 early Tuesday, flat against USD64.20 a barrel late Monday.
Gold was quoted at USD1,462.18 an ounce early Tuesday, firm from USD1,460.80 late Monday.
The Japanese Nikkei 225 index closed down 0.1%. In China, the Shanghai Composite closed up 0.1%, while the Hang Seng index in Hong Kong is flat.
Consumer prices in China accelerated at their fastest pace for almost eight years in November as the African swine fever epidemic caused pork prices to more than double, data showed.
The consumer price index - a key gauge of retail inflation - came in at 4.5% for November, the National Bureau of Statistics said, up from 3.8% in October and the highest rate since January 2012. Analysts surveyed by Bloomberg News had forecast an increase of 4.3% on-year.
The widespread outbreak of swine fever since August 2018 has disrupted the pork supply in China, sending the prices of the staple meat up more than double in November.
The economic events calendar on Tuesday has UK industrial and manufacturing production data at 0930 GMT.
In the UK, the latest grocery share figures from Kantar for the 12 weeks to December 1 will be released at 0800 GMT.
By Arvind Bhunjun; [email protected]
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