4th Sep 2018 07:41
LONDON (Alliance News) - Stock prices in London are seen opening flat ahead of the UK construction PMI reading for August, while WPP began life without founder Martin Sorrell by reporting growth in quarterly net sales. IG futures indicate the FTSE 100 index is to open 0.40 points higher at 7,505.00. The blue chip index closed up 1.0%, or 72.18 points at 7,504.60 on Monday.In early UK corporate news, WPP, with new Chief Executive Mark Read at the helm, said it performed strongly in terms of winning and retaining business over the half year period.For the half year ended June 30, reported revenue was down 2.1% at GBP7.49 billion compared to GBP7.65 billion last year; however on a constant currency basis revenue rose 2.9%. Reported pretax profit was up 8.6% at GBP846.0 million compared to GBP779.0 million last year and up 14% at constant currency. "The second quarter of 2018 was WPP's first quarter of like-for-like growth since the first quarter of 2017, and the company has performed strongly in terms of winning and retaining business over the period," Read said. Net sales were up 0.7% in the second quarter, which is the first quarter of growth since the first quarter of 2017. This follows a 0.1% decline in the first quarter of the year, WPP said. Reported billing were down 1.0% at GBP26.65 billion against GBP26.92 billion the year before, but up 4.1% in constant currency. WPP said it won new business from companies such as Adidas, Hilton Hotels, Mondelez, Office Depot and T-Mobile and also expanded its relationships including Danone, Mars and Royal Dutch Shell. WPP declared an interim dividend of 22.7 pence per share, unchanged from last year. "As chief executive, my focus will be on invigorating our company and returning the business to stronger, sustainable growth. Our review of strategy is underway, addressing our structure, our underperforming operations, particularly in the US, and how we position the company for the future. We will provide an update by the year end," added Read, who was appointed Monday. Fellow FTSE 100 index constituent DS Smith said it has seen good like-for-like volume growth in the year to date, with progress across all geographic regions. Additionally, the paper and packaging company said it retained a disciplined approach to cashflow and capital expenditure. Trading remains in line with expectations, DS Smith added. "The corrugated packaging industry continues to demonstrate excellent growth prospects, driven by changing shopping habits, e-commerce, and the ever-increasing relevance of sustainability. DS Smith is in a strong position, as a market leader, to capitalise on these opportunities, and the Board looks to the future with confidence," CEO Miles Roberts said. In the economic calendar on Tuesday is the eurozone producer price index at 1000 BST, while there are Markit and ISM manufacturing PMIs from the US at 1445 BST and 1500 BST, respectively.UK retail sales continued to slow in August as consumers felt the pinch, despite warm weather fuelled-grocery spending and back-to-school purchases. Figures from the British Retail Consortium-KPMG sales monitor showed that retail sales increased by 0.2% on a like-for-like basis compared to the same month in 2017.This compares to like-for-like growth of 0.5% in July, when buoyant spending on food and drink delivered a fillip to a beleaguered sector. Total sales growth also slowed, to 1.3% in August from 1.6% in July.UK inflation report hearings start at 1315 BST before the Treasury Select Committee, following the central bank's interest rate hike last month. Bank of England Governor Mark Carney, Chief Economist Andy Haldane and Monetary Policy Committee member Silvana Tenreyro are all set to speak.The hearing take place amid media reports that the UK Treasury is in talks with Carney about staying on until 2020. The Canadian is due to leave in June 2019, ending six years as head of the UK's central bank, and an advert seeking a replacement had been expected to be posted by the end of September.However, the BBC reported on Monday that the UK government department is in talks with Carney over him staying at the helm until 2020.Carney announced in late 2016 that he would stay in his role until the end of June 2019, opting against a full eight-year term. But that would mean he will be in the hot seat for just three months after the UK formally leaves the EU in March, leaving a newcomer to navigate the aftermath of the divorce."Hopefully MPs will pin down the governor on his future, as well as any succession plan. The current speculation is not only unwelcome, but it also comes across as incredibly self-indulgent at a time when investors and financial markets want to feel certain that in the absence of political leadership, we still have a safe pair of hands at the Bank of England," said CMC Markets chief market analyst Michael Hewson."Carney's apparent equivocation is not particularly helpful at a time, especially as any new appointment process should be well underway by now, in order that markets get a clear idea as to who might be taking over," Hewson added.The governor will be urged to come clean about his future when he appears in front of the powerful Treasury Select Committee on Tuesday.The pound was marginally lower quoted at USD1.2864 compared to USD1.2883 at the London equities close Monday, ahead of the UK construction PMI reading at 0930 BST.The UK PMI reading for August is expected to come in at 54.9, down from the 55.8 score in July.Financial markets in the US resume trading following the Labor Day holiday on Monday.The Japanese Nikkei 225 index closed down 0.1%. In China, the Shanghai Composite is up 0.6%, while the Hang Seng index in Hong Kong is up 0.7%.Related Shares:
Smith (DS)WPP