Centrica warns of lower annual profit, Grainger forward-funds Birmingham development
London open
The FTSE 100 is expected to open 14 points lower on Thursday, having closed up 0.1% at 7,419.02 on Wednesday.
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Centrica has warned annual profit will be lower than market expectations due to poor performance at its business energy supply division. Britain’s biggest energy supplier said it faced competitive market conditions for business energy supply in North America and the UK. As a result, 2017 earnings per share will be about 12.5p – below market consensus.
GlaxoSmithKline, along with its partner Innoviva, announced the filing of a supplemental New Drug Application (sNDA) with the US Food and Drug Administration on Thursday, for the use of Trelegy Ellipta (fluticasone furoate/umeclidinium/vilanterol) for an expanded indication. The FTSE 100 drugmaker said that indication was for the maintenance treatment of airflow obstruction and reduction of exacerbations in patients with chronic obstructive pulmonary disease. It said approval of the sNDA would mean FF/UMEC/VI could be used by physicians to treat a wider population of patients with COPD, who were at risk of an exacerbation and required triple therapy.
Residential landlord Grainger has exchanged contracts with Blackswan Property to forward-fund and acquire a private rented sector build-to-rent development at Gilder's Yard in Birmingham, comprising 156 new purpose built PRS homes, for £28m. The FTSE 250 firm said it expected the investment to generate a gross yield on cost over 7% once stabilised. Blackswan Property will develop the site and Shaylor - a Midlands-based contractor - will construct the scheme.
Severn Trent lifted its forecast for regulatory bonuses after a strong first half of the year, where sales increased 3.7%, underlying earning per share by 7.7% and dividend by 6.2% to 34.63p. Having made strong operational improvements during the six months to 30 September, management were confident enough to increase the full year customer 'outcome delivery incentive' forecast to "at least £50m" from the £23m previously given.
Newspaper round-up
Car production increased last month as rising exports made up for falling demand in the UK, new figures reveal. Just over 157,000 cars rolled off production lines in October, 3.5% more than the same month last year, according to the Society of Motor Manufacturers and Traders (SMMT). – Guardian
Broadband providers will only be allowed to advertise the average speed of their service rather than a top speed only available to a handful of households after a dramatic shake-up of the rules by the advertising regulator. The crackdown on misleading claims means companies can only advertise download speeds that are available to at least 50% of customers at peak time. At present broadband providers can promote an “up to” speed that is available to at least 10% of customers. – Guardian
Furniture retailer Multiyork has collapsed into administration, putting almost 550 UK jobs at risk. Administrators Duff & Phelps, which also handled BHS’s insolvency, has begun the search for a buyer, though declined to comment on whether they were also considering selling off parts of the business. – Telegraph
Employment levels in the UK have beaten the expectations of the Office for Budget Responsibility, with important implications for the state of the country’s public finances. The OBR has reduced its forecast for unemployment over the next five years, after finding that it was better than it had projected in March, at 4.3pc – representing the lowest rate since 1975. – Telegraph
The former owner of the failed holiday company Monarch Airlines is about to receive a £60 million windfall after the Court of Appeal ruled that administrators have the right to sell its airport take-off and landing slots. The ruling could allow former owner Greybull Capital to release cash from the failed business to help with the £60 million bill for repatriating tens of thousands of Monarch passengers after the company ceased trading in October. – The Times
Britain’s mobile phone carriers are in line for a refund from the Treasury, potentially worth more than £100 million, after a court upheld an appeal against a steep rise in the fees they are charged to use the available airwaves. The Court of Appeal ruling yesterday follows complaints, led by EE, part of BT, about an increase introduced by Ofcom, the industry watchdog, in 2015 in the amount that it, and its competitors Three, O2 and Vodafone, must pay in annual licence fees for renting mobile phone spectrum. – The Times
US close
Wall Street finished mixed on Wednesday, following the record highs set the day before and amid lighter-than-usual trading volumes ahead of the Thanksgiving holiday on Thursday.
The Dow Jones Industrial Average was down 0.27% at 23,526.18 and the S&P 500 fell 0.08% to 2,597.08, while the Nasdaq 100 finished the session 0.12% firmer at 6,386.12.
On Tuesday, indices hit record highs as tech stocks rallied, with the likes of Facebook, Netflix and Amazon all in the black.
For the most part, Wednesday's batch of economic data releases were in line with market forecasts.
The key report on Wednesday was the University of Michigan's final reading on US consumer sentiment for the month of November, which was revised higher from a preliminary reading of 97.8 to 98., against a consensus for 98.2.
"In contrast to the media buzz about approaching cyclical peaks and an aging expansion, with the implication of greater uncertainty about future economic trends, consumers have voiced greater certainty about their expectations for income, employment, and inflation,” said Richard Curtin, the survey's chief economist.