Bovis to make 'significant' second half progress, Micro Focus revenue falls in line with guidance

London open

The FTSE 100 is expected to open 13 points lower on Tuesday, having closed down 0.05% at 7,549.27 on Monday.

Stocks to watch

Residential landlord Grainger on Tuesday said it had agreed to forward fund a 146-home private rental development with around 12,500 square feet of commercial space, in the Hallsville Quarter Development at London's Canning Town, London for £62m. Grainger said it expected the investment to generate a gross yield on cost of 5.5% once stabilised, with completion expected in late 2022.

Housebuilder Bovis said it expected to make “significant” progress in the second half to deliver an improved full year operational and financial performance despite Brexit worries. Bovis reported a 4% rise in completions for the half year to 1,647, adding that market fundamentals remained stable with good demand for new homes across all regions.

CLS Holdings on Tuesday said it had it had bought a multi-let office property in Cologne, Germany for €30.5m excluding costs. The purchase price reflected a net initial yield of 5.1% with the reversionary yield estimated to be more than 6%, CLS said, adding the property was fully let with a weighted average unexpired lease term of 2.2 years.

Micro Focus saw a 5.3% fall in its revenue on a constant currency basis for the six months ended 30 April, to $1.66bn - in line with its guidance - while its adjusted EBITDA was ahead 1.8% to $662.3m, it said on Tuesday. The FTSE 100 software company said its adjusted diluted earnings per share from continuing operations were ahead 8.4% at 85.35 cents.

Ocado reported that its annual interim loss before tax deepened from £13.6m to £142.8m for the six months ended 2 June as the online retailer dealt with the impact of a fire that damaged property and goods at its Andover distribution centre in February. However, the FTSE 100-listed company said trading was in line with expectations as double-digit revenue growth was driven by a 10% rise in retail sales.

Newspaper round-up

A fifth of the businesses started by Britain’s growing army of sole traders close within a year, according to a study highlighting the precarious financial states of those who opt for self-employment. A report by the Institute for Fiscal Studies found that less than half of companies set up by individuals have a long-term future, with 60% ceasing trading within five years. – Guardian

Fears that Britain’s economy has come to a standstill have been heightened by a report from retailers showing annual consumer spending at its weakest since their records began in the mid-1990s. The British Retail Consortium said clarity over Brexit was urgently required after falling sales in June came as a marked contrast to the bumper World Cup and weather-related activity of a year earlier. - Guardian

Ford's decision to close its Welsh engine factory was “not directly linked” to the possibility of a no-deal Brexit, its European boss said, but warned that failure to strike a deal could have “significant implications” for its remaining UK plants that employ 10,000 staff. Steven Armstrong highlighted the dangers to Ford’s commitment to its British operations during questioning by MPs on the Welsh Affairs Committee about plans to close its Bridgend engine plant with the loss of 1,700 jobs. - Telegraph

Half of all shopping will move online in the next decade, piling more pressure on traditional retailers that are struggling to adapt to the rise of digital commerce. By 2028 the oldest millennials will be approaching 50 years of age, meaning the generations that grew up with the internet will account for half of the adult population, according to Retail Economics. - Telegraph

The government had a “pervasive” influence over the strategy taken by a scandal-hit restructuring division of Royal Bank of Scotland that mistreated thousands of businesses, according to documents revealed in a legal claim against the bank. Court papers show that RBS executives complained that a division of the Treasury had pressured its Global Restructuring Group to use the bank’s contentious property unit to acquire customers’ assets. - The Times

US close

Wall Street stocks closed lower on Monday as the previous week's strong jobs data dampened expectations that the Federal Reserve would cut interest rates by 50 basis points when rate-setters in the US next met at the end of July.

At the close, the Dow Jones Industrial Average was down 0.43% at 26,806.14, while the S&P 500 was 0.48% softer at 2,975.95 and the Nasdaq Composite was trading 0.78% weaker to 8,098.38.

The Dow Jones closed 115.98 points lower after stocks finished slightly lower on Friday following a stronger than expected jump in hiring in June, which called into question the speed - but not the likelihood - of interest rate cuts by the Federal Reserve over what remained of 2019.

Fed funds futures were left fully pricing-in a 25 basis point cut at the 30-31 July Federal Open Market Committee meeting, instead of even odds of a 50 point reduction just before the jobs report's release, a 100% chance of a further 25 point cut by December and roughly even odds of another 25 basis points being lopped-off.

With the outlook for rate cuts now a bit murkier, Morgan Stanley said it was "putting our money where our mouth is" and downgraded global equities to 'underweight' from 'equal-weight' on Monday.