Burberry pulls final dividend, United Utilities increases its distribution

London open

The FTSE 100 is expected to open 77 points lower on Friday, having closed down 0.86% at 6,015.25 on Thursday.

Stocks to watch

Fashion retailer Burberry pulled its final dividend and took a £241m hit as a result of the coronavirus pandemic. The company said it expected its first quarter to be severely impacted with store closures likely to be at or near peak for most of the three months to June 30. Full year pre-tax profits fell 62% to £169m as the company felt the impact of store and factory closures globally.

United Utilities increased its final dividend as £56m of Covid-19 costs contributed to a small decline in the water company's annual operating profit. Operating profit for the year to the end of March fell 0.7% to £630.3m as revenue rose to £1.86bn from £1.82bn. Costs related to Covid-19 were £56m including £18.1m of expected bad debts and £37m for losses at the Water Plus joint venture. The final dividend increased 3.2% to 28.40p a share.

Hikma Pharmaceuticals said on Friday that its wholly-owned US subsidiary has received approval from the US Food and Drug Administration (FDA) for its icosapent ethyl capsules of one gram, which is its generic equivalent to ‘Vascepa’. The FTSE 100 pharmaceuticals giant noted that in March, the United States District Court for the District of Nevada invalidated six key Vascepa patents owned by Amarin. It noted that the decision was currently being appealed.

Newspaper round-up

More than 30,000 pubs, bars and restaurants may remain permanently closed because the coronavirus shutdown has sent a wrecking ball through the UK’s hospitality trade. The grim prediction follows a week in which the Casual Dining Group, which owns the Bella Italia and Café Rouge restaurant chains, warned it was headed into administration – casting doubt over the future of its 250 restaurants. – Guardian

The UK competition watchdog is investigating package holiday firms after receiving thousands of complaints from consumers who have been unable to recoup money on cancelled breaks. The Competition and Markets Authority said it had received 60,000 complaints related to the coronavirus crisis, including difficulties getting money back and price rises. – Guardian

Chancellor Rishi Sunak is facing calls to allow Covid-19 loans to struggling firms to be converted to grants or for repayments to be linked to profits. Banks have given companies £22bn in loans under three government-backed coronavirus lending schemes, but there are growing fears that SMEs will be unable to repay or that they simply will not bother because they think the Government will not pursue the debt. – Telegraph

Lloyds Bank has suffered a bruising backlash over its new three-year pay policy as more than a third of voting investors opposed the plan. The rebellion came after influential advice group ISS told shareholders that although chief executive Antonio Horta-Osorio will take home a maximum of £7m under the new policy, down from £9.8m, he has a higher chance of getting a payout in long-term bonuses. – Telegraph

Tentative signs that the worst of the economic damage has been done by the coronavirus pandemic emerged yesterday in closely-watched readings from Britain, the eurozone and the United States. Private-sector output in all three continued to fall this month but bounced back more than expected from record lows in April, three reports showed. A further report showed that new claims for unemployment benefits in the US fell for the seventh consecutive week, although they remained at an extreme level. – The Times

US close

Wall Street stocks closed lower on Thursday as market participants digested another jobless report from the Department of Labor and news that the Senate had passed a bill that would make listings by Chinese firms on US exchanges more difficult led to fears of a ratcheting up in trade tensions between the world's two biggest economies.

At the close, the Dow Jones Industrial Average was down 0.41% at 24,474.12, while the S&P 500 was 0.78% weaker at 2,948.51 and the Nasdaq Composite saw out the session 0.97% weaker at 9,284.88.

The Dow closed 101.78 points higher on Thursday, carrying on a rally started earlier in the week after Moderna Therapeutics announced some early success in trials for a Covid-19 vaccine.

The session's main focus was on unemployment claims, as initial weekly jobless claims in the States continued to rise at an accelerated but revised figures for the prior week revealed a larger than expected slowdown.

According to the Department of Labor, the pace of new claims slowed by 249,000 over the week ending on 16 May to reach 2.438m.

While the surge in claims had eased significantly since the start of the pandemic, it remained far above the roughly 220,000 clip at which they had been running before it.