AB Foods flags serious slide in Primark profits, LondonMetric to raise dividend
London open
The FTSE 100 is expected to open 50 points higher on Thursday, having closed down 0.19% at 6,157.96 on Wednesday.
Stocks to watch
Associated British Foods said it expected full year adjusted operating profit for Primark, excluding exceptional charges, will be in the range £300-350m for the full year compared to £913m reported for the last financial year, reflecting the impact of the coronavirus pandemic. The company said nearly all the budget stores had now reopened after lockdown measures eased across its markets. Revenue at its retail division was down 75% to £582m in the third quarter.
LondonMetric Property said on Thursday that 95% of its advance rental payments due up to 24 June has been collected, or was being collected monthly. The FTSE 250 company said a further 3% was expected to be received “imminently”, and the remaining 2% was in discussions - less than half of which was expected to be forgiven. As a result of the “strong” rent collection, it said it was intending to increase its first quarterly dividend for the financial year ending 31 March 2021.
Newspaper round-up
More than 6,000 retail jobs were cut from the UK high street on Wednesday as the full impact of the pandemic on the high street – combined with the wind-down of the government furlough scheme – starts to emerge. The latest job losses – from retailers ranging from Harrods to Philip Green’s Arcadia group and SSP, the company behind hundreds of railway and airport eateries – bring the total cuts announced this week to more than 10,000. – Guardian
English water companies have handed more than £2bn a year on average to shareholders since they were privatised three decades ago, according to analysis for the Guardian. The payouts in dividends to shareholders of parent companies between 1991 and 2019 amount to £57bn – nearly half the sum they spent on maintaining and improving the country’s pipes and treatment plants in that period. – Guardian
Trade between the UK and European Union would still flourish in the short term even without a Brexit deal, according to a candidate seeking to run the World Trade Organization. The historic alliance of Britain and the bloc and their regulatory ties should allow goods and services to continue flowing across borders according to Hamid Mamdouh, a former WTO director of trade in services and investment who is Egypt's candidate to run the organisation. – Telegraph
The City regulator was warned last year that Wirecard was allegedly linked to a scheme that used fake online stores to disguise the processing of high-risk payments. The Financial Conduct Authority was given details of an operation whereby allegedly bogus ecommerce sites were used as a front for channelling online gambling proceeds through the international payments system. – The Times
The former chief executive of Indivior has pleaded guilty to a criminal charge arising out of a US Department of Justice investigation into the marketing of the company’s blockbuster opioid addiction treatment. Shaun Thaxter, 52, pleaded guilty in federal court in Abingdon, Virginia, to causing misbranded information about the safety of Suboxone Film. – The Times
US close
US stocks closed mixed on the first day of trading in the new quarter amid "encouraging" clinical data from Pfizer and BioNTech on the study of a Covid-19 vaccine candidate.
At the close, the Dow Jones Industrial Average was down 0.30% at 25,734.97, while the S&P 500 was 0.50% firmer at 3,115.86 and the Nasdaq Composite saw out the session 0.95% stronger at 10,154.63.
The Dow closed 77.91 points lower on Wednesday, reversing some of the gains recorded in the final session of a volatile but record-setting month for Wall Street on Tuesday.
Wednesday's focus was mostly on Covid-19 headlines, with White House health advisor Dr Anthony Fauci cautioning that if the pandemic continues at its current rate, new cases could potentially surpass 100,000 infections every day.
As many as 12 US states have now halted or decelerated their economic reopening as a result of a 40% jump in new cases over the past seven days to roughly 39,750 every 24 hours.
New York City also halted plans to resume indoor dining as soon as next week as a result of the increased number of new cases spreading across the nation.
However, stocks turned positive in early trading after a study of a Covid-19 vaccine candidate being developed by Pfizer and BioNTech showed the drug created neutralising antibodies.