London pre-open: Stocks to rise; Greggs announces job losses

London stocks were set to rise at the open on Wednesday following a positive close on Wall Street.

The FTSE 100 was called to open 36 points higher at 6,648.

CMC Markets analyst David Madden said: "US markets pulled back some of the losses they incurred on Monday. Yesterday, voters in the state of Georgia went to the polls for the dual Senate race. The outcome will be closely watched as it will determine whether the Democrats take control of the upper house - they already control the lower house - or whether the Republicans will maintain control of the Senate.

"The Democrats need to win both seats to take control of the upper house. According to reports, the races are neck and neck. An election official in Georgia said the final results might be known at lunchtime - local time - so we could have clarification around 6pm (UK time)."

On home shores, meanwhile, the third national lockdown in England kicked in overnight.

"The health crisis remains at the forefront of traders’ minds especially in light of the tougher restrictions being introduced in countries like Germany, the UK and Denmark," said Madden. "The number of new Covid-19 cases in a day in the UK topped 60,000 for the first time and there is a growing feeling that things will get worse before they will get better. On the other side of the coin, dealers are mindful that vaccinations are being rolled out but the process is likely to be slow, so governments are unlikely to rolling back on restrictions anytime soon."

In corporate news, High Street bakery chain Greggs said profits would not return to pre-Covid levels until 2022 at the earliest as it forecast a £15m loss this year and revealed 820 job losses.

The company said fourth quarter like-for-like sales at its managed stores were 81.1% of 2019 levels, slumping to £293m from £344m. Fiscal year total sales fell to £811m from £1.16bn a year ago.

"Looking ahead, the significant uncertainty over the duration of social restrictions, along with the impact of higher unemployment levels, makes it difficult to predict performance. However, we do not expect that profits will return to pre-Covid levels until 2022 at the earliest," the company said.

Informa said 2020 results would be in line with guidance as the company’s subscription businesses helped offset the impact of Covid-19 on its events operations.

Annual revenue will be between £1.65bn and £1.68bn and adjusted operating profit will be £250m-£270m, Informa said. The FTSE 100 company also announced John Rishton would replace Chairman Derek Mapp at the annual general meeting in June.