Centrica maintains full-year guidance, profits slide at Johnson Matthey
London open
The FTSE 100 is expected to open 35 points lower on Thursday, having closed down 0.84% at 7,262.49 on Wednesday.
Stocks to watch
Centrica maintained full year guidance as it added 136,000 total accounts and lost 107,000 energy customers in the four months to October. In a trading update, the company reported higher margins and returns in business energy supply in North America and strong trading and optimisation performance in Europe, offsetting the impact of further extensions to outages at the non-operated Dungeness B and Hunterston B nuclear power stations. It also experienced lower near-term European wholesale gas prices, although 2019 exploration and production earnings were largely protected by forward hedging.
Severn Trent booked an interim profit before tax of £180.7m, down 11% on the same period last year as the FTSE 100-listed company was hit by infrastructure costs and lower earnings from property sales. Even so, the utility company hiked its half-year dividend by 7% to 40.03p per share after revenue edged 3% higher to £910.0m following tariff increases in the regulated water and wastewater segments.
Speciality chemicals firm Johnson Matthey reported a 3% improvement in sales to £2.12bn in its first half on Thursday, which it said was driven by “good growth” in its clean air and efficient natural resources operations. The FTSE 100 company said its underlying operating profit declined 5% to £265m, as it was impacted by around £15m of one-off costs in clean air, including additional freight costs and inefficiencies within its manufacturing footprint, driven by the phasing of completion of the company’s new plant in Poland. Underlying earnings per share were 12% lower at 95.8p, reflecting lower underlying operating profit, higher net interest expense and a one-off tax provision.
Newspaper round-up
Google will no longer allow political advertisers to target voters based on their political affiliation, the company announced Wednesday, in a move that will increase pressure on Facebook to limit micro-targeting. Google also plans to “clarify” its ad policies around false claims to explicitly ban doctored video and images known as “deep fakes”, misleading claims about the census, and “demonstrably false claims” that could undermine trust in elections or the democratic process. – Guardian
A jury trying two men accused of fraudulently trading tens of thousands of tickets for events such as Ed Sheeran concerts and the Harry Potter & the Cursed Child play has been told: “There is nothing illegal about reselling tickets”. Peter Hunter and David Smith – who traded as Ticket Wiz and BZZ - used multiple identities and computer bots to buy £4m-worth of tickets, selling them on secondary ticketing websites such as Viagogo for £10.8m, Leeds Crown Court has heard. – Guardian
Investment in UK tech firms has more than doubled since the Brexit vote, surging to a record £9bn this year and putting the country far ahead of rivals in Europe. Data collected by venture capital firm Atomico shows Britain has retained its place at the head of the continent's league table, despite fears over an exodus of start-ups and established technology firms as the country leaves the European Union. – Telegraph
A former British Airways executive took more than $5 million in bribes from a contractor to help it to win work with the airline, American prosecutors have claimed. The executive, Steven Clark, has been indicted on bribery, money laundering and conspiracy charges over allegations that he engaged in a “clandestine scheme” that earned him $18,000 a month and a stake in the contractor. – The Times
Direct Line pledged yesterday to slash annual costs by £50 million a year through increased use of automation and self-service tools. Before a presentation to investors today, Penny James, who stepped up to be chief executive of the car and household insurer in May, said that she aimed to cut operating expenses to below £590 million, from £644 million. – The Times
US close
US stocks closed lower on Wednesday as uncertainty regarding the possibility of a trade deal between Washington and Beijing mounted.
At the close, the Dow Jones Industrial Average was down 0.40% at 27,821.09, while the S&P 500 was 0.38% softer at 3,108.46 and the Nasdaq Composite saw out the session 0.51% weaker at 8,526.73.
The Dow closed 112.93 points lower on Wednesday after seeing out the previous session weaker as confusing signals on the US-China trade front and some disappointing figures from the likes of Home Depot and Kohl's halted a record-breaking rally.
At the forefront of investors' minds on Wednesday was news that Donald Trump had threatened to impose higher tariffs on Chinese goods on Tuesday if Beijing did not strike a deal on trade.
"If we don't make a deal with China, I'll just raise the tariffs even higher," Trump said at a Cabinet meeting.
SpreadEx analyst Connor Campbell said: "In a week of increasingly mixed signals surrounding the US-China trade deal, Donald Trump flung some more dirt into the muddy waters on Tuesday evening.
"Combine it with the reports that Beijing is feeling increasingly pessimistic, and the blunt fact that nothing has been signed yet despite a couple of weeks ago both sides suggesting talks were ahead of schedule, and it's understandable that investors would have their concerns."