(Alliance News) - Stock prices in London are seen opening slightly higher on Friday as investors weigh whether a second report showing easing US inflation is enough for the Federal Reserve to change course on aggressive tightening.
Early UK company news featured two gambling operators. Paddy Power-owner Flutter Entertainment talked up its progress in the lucrative US sports betting market. 888 Holdings reported a drop in interim profit.
IG futures indicate the FTSE 100 index will open 6.49 points higher at 7,472.40. The index closed down 41.20 points, or 0.6%, at 7,465.91 Thursday.
Flutter Entertainment said it saw positive momentum in the first half of 2022, driven by recreational player growth.
For the six months to June 30, revenue rose 11% to GBP3.39 billion from GBP3.05 billion last year, but Flutter swung to a pretax loss of GBP51 million from a GBP77 million profit.
During the half it said it increased recreational customer base by over one million monthly players to 8.7 million, 14% higher than the prior year. Flutter said the rapid expansion of its US business FanDuel was key to this growth, along with good underlying player momentum in the UK&I and Australia.
In the US, its sports betting market share accelerated to 51% in the second quarter, driven by FanDuel's "efficient" customer acquisition and strong operational execution.
Looking ahead, Flutter expects full-year performance in line with market expectations.
"The second half of the year has started well, and we look forward to the start of the football seasons in both the US and Europe. Being part of the Flutter group provides unique strategic advantages to our portfolio of brands, giving access to expertise, technology and resources to drive performance and capitalise on further growth opportunities we see ahead," said Chief Executive Officer Peter Jackson.
888 Holdings said it saw continued strategic progress in the first half following its purchase of the non-US assets of William Hill.
For the six months to June 30, revenue was GBP332.1 million, down 13% from GBP380.9 million last year, and pretax profit was GBP14.4 million, down 66% from GBP54.2 million.
888 attributed the decline in profit to increased legal and professional costs associated with the acquisition of the William Hill businesses and costs related to the disposal of its Bingo business.
Looking ahead, 888 said revenue in the second half is expected to be in line with revenue in the first half of 2022.
"The group's financial performance in the period primarily reflects market conditions in the UK. However, we believe the proactive actions we have taken to increase player protections and drive higher standards of player safety have put the group in an even stronger position for the future," said Chief Executive Officer Itai Pazner.
"In the second half of 2022, our main focus is on integration, delivering on our synergy plans, and driving higher profitability across the business. This focus on integration, execution and de-leverage will unlock the huge potential from the enlarged business. These actions will position us to take advantage of significant growth opportunities ahead of us, as we leverage our leading technologies to create a best-in-class global betting and gaming platform," Pazner added.
Calls for a flat open in London come as markets continue to response to signs of moderation of inflation in the US.
Data on Thursday showed the US producer price index rose by 9.8% in July on a year before, easing from an 11% annual rise in June. The latest reading was lower than the market forecast, cited by FXStreet, of 10%.
The factory price data came just a day after consumer price inflation moderated more-than-expected to an annual rate of 8.5% in July from 9.1% in June.
Despite the data, leading Fed officials have continued to speak of the urgent need to address inflation, setting the stage for another potentially large rate hike in September.
San Francisco Fed chief Mary Daly was the latest to bring markets down to earth, telling Bloomberg TV that the data were "significant in that they are saying that we're seeing some improvement but they're not victory".
She added she would likely support a half-point hike at next month's meeting, but was open to a third successive three-quarter-point lift if the data showed it was needed.
Daly also tempered hopes that the bank could begin cutting borrowing costs next year if prices are brought down, and said interest rates would be held for a period before any reductions are made.
The pound was quoted at USD1.2202 early Friday, unchanged from USD1.2205 at the London equities close Thursday.
The euro was priced at USD1.0310, down from USD1.0328. Against the yen, the dollar was trading at JPY133.33 in London, higher against JPY132.79.
Brent oil was quoted at USD99.27 a barrel Friday morning, down from USD98.87 late Thursday. Gold stood at USD1,791.15 an ounce, firm against USD1,789.51.
New York ended mixed on Thursday, with the Dow Jones Industrial Average up 0.1%, but the S&P 500 closed down 0.1% and Nasdaq Composite down 0.6%.
In Asia on Friday, the Nikkei 225 index ended up 2.6%, reopening after being closed for a holiday on Thursday. In China, the Shanghai Composite was down 0.1%, while the Hang Seng index in Hong Kong was up 0.4%. The S&P/ASX 200 in Sydney closed down 0.5%.
The economic calendar on Friday has eurozone industrial production at 1000 BST and the US Michigan consumer sentiment index at 1500 BST.
By Arvind Bhunjun; arvindbhunjun@alliancenews.com
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