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(Alliance News) - Stock prices in London are seen opening slightly higher on Wednesday as investors continued to balance hopes for coronavirus vaccinations and US fiscal stimulus against rising infections.
In early company news, online dining platform Just Eat Takeaway.com reported a sharp rise in order growth for the fourth quarter. Housebuilder Persimmon said it delivered a robust performance against difficult market conditions. Online fashion retailer ASOS got a Covid-19 boost as consumers increasingly shopped from home during the pandemic.
IG futures indicate the FTSE 100 index is to open 6.29 points higher at 6,760.40. The blue-chip index closed down 44.37 points, or 0.7%, at 6,754.11 Tuesday.
Just Eat Takeaway.com early Wednesday reported a surge in order growth as customers flocked to its food ordering platform after lockdown restrictions closed restaurants and pubs.
For the fourth quarter, total orders were 179.8 million, up 57% from 114.9 million orders in the fourth quarter of 2019.
For the full year 2020, Just Eat expects revenue growth of more than 50%, with adjusted earnings before interest, tax, depreciation, and amortisation margin of 10%.
The company said the profit margin reflects significant investments in its Delivery offering in the fourth quarter of 2020. It said it will continue to invest heavily and prioritise market share over adjusted EBITDA.
Just Eat also offers its Marketplace service, for which restaurants do their own deliveries.
"The fourth quarter of 2020 marks our third consecutive quarter of order growth acceleration. Our investment programme is very successful and has led to significant market share gains in most of our countries. The progress in the UK is particularly exciting; order growth of 58% and we have increased our Delivery Orders nearly five-fold in the fourth quarter of 2020 compared with the same period in 2019," said Chief Executive Officer Jitse Groen.
Just Eat said its acquisition of peer Grubhub in the US should be completed during the first half of this year. Due to that acquisition, it said it is reviewing the listing venues for its shares. As a result, it said it will delay its planned delisting from Euronext Amsterdam and will remain listed in both London and Amsterdam.
Dutch firm Takeaway.com NV bought the UK's Just Eat PLC to form Just Eat Takeaway early last year.
Persimmon said it produced a robust performance for the year, against the backdrop of the "unprecedented challenges" of 2020.
New home completions for 2020 were 13,575, down from 15,855 in 2019, while the average selling price was GBP230,500, up from GBP215,709. The company generated total revenue of GBP3.33 billion, down from GBP3.65 billion.
Persimmon noted that dividends paid in 2020 were down 53% to 110 pence from 235p in 2019.
Persimmon said the robust performance in the second half of the year, delivering 8,675 new home legal completions, mitigated some of the damage of delays caused by the initial Covid-19 lockdown period in the first half.
"Recent events have served to further demonstrate the continuing near term uncertainties arising from the Covid-19 pandemic. However, we believe that the longer term fundamentals of the UK housing market remain resilient and I am confident Persimmon will continue to deliver superior long term value for all of its stakeholders," CEO Dean Finch said.
ASOS said revenue growth in the period to December 31 surpassed the fashion retailer's expectations, and it forecasts financial 2021 pretax profit to be at top end of current market expectations.
ASOS said UK retail sales up 36% in the four months to December 31, while EU sales were up 18%. US retail sales were up 13%, or 17% at constant currency. Total group revenue was GBP1.36 billion, up 23% from GBP1.11 billion in 2019, or up 24% at constant currency.
ASOS said that with virus-related restrictions likely to be in place for the balance of the first half, it expect a net Covid-19 profit benefit of at least GBP40 million in the first half.
"Looking forward, given the uncertainty associated with the virus and the impact on customers' lives, our cautious outlook for the second half of the year remains unchanged. However, the strength of our performance gives us confidence in our continued progress towards capturing the global opportunity ahead," said CEO Nick Beighton.
The US on Tuesday announced all air travellers entering the country will need a negative Covid-19 test before departure, as the country hit a record of nearly 4,500 deaths in a single day.
The policy takes effect on January 26 and expands an existing measure targeting the UK, where the strain known as B117 has been tied to a drastic spike in cases.
The US remains the worst-affected country, with around 380,000 - or a fifth - of the world's almost two million dead, despite accounting for just four percent of the global population.
In the UK, the NHS medical director for London warned on Tuesday that the capital's hospitals faced an increasingly dire situation. London now had almost 8,000 Covid-19 inpatients, compared to 4,000 on December 25.
"The market remains incredibly well supported by the two-pronged monetary and fiscal stimulus efforts and investors lean optimistic for a speed vaccine distribution and activity normalization, which offers up brighter days and blue sky ahead. The global economy faces numerous economic headwinds due to the omnipresent Covid-19 and its new mutations," said Axi's Stephen Innes.
The pound was quoted at USD1.3697 on Wednesday morning, up sharply from USD1.3621 at the London equities close Tuesday.
The euro was priced at USD1.2226, up from USD1.2157. Against the yen, the dollar was trading at JPY103.70, down from JPY104.18.
Brent oil was trading at USD57.13 a barrel, up from USD56.61 late Tuesday. Gold was quoted at USD1,862.02 an ounce, higher against USD1,844.07.
Bolstered by support from his deputy Mike Pence who opposed ousting the US president, Donald Trump denied responsibility Tuesday for an assault on Congress by his supporters but now faces an all-but-certain second impeachment effort.
With Republican backing for Trump eroding in the final days of his presidency, Pence served as an anchor, ruling out calls by Democrats to invoke the 25th Amendment in order to remove the president from office.
"I do not believe that such a course of action is in the best interest of our nation," Pence wrote in a letter to House Speaker Nancy Pelosi shortly before the House was set to vote on a measure calling on Pence to use the amendment to strip Trump of power.
With that effort dead, Pelosi quickly announced her managers for the impeachment debate, the strongest signal yet that she is going ahead with a move to make Trump the first president in US history to be impeached for a second time. An impeachment vote in the House of Representatives is expected Wednesday.
In Asia on Wednesday, the Japanese Nikkei 225 index closed up 1.0%. In China, the Shanghai Composite ended down 0.3%, while the Hang Seng index in Hong Kong is down 0.1%.
Wednesday's economic calendar has eurozone industrial production at 1000 GMT and US inflation at 1330 GMT.
By Arvind Bhunjun; arvindbhunjun@alliancenews.com
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