(Alliance News) - Stock prices in London are seen opening higher on Wednesday, with Asian stocks on the up too, while focus will be in the pound throughout the morning after figures showed the UK annual inflation rate has topped 10%.
IG futures indicate the FTSE 100 index is to open 10.50 points higher, or 0.2%, at 7,546.56. The blue chip index closed up 26.91 points, or 0.4%, at 7,536.06 on Tuesday.
In early UK corporate news, Persimmon said strong house prices are offsetting cost inflation, though its half-year earnings declined. Contract-for-difference provider Plus500 is "optimistic" after first-half earnings growth and construction firm Balfour Beatty lifted guidance. Cineworld has been hit by a weaker film slate, and boohoo has invested in struggling Revolution Beauty Group.
Persimmon said revenue in the half-year to June 30 fell 8.3% to GBP1.69 billion from GBP1.84 billion. Pretax profit declined 8.4% to GBP439.7 million from GBP480.1 million.
"Persimmon continues to perform well. We are making important progress in quality, service, land investment opportunities and efficiencies to build an even stronger business, while continuing to deliver the strong financial returns that Persimmon is renowned for. Demand for our attractively priced, high quality homes has remained robust, with our average private sales rates for the period being 1% ahead year-on-year," Chief Executive Dean Finch.
"We are on track to achieve a 10% increase in our active outlets by the end of the current year as we work to rebuild our outlet position after a land buying pause three years ago and are tackling the on-going challenges in the planning system. We are stepping up proactive engagement with local authorities, enhancing our approach to developing attractive communities and raising the bar on design to help mitigate planning challenges. We continue to expect our volume delivery to be significantly higher in the second half of the year."
The new home average selling price was GBP245,597 during the period, up from GBP236,199 a year earlier.
Completions during the half amounted to 6,652 new homes, down from 7,406 a year earlier, as expected. Persimmon backed guidance of 14,500-15,000 completions for the full year.
It added that "sales price inflation is currently mitigating the cost inflation the industry is experiencing".
Plus500 said revenue in the first half of 2022 surged 48% to USD511.4 million from USD346.2 million a year earlier. Pretax profit jumped by two-thirds to USD312.6 million from USD188.7 million.
"Plus500 produced another outstanding performance in the first half of 2022, driven by the power of our market-leading proprietary technology and our consistent ability to attract and retain higher value customers over the long term. With continued operational and financial momentum being achieved, we also made substantial progress in delivering against our strategic priorities, in particular the major growth opportunities in the US, where we are continuing to make significant on-going investment, also by becoming a full clearing member of the CME Group exchanges," CEO David Zruia said.
In addition, it has announced a new USD60.2 million buyback, which will kick off following the conclusion of current share repurchase programmes.
Plus500 added: "Following several positive upgrades to market expectations related to Plus500's financial performance, which took place earlier this year, the board remains optimistic about the group's performance, with sustainable growth to be delivered over the medium to long term."
Balfour Beatty lifted yearly profit guidance.
For the half year ended July 1, the construction firm's revenue was largely unchanged year-on-year at GBP4.15 billion. Pretax profit more than doubled to GBP83 million from GBP35 million.
Balfour raised its dividend by 17% to 3.5 pence per share from 3.0p.
"Driven by this performance and also the strength of the order book, the board expects underlying profit from operations to be ahead of its previous expectations," Balfour said.
Picturehouse operator Cineworld said film goers have been "below expectations" recently.
"These lower levels of admissions are due to a limited film slate that is anticipated to continue until November 2022 and are expected to negatively impact trading and the group's liquidity position in the near term," it warned.
"Consequently, the group has been taking proactive steps to ensure it has the balance sheet strength and flexibility to adapt to market conditions. This includes significant previously disclosed operational and financial initiatives to manage costs and enhance liquidity."
Cineworld said it is in "active discussions with various stakeholders" to mull ways to bolster its coffers and possibly restructure its balance sheet, though a "comprehensive deleveraging transaction".
It warned that any deleveraging is likely to dilute the value of its shares.
Cineworld added: "The group's business operations are expected to remain unaffected by these efforts and Cineworld expects to continue to meet its ongoing business counterparty obligations. Cineworld continues to welcome guests to its cinemas across its global markets as normal, without disruption."
Online-only retailer boohoo said it has made a "strategic investment" in beauty products seller Revolution Beauty Group. It now has a 7.1% stake.
"The investment builds upon the existing relationship between boohoo and Revolution Beauty, under which Revolution Beauty products are sold through several of the group's direct to consumer brand websites and its online digital department store, Debenhams. The investment reflects boohoo's belief in the growth potential of Revolution Beauty and it intends to be a supportive stakeholder and long-term partner," boohoo explained.
Still to come in the international economics calendar on Wednesday, there are eurozone GDP and employment figures at 1000 BST, and US retail sales at 1330 BST. In the evening, the US Federal Reserve will release the minutes from its latest monetary policy meeting at 1900 BST.
Already out, UK inflation accelerated at the fastest pace in 40 years in July, numbers on Wednesday showed, hitting double-digits and heaping more pressure on the Bank of England.
The consumer price index surged 10.1% on an annual basis in July, topping FXStreet-cited market consensus of 9.8% and quickening from 9.4% in June.
According to the Office for National Statistics, it was a fresh high for the annual inflation rate in the current series, which began in January 1997. Modelling would suggest the last time inflation was this red-hot was in 1982, 40 years ago.
The pound was quoted at USD1.2112 early Wednesday in London, up from USD1.2099 late Tuesday.
"While the pound is yet to react aggressively, the chances of stronger action from the central bank should be a bullish signal for sterling," Ebury analyst Matthew Ryan commented.
The euro stood at USD1.0166, down from USD1.0177. Against the yen, the dollar was trading at JPY134.51, up from JPY134.28.
In Tokyo on Wednesday, the Nikkei 225 closed 1.2% higher, while the S&P/ASX 200 in Sydney rose 0.3%. In China, the Shanghai Composite was 0.4% higher in late dealings. The Hang Seng in Hong Kong was up 0.8%.
Gold stood at USD1,777.67 an ounce early Wednesday, up from USD1,774.80 at the London equities close on Tuesday. Brent oil was quoted at USD93.16, up from USD93.04.
By Eric Cunha; ericcunha@alliancenews.com
Copyright 2022 Alliance News Limited. All Rights Reserved.
