(Alliance News) - Stock prices in London are seen opening marginally higher on Wednesday following slight gains on Wall Street overnight, as investors were buoyed by optimism over a strong economic recovery despite fears over rising virus cases around the world.
In early company news, electrical goods retailer Dixons Carphone reinstated its dividend, as public transport firm Stagecoach pulled its own payout. Drugmaker Indivior upped its guidance.
IG futures indicate the FTSE 100 index is to open 7.05 points higher at 7,094.60. The blue-chip index closed up 14.58 points, or 0.2%, at 7,087.55 on Tuesday.
Dixons Carphone said it delivered a strong performance in a challenging year that saw stores forced to close due to lockdown restrictions
For the financial year that ended May 1, Dixons Carphone swung to a pretax profit of GBP33 million from a GBP140 million pretax loss last year on revenue of GBP10.3 billion, up 1.0% from GBP10.2 billion.
The retailer - which is set to move this year to the single brand of Currys - also restarted the payment of dividends to shareholders and declared a full-year payout of 3.0 pence.
Looking ahead, Dixons Carphone expects an operating profit margin of at least 4.0% by 2024. It also expects positive cashflow from UK & Ireland Mobile unit over 2021 to 2024 to be at least GBP200 million, up from the previously guided GBP125 million to GBP175 million range.
"Technology has become even more central to people's lives. As the market leader, with the winning omnichannel business model, we can make the most of that. The past year has seen us do so, growing a big online business and adding it to our in-store strengths. We're now financially stronger too, allowing us to pay back over GBP200 million to governments and to recommence our dividend," said Chief Executive Officer Alex Baldock.
Drug maker Indivior said it was raising 2021 guidance to reflect increasing business momentum.
Indivior expects higher annual net revenue in the range of USD705 million to USD740 million, up from the previously guided up to USD625 million, reflecting a stronger Sublocade performance. Group net revenue was USD647 million in 2020, which was down 18% from USD785 million in 2019.
Net revenue from Sublocade for 2021 is expected to be in the range of USD210 million to USD230 million, up from USD185 million to USD210 million previously guided, based on stronger demand and a large order from a new criminal justice system customer worth USD7 million.
Sublocade is Indivior's lead treatment for opioid addiction.
Stagecoach Group reported a drop in annual earnings as the bus, coach and train operator was hurt by Covid-19 restrictions.
For the financial year that ended May 1, pretax profit was down sharply to GBP24.7 million from GBP40.6 million the year before as revenue dropped to GBP928.2 million from GBP1.42 billion.
Stagecoach said that, due to continuing uncertainties caused by Covid-19, it was not proposing any dividends for the financial year.
CEO Martin Griffiths said: "We have good liquidity, strong fundamentals and excellent ESG credentials. We are proud to have finalised our new long-term sustainability strategy and to be a partner in the UK's first all-electric bus city in Coventry. Our sustainability strategy is a critical part of the overall strategy for our business, setting out our vision through to 2035. Our plans are designed to make a difference for the people we employ, the communities we serve every day, and our environment and natural resources.
"Looking ahead, we see a positive outlook as our bus, coach and tram services play a critical role in tackling climate change, delivering economic recovery, and ensuring healthier and more connected communities."
Vaccine optimism helped US stocks end higher on Tuesday after Moderna said its jab produced protection against the Delta strain that has spread rapidly around the world and accounts for an increasing number of new infections.
The Dow Jones Industrial Average and S&P 500 closed marginally higher. The Nasdaq Composite finished up 0.2%. The S&P and Nasdaq Composite once again ended at record-setting levels.
The Japanese Nikkei 225 index closed down 0.1% on Wednesday. In China, the Shanghai Composite was up 0.6%, while the Hang Seng index in Hong Kong was down 0.1%. The S&P/ASX 200 in Sydney closed up 0.5%.
"Wall Street looks to have moved to the side-lines ahead of the month, and quarter-end flows and ahead of PMI [on Thursday] and employment data [on Friday]. Those same flows will be at work today in Europe, but I expect a modestly positive start after markets shrugged off the virus blues yesterday," said Oanda Markets analyst Jeffery Halley.
Chinese factory activity stabilised in June, data showed Wednesday, but output was hit by supply shortages of key commodities and microchips as well as the coronavirus-induced closure of a key port that caused huge delivery delays.
The official purchasing managers' index, a key gauge of manufacturing activity in the world's second-largest economy, came in at 50.9 in June from May's 51.0, the National Bureau of Statistics said.
While the reading has been edging down for three straight months, it appears to be levelling out. It was also broadly in line with forecasts and continued to stay above the 50 point mark that separates growth from expansion.
The pound was quoted at USD1.3852 early Wednesday in London, up from USD1.3840 at the London equities close Tuesday.
The euro stood at USD1.1903, marginally lower from USD1.1908. Against the yen, the dollar was trading at JPY110.50, flat from JPY110.48.
Brent oil was quoted at USD75.07 a barrel on Wednesday morning, slightly lower from USD75.11 at the London equities close Tuesday. Gold was priced at USD1,758.32 an ounce, down from USD1,760.21.
The international economic events calendar on Wednesday has German unemployment at 0855 BST and eurozone inflation at 1000 BST, with US ADP employment at 1315 BST.
By Arvind Bhunjun; arvindbhunjun@alliancenews.com
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