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(Alliance News) - Stock prices in London are seen opening higher on Thursday following a positive US close overnight, with investor attention set to turn to the European Central Bank's interest rate decision in the afternoon.
In early company mews, events organiser Informa swung to a hefty loss due to the Covid-19 pandemic. Housebuilder Taylor Wimpey said trading continued to be helped by UK government support measures. Domino's Pizza reported a positive first quarter.
IG futures indicate the FTSE 100 index is to open 30.31 points higher at 6,925.60. The blue-chip index closed up 35.42 points, or 0.5%, at 6,895.29 Wednesday.
Informa swung to an annual loss as event cancellations hurt the publishing and exhibitions firm, but it pointed to a recovery as global vaccination programmes rollout.
For 2020, Informa swung to a pretax loss of GBP1.14 billion after posting a profit of GBP318.7 million in 2019, as revenue slumped 43% to GBP1.66 billion from GBP2.89 billion in the prior year.
The revenue figure was in line with market forecasts. In its own guidance, given at the beginning of January, the FTSE 100-listed company had said it expected 2020 revenue to be in a range of GBP1.65 billion to GBP1.68 billion
Informa said the disruption to its physical events portfolio due to the coronavirus pandemic led to the decline in revenue.
Informa swung to a statutory operating loss of GBP880.4 million for 2020 following an operating profit of GBP538.1 million in 2019. This, it said, reflected the reduction in revenue as well as an increase in adjusting items, with a significant proportion relating to a non-cash goodwill impairment of GBP592.9 million.
No dividend was paid for 2020.
Looking ahead, Informa views 2021 as a "transition year", with continued growth in both Subscriptions-led businesses and further expansion in B2B digital services, supported by a progressive return in B2B physical events. The company pointed to an easing of Covid-19 restrictions and customer confidence rebuilding as reasons for optimism.
"This transition year will be defined by continued strength and improving growth in our subscriptions-led businesses, further growth in B2B digital services and a progressive reopening of physical events, led by mainland China and North America, which will ensure we deliver our revenue commitments for 2021, and remain cashflow positive throughout," said Chief Executive Officer Stephen Carter.
Informa confirmed its commitment for baseline revenue of GBP1.7 billion 2021, with any improvement to that depending on the "pace and scale of return of physical events outside of mainland China".
Taylor Wimpey said the UK housing market has remained healthy in 2021, supported by continued strong customer demand, low interest rates, good mortgage availability, and ongoing government support, particularly for first-time buyers.
Taylor Wimpey said the transition into the next phase of Help to Buy "has progressed smoothly" and has experienced strong customer demand for homes under the new scheme.
As at April 18, the total order book value stood at GBP2.81 billion, up from GBP2.67 billion at the same time last year. This represents 10,995 homes, up from 10,853 homes.
Taylor Wimpey said it has made good early progress on 2021 priorities, including driving operating profit margin and an enhanced cost control mindset across the business. It reiterated its operating profit margin target of 21% to 22% in the medium term.
"Despite the continuation of national restrictions in the first few months of the year, customer demand for new housing has remained resilient. The extension of the stamp duty land tax holiday and the announcement of the 95% mortgage guarantee scheme demonstrate that housing remains a priority for the UK government. Trading is in line with expectations and we remain on track to deliver against our guidance set out at our 2020 full year results in March," the company said.
Domino's Pizza Group said trading in the first quarter has been strong, with "exceptional trading over the new year period".
For the first quarter to March 28, UK & Ireland system sales were GBP371.3 million, up 19% on the first quarter of last year.
Domino's said sales performance of the delivery business has been "particularly good", more than offsetting the lower sales within the lockdown-hit collection business.
At an order count level, Domino's said it has seen delivery growth of 6.8% in the quarter, with collection reporting some recovery, now trading at 65% of 2019 levels.
"We are pleased with the strong performance of the business in the first quarter of the year. The investments we are making to deliver our multi-year strategic plan give us confidence in our ability to capitalise on the opportunities which lie ahead as the nation begins to emerge from the Covid-19 lockdown restrictions," said CEO Dominic Paul.
The Japanese Nikkei 225 index closed up 2.4% on Thursday. In China, the Shanghai Composite was down 0.4%, while the Hang Seng index in Hong Kong was up 0.4%. The S&P/ASX 200 in Sydney closed 0.7% higher.
Wall Street ended higher as well on Wednesday. The Dow Jones Industrial Average closed up 0.9%, S&P 500 up 0.9% and Nasdaq Composite up 1.2%.
Tokyo led the Asian stock bounce despite an escalating coronavirus outbreak just three months before Japan hosts the pandemic-delayed Olympics. Organisers said they may hold off on a planned announcement this month to dictate how many domestic spectators can attend the event in light of the virus situation, after earlier barring overseas fans.
This year's Tokyo Motor Show has been cancelled for the first time ever because of the corona virus, Japan's auto industry group said Thursday. The biennial car show - one of Japan's biggest industrial events - had been scheduled for the autumn, after the Tokyo Olympics take place this summer.
"After two days of declines, US markets turned around yesterday, reversing most of their Tuesday losses, with the likes of the Russell 2000 and the Nasdaq leading the way. While the about-turn is a welcome respite from the start of the week, the rebound can't disguise the divergence taking place in various countries when it comes to vaccination levels and infection rates," said CMC Markets analyst Michael Hewson.
"This turnaround looks set to see markets here in Europe open higher, ahead of today's European Central Bank rate meeting," Hewson added.
Investors were keeping watch for the European Central Bank meeting due later Thursday after the Bank of Canada on Wednesday said that it would bring forward its rate hike forecasts to next year and pare back pandemic asset purchases.
"All eyes will be on the European Central Bank today as it makes a decision on its monetary policy. Market players aren't expecting any sort of fireworks at this event, and it is very likely that risk balance may not change when the President of the European Central Bank, Christine Lagarde, speaks later today. The bank isn't likely to have a full assessment of the pace of asset purchases until summer," said AvaTrade analyst Naeem Aslam.
The ECB decision is at 1245 BST, followed by a press conference with President Christine Lagarde at 1330 BST, though no change to policy is expected.
Also in focus on Thursday, will be the latest US jobless claims figures at 1330 BST.
The pound was quoted at USD1.3933 early Thursday, slightly lower from USD1.3937 at the London equities close Wednesday.
The euro stood at USD1.2037, flat from USD1.2034. Against Japanese yen, the dollar was quoted at JPY108.00, marginally lower from JPY108.08.
Brent oil was quoted at USD64.90 a barrel Thursday morning, down sharply from USD65.90 at the London equities close Wednesday. Gold was priced at USD1,790.55 an ounce, lower from USD1,792.76.
By Arvind Bhunjun; arvindbhunjun@alliancenews.com
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