(Alliance News) - Stock prices in London are seen opening higher on Tuesday after European leaders finally agreed on a coronavirus rescue package following days of fraught negotiations.
In early company news, home phone and broadband provider TalkTalk Telecom said revenue fell in the first quarter partly due to the Covid-19 crisis. Gaming company GVC Holdings expressed disappointment in the UK tax authority's decision to probe its former Turkish business. Business events and publishing firm Euromoney said it was hopeful of resuming dividend payments.
IG futures indicate the FTSE 100 index is to open 38.48 points higher at 6,300.00. The blue-chip index closed down 28.78 points, or 0.5%, at 6,261.52 on Monday.
TalkTalk Telecom said its first-quarter saw stable growth, strong cash conversion, and reduction in net debt.
For the quarter ended June 30, headline off-net revenue was GBP358 million, down 7.5% from GBP387 million in the first quarter of financial 2020. The company explained the decline was mainly due to Covid-19 disruption, including trading restrictions and cancellation of live sports, as well as ongoing industry-wide declines in Voice usage exacerbated by the lockdown.
TalkTalk said the revenue, and consequently margin, decline was offset by cost savings, with all key cost areas significantly lower year on year. Trading has recovered in June and July, with an improvement in average revenue per user, and TalkTalk thinks this improvement will continue through the rest of its financial year, driven by fibre and ethernet products.
The company added that the expected GBP15 million hit from Covid-19 "remains conservative" based on current bad debt trends in both its Consumer and B2B markets.
"As the UK's internet usage continues to soar, our role as the UK's only scale affordable provider of fibre broadband has become even more important. Given this, we see a positive outlook to the first half and are confident in our full-year plan to deliver stable to growing headline EBITDA with strong cash conversion," said Chief Executive Tristia Harrison.
GVC Holdings said it was surprised by the HM Revenue & Customs' decision to extend its investigation into the gaming company's former Turkish facing online gambling business. The Ladbrokes owner disposed of its Turkish business in December 2017.
GVC said that HMRC on Monday informed subsidiary GVC Holdings (UK) Ltd that it was widening the scope of its investigation and is now examining "potential corporate offending" by an entity within GVC, which HMRC has not yet identified.
"Both the [UK] company and GVC are surprised by the decision to extend the investigation in this way and are disappointed by the lack of clarity provided by HMRC as to the scope of its investigation. HMRC has not yet provided details of the nature of the historic conduct it is investigating, with the exception of a reference to section 7 Bribery Act 2010, nor has it clarified which part of the GVC group is under investigation. In the meantime, the company continues to co-operate fully with HMRC regarding the provision of information," GVC said.
Euromoney Institutional Investor said trading in the period since its half-year results has been in line with recent trends, and it is hopeful of resuming dividend payments.
Euromoney said it has "made excellent progress" in controlling costs, including reducing the committed costs that relate to previously announced cancelled and postponed events due to Covid-19.
Revenue for the nine months ended June 30, was GBP255.4 million, down 14% from GBP295.8 million a year before. The company attributed the drop in revenue to events cancelled and postponed as a result of Covid-19.
Euromoney added that its financial position remains strong. Net cash at the end of June 2020 increased to GBP13.9 million.
"The action we have taken to reduce costs and preserve cash supports our robust balance sheet. This, together with our high level of subscriptions, allows us to maintain investment in future growth. In addition, it will allow us to make further small acquisitions and supports the return to paying dividends, as soon as the board considers it can do so prudently," the company said.
BHP Group said annual petroleum production was marginally short of guidance, with lower gas demand due to Covid-19, but it met its targets for iron ore and metallurgical coal among others.
Petroleum production for its financial year ended June 30 was 109 million barrels of oil equivalent, a 10% drop from 2019. Guidance was for the bottom end of between 110 million and 116 million barrels of oil equivalent.
Copper production was 2% ahead of 2019, at 1.7 million tonnes. The company placed its copper production guidance under review in April but managed to meet the pre-review level of between 1.7 million and 1.8 million tonnes.
EU leaders on Tuesday approved a landmark stimulus package to fight the destructive aftershocks of the coronavirus outbreak that has sunk Europe into its deepest recession in history.
The euro stood at USD1.1440 Tuesday morning, flat from USD1.1441 at the European equities close Monday.
The EUR750 billion deal was sealed after four days and nights of intense negotiation that saw threats of walkouts and fierce resistance by the Netherlands.
"Deal!" tweeted EU Council Chief Charles Michel, whose job was to guide the tortuous talks over more than 90 hours.
The package, seen by AFP, was made possible by the crucial backing of Germany and France and includes the biggest-ever joint borrowing by the 27 members of the bloc, something that had been resisted by Berlin for generations.
Overall, the deal will dole out EUR390 billion in the form of grants to pandemic-hit countries. That was lower than an original EUR500 billion proposal made by France and Germany. Another EUR360 billion will be disbursed in loans, repayable by the member state.
In London, the pound was quoted at USD1.2668 Tuesday morning, up from USD1.2644 at the London equities close Monday.
UK Prime Minister Boris Johnson will assemble his Cabinet in person for the first time in four months on Tuesday as the government presses ahead with plans to secure millions of doses of a potential Covid-19 vaccine.
Senior ministers will meet in the Foreign & Commonwealth Office rather than the smaller Cabinet room in Downing Street to allow for proper social distancing.
It comes after a study suggested a Covid-19 vaccine being developed by the University of Oxford was safe and induces an immune reaction, which was branded "encouraging" by the scientific community.
Meanwhile, the UK and the EU resume talks on Tuesday, with the clock running down to a year-end deadline for a new post-Brexit deal to replace half a century of integration.
The latest round of negotiations takes place over three days in London, with a stalemate in key areas stoking fears of a no-deal scenario. Britain's chief negotiator David Frost and his EU counterpart Michel Barnier kicked off this week's talks with a joint dinner on Monday evening.
Their teams are set to discuss a host of issues, from fisheries and so-called level playing field rules on fair competition to law enforcement and judicial cooperation. Without a new agreement, the two sides would see ties reduced to minimum standards set by the World Trade Organization with high tariffs and serious disruptions to business.
Against the yen, the dollar was trading at JPY107.32, firm from JPY107.24 in London late Monday.
Brent oil was trading at USD43.36 a barrel, firm from USD43.00 at the London equities close Monday. Gold was quoted at USD1,817.70 an ounce, flat from USD1,816.37.
The Japanese Nikkei 225 index ended up 0.8%. In China, the Shanghai Composite is flat, while the Hang Seng index in Hong Kong is up 1.6%.
By Arvind Bhunjun; arvindbhunjun@alliancenews.com
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