(Alliance News) - Stock prices in London are seen opening lower on Thursday amid the lack of progress in negotiations over a US pandemic relief package and ahead of the latest US jobless claims figures.
In early company news, Ladbrokes betting chain owner GVC Holdings scrapped its interim dividend due to uncertainty caused by Covid-19, as store closures and cancellations of sports events hit earnings. Luxury timepiece retailer Watches of Switzerland said it was encouraged by its first year as a public company. Transport firm National Express reported a drop in profit as lockdown restrictions hit demand.
IG futures indicate the FTSE 100 index is to open 52.02 points lower at 6,228.10. The blue-chip index closed up 125.87 points, or 2.0%, at 6,280.12 on Wednesday.
GVC Holdings said it was encouraged by its first-half performance despite a challenging backdrop due to the coronavirus pandemic.
For the half-year ended June 30, net gaming revenue was down 11% to GBP1.61 billion from GBP1.81 billion a year before, and underlying pretax profit was down 75% to GBP55.4 million from GBP212.1 million. On a reported basis, GVC swung to a pretax profit of GBP22.7 million from a GBP12.3 million loss a year before.
UK retail like-for-like net gaming revenue was down 50% to GBP277.9 million, which the company attributed to cancelled sporting events due to lockdown restrictions.
GVC scrapped its interim dividend, having paid out 17.6 pence last year, citing uncertainty brought about by Covid-19.
Looking ahead, GVC expects to deliver underlying EBITDA of GBP720 million to GBP740 million for the full year. In 2019, GVC recorded underlying EBITDA of GBP678.3 million.
Watches of Switzerland said it delivered a strong performance in its maiden year as a public company.
For the financial year ended April 26, revenue was up 6% to GBP819.3 million from GBP797.7 million in financial 2019, and adjusted pretax profit was GBP49.4 million, up from GBP26.5 million.
For financial 2021, Watches of Switzerland expects revenue in a range between GBP840 million to GBP860 million, on the basis of a continued strong luxury watch market in the UK and US.
"While we began 2021 with our global store portfolio closed due to the pandemic, we were well prepared for the re-opening of our stores during Q1 and trading has exceeded our expectations in both the UK and the US. The UK has been driven by continued strong e-commerce sales and domestic demand in regional stores, partly offsetting greater declines in London (due to reduced tourism) and our airport stores. The US continued to gain momentum during the period with all re-opened stores performing strongly versus the prior year," said Chief Executive Brian Duffy.
"This continued strong performance is testament to our long-standing brand partnerships, focus on exceptional customer experience, well-established multi-channel leadership and the strong fundamentals of the luxury watch category in our markets, where demand continues to exceed supply," Duffy added.
National Express said 2020 had started extremely well with outstanding results in January and February; however Covid-19 then had an immediate and unprecedented effect on all of its transport businesses.
For the half-year ended June 30, revenue was GBP1.03 billion, down 23% from GBP1.34 billion last year, and the company swung to a pretax loss of GBP122.2 million, from a GBP88.4 million profit last year.
Looking ahead, given the uncertainty on the duration of Covid-19, National Express said it is not currently providing profit guidance for 2020.
"When we do emerge out of the pandemic the world will be confronted with the need to power an economic recovery with high quality, cleaner and greener public transport at its heart. The alternative is inefficient, congested towns and cities with dirty air. As our stand-out successes in Spanish concession renewals and recent North American School Bus bids have shown, National Express' reputation for operational and customer excellence - alongside our strengthened balance sheet - means we are well positioned to prosper in the future," said CEO Dean Finch.
Looking to the UK, equity market investors are hopeful that Congress will eventually agree on a new pandemic deal despite long-running animosity between Democrats and Republicans.
However, both sides are blaming each other for the lack of progress, with Treasury Secretary Steven Mnuchin saying House Leader Nancy Pelosi would not budge unless the Democrats' demand for spending of at least USD2 trillion is met.
That is well down from the USD3.5 trillion initially proposed by Democrats but Republicans say they are unwilling to shift from their USD1 trillion plan.
Investors also are looking ahead to this weekend's US-China talks to review their trade pact signed in January. There has been worry that rising tensions between the superpowers could scupper the agreement, which ended a painful and long-running trade war that battered the global economy.
The pound was quoted at USD1.3070 early Thursday, up from USD1.3044 Wednesday's equities close in London.
The euro was priced at USD1.1814, up from USD1.1794. Against the yen, the dollar was quoted at JPY106.70, soft from JPY106.94 in London.
Brent oil was trading at USD45.34 a barrel Thursday morning, firm from USD45.26 a barrel Wednesday evening.
Gold was quoted at USD1,931.52 an ounce, lower from USD1,948.50 an ounce at the close Wednesday.
The Japanese Nikkei 225 index closed up 1.9%. In China, the Shanghai Composite is up 0.5%, while the Hang Seng index in Hong Kong is flat.
In the economic calendar on Thursday, there are the closely watched weekly US jobless claims at 1330 BST, alongside US import and export price figures.
By Arvind Bhunjun; firstname.lastname@example.org
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