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(Alliance News) - Stock prices in London are seen opening higher on Wednesday supported by optimism over global economic recovery, with a series of services PMI readings set to provide an updated picture of business conditions in Europe and the UK.
In early company news, speciality chemicals company Croda International acquired a French fragrances business. Irish carrier Ryanair Holdings said it expects a narrowed pretax loss for financial 2021. Food packaging company Hilton Food Group reported positive annual results.
IG futures indicate the FTSE 100 index is to open 13.85 points higher at 6,837.40. London's blue-chip index closed up 86.25 points, or 1.3%, at 6,823.55 Tuesday.
Croda International said its fragrances and flavours subsidiary, Iberchem, has agreed to acquire Grasse, France-based fragrance business Parfex for a total enterprise value of EUR45 million. Parfex creates fragrances mainly for premium personal care and fine perfumery markets.
Parfex is 82% owned by its founders with the remaining free float of shares listed on the Euronext Access market. Croda said it has agreed to acquire 93% of Parfex's outstanding shares, comprising the founding shareholders and some minority investors. Croda expects to acquire the total outstanding share capital, subject to a potential tender offer and subsequent de-listing. The deal is expected to close by the end of the second quarter of 2021.
"We believe that transitioning to more natural raw materials is a potential differentiator in the fragrance market. Parfex will play an important role in Iberchem's plans to increase its sustainable fragrance offerings and further enhances our position in the creation of higher-value fine fragrances," said Croda Chief Executive Officer Steve Foots.
Ryanair Holdings said for the financial year that ended March 31, it expects to report a pre-exceptional net loss of between EUR800 million and EUR850 million, narrowed from the previously guided range of EUR850 million to EUR950 million.
Ryanair said it carried 27.5 million passenger in financial 2021, down from 149 million in financial 2020, due to flight cancellations and travel restrictions related to Covid-19.
Easter travel restrictions and lockdowns alongside a delayed traffic recovery into the peak summer 2021 season, due to the slow rollout in the EU of Covid-19 vaccines, means that 2022 traffic is likely to be towards the lower end of the previously guided range of 80 million to 120 million passengers, Ryanair noted.
"While it is not possible (at this time) to provide meaningful 2022 profit guidance, we do not share the recent optimism of certain analysts as we believe that the outcome for 2022 is currently close to breakeven," Ryanair said.
Hilton Food Group said it delivered resilient annual results, underpinned a strong performance with both volume and profit growth.
The food packaging business highlighted that lockdowns, including travel restrictions, resulted in more cooking at home - thereby creating higher demand for its products.
For the financial year that ended January 3, revenue was GBP2.77 billion, up 53% from GBP1.81 billion the year before, and pretax profit was GBP54.0 million, up 25% from GBP43.2 million.
Hilton Food raised its total dividend by 22% to 26.0 pence from 21.4p.
"In 2020 volumes grew strongly in Australia as well as benefiting from the shift to home consumption arising from the pandemic maintaining a trend of continuous growth achieved in every year since Hilton's flotation in 2007. There was strong growth in operating profit and earnings per share despite Covid related costs," the company explained.
Looking ahead, Hilton Food said its operating performance since the beginning of 2021 has been in line with the board's expectations. In addition, it continues to explore opportunities for further expansion in domestic and overseas markets.
The call for a higher open in London stems in part from latest international growth forecasts from the International Monetary Fund.
The IMF on Tuesday endorsed the view of a strong global economic rebound by hiking its 2021 growth forecast for the second time in three months, predicting a 6.0% expansion, from its 5.5% prior estimate.
"Early signs show the recovery is accelerating, suggesting a faster return to 'normal' than many had dared to hope a few months ago," said JPMorgan Asset Management's David Kelly.
In addition, a fall in Covid-19 cases was boosting sentiment in London, with the number of patients in hospital in England with the virus dropping to its lowest level for six months, figures showed.
A total of 2,588 patients were in hospital at 8am on April 6, according to figures from NHS England. This is the lowest since 2,435 on October 4, and is down 92% from a record 34,336 on January 18.
During the first wave of the virus, patient numbers peaked at 18,974 on April 12. The South East and South West are reporting numbers down 96% on their second-wave peak, while eastern England has seen its number drop by 95%.
Patient numbers in London and the Midlands have fallen 92% since the second-wave peak, the North West is down 89%, and the combined region of the North East and Yorkshire has decreased 88%. Hospital admissions in England of patients with Covid-19 are at their lowest level for nearly seven months.
The pound was quoted at USD1.3775 early Wednesday, down from USD1.3848 at the London equities close on Tuesday.
The euro was priced at USD1.1879, up from USD1.1843. Against the yen, the dollar was trading at JPY109.75, lower from JPY109.83.
Brent oil was quoted at USD62.77 a barrel on Wednesday morning, down from USD63.42 late Tuesday in London. Gold was trading at USD1,739.10 an ounce, lower against USD1,744.00.
The Japanese Nikkei 225 index ended up 0.1%. In China, the Shanghai Composite was down 0.6%, while the Hang Seng index in Hong Kong was down 0.8%.
The economic events calendar on Wednesday has service PMI data, with France at 0850 BST, Germany at 0855 BST, eurozone at 0900 BST, and the UK at 0930 BST. Elsewhere, minutes from the most recent US Federal Reserve meeting are released at 1900 BST.
By Arvind Bhunjun; arvindbhunjun@alliancenews.com
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