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(Alliance News) - Stock prices in London are seen opening marginally lower on Monday bucking a more positive trend seen overnight in Asia amid fears over the spread of the Delta variant of Covid-19.
Spiking infections around the world from the variant are forcing some countries, including China, to reimpose lockdowns and other containment measures.
In early company news, fund supermarket Hargreaves Lansdown hailed a record year as younger investors flocked to its platform. Philip Morris International raised its offer for Vectura. Life-saving technology company Halma has made a series of acquisitions. Shipping services provider Clarkson posted robust interims.
IG futures indicate the FTSE 100 index is to open 9.55 points lower at 7,113.40. The blue-chip index closed up 2.52 points at 7,122.95 on Friday.
Hargreaves Lansdown said it delivered a record performance and exceptional growth during an "extraordinary and challenging year", as it welcomed a record 233,000 net new clients in the year.
During the recent 12 months, Hargreaves said it benefited from market volatility that has been the "inevitable outcome" of a challenging year.
"Investor confidence started the year at a low but swung dramatically on the positive news of Covid vaccines and the political certainty provided by the US election and Brexit," said Chief Executive Officer Chris Hill.
For the financial year that ended June 30, revenue rose 15% to GBP631.0 million from GBP550.9 million last year, but pretax profit was GBP366.0 million, down 3.0% from GBP378.3 million.
The Bristol-based firm reported strong growth in assets under administration, which were up 30% to GBP135.5 billion from GBP104.0 billion. Net new business inflows were up 13% to GBP8.7 billion from GBP7.7 billion.
Hargreaves Lansdown declared a total dividend of 50.5 pence per share, down from 54.9p paid out in financial 2020. It also declared a special dividend of 12.0p.
The company said it is seeing a change in the demographic mix of its clients, with 83% of new clients under the age of 55. Further, it said it saw high levels of engagement from the "trading phenomenon around GameStop and so-called meme stocks".
Looking ahead, CEO Hill said: "With this continued investment in our people, proposition, service and technology as well as the cost of servicing an enlarged and growing client base, we expect 2022 costs to reflect this investment and continue to be broadly aligned to client growth.
"The impact of Covid on individuals, businesses and the economy still provides an uncertain backdrop to the current year. As we have eased out of lockdown and entered the summer months, we have seen a slowdown in dealing volumes and client activity versus the elevated levels this time last year, which is also normal for this time of year and in line with management expectations. However, given our enlarged client base, we would still expect to see stronger client activity in 2022 versus 2020 (which also included a few months of elevated activity during the peak of the pandemic period) and the breadth of proposition and client focus gives us confidence that as the year progresses, we will continue to win in this growing market."
Philip Morris International raised its bid for asthma treatment firm Vectura to 165 pence per share, besting the 155p offer from private equity firm Carlyle to which Vectura had agreed on Friday. The new offer values Vectura at GBP1.02 billion. PMI previously had offered 150p per Vectura share.
Halma said it has completed three acquisitions for a total of GBP48.8 million and sold electronic security systems provider Texecom for GBP65 million.
In the Safety sector, Halma acquired the Ramtech Group for GBP15.5 million in cash. In the Environmental & Analysis sector, Halma's pipeline inspection systems business, Mini-Cam, acquired Dancutter, a Danish designer and manufacturer of trenchless pipeline rehabilitation equipment for EUR18 million.
Halma also bought Sensitron, a gas detection company based in Milan, Italy, for EUR21 million in cash.
CEO Andrew Williams commented: "I am pleased that we have continued to find exciting new companies to join Halma. Each acquisition is strongly aligned with our purpose and financial model and will bring complementary capabilities including new technologies and broader market reach. We look forward to working with the leadership groups of Ramtech, Dancutter and Sensitron as they seek to grow their businesses over the long term.
"It is also pleasing to have found a new home for Texecom, so that it can continue to invest and grow under the existing management team, who have served Halma well over many years. We wish them and the whole Texecom workforce every success for the future under their new ownership."
Shipping services firm Clarkson reported a robust set of interim earnings with strong trading across all areas of the business.
For the six months to June 30, revenue was GBP190.1 million, up 5.4%, GBP180.4 million last year, and pretax profit rose 31% to GBP27.3 million from GBP20.9 million.
The company declared an interim dividend of 27p, up 8% from 25p paid out at the halfway stage last year.
CEO Andi Case said: "The company generated significantly increased profits in the first half of the year, aided by a robust performance in our Broking division and a strong recovery from our Financial division. I am also excited by the progress and momentum that our Sea/ platform is building.
"We are confident in the outlook for Clarksons, which is well placed to capitalise on an improving demand-supply dynamic within shipping, offshore and renewables and from the wider global economic recovery."
In the US on Friday, Wall Street ended mostly higher following an upbeat jobs report. The Dow Jones Industrial Average ended up 0.4% and the S&P 500 up 0.2%, but the Nasdaq Composite closed down 0.4%.
CMC Markets analyst Michael Hewson said: "While we've seen a degree of optimism return to the US labour market and the US economy, concerns are rising over the Chinese economy which has been showing some worrying signs of weakness in recent weeks, amidst reports of increasing outbreaks of Delta variant cases which are reportedly prompting lockdowns across various parts of the country.
"As we look ahead to a new week, Asia stocks have started the week on the front foot, as investors there play catch up on Friday's payroll gains, however European stocks look set for a slightly softer beginning."
In China on Monday, the Shanghai Composite was up 1.0%, while the Hang Seng index in Hong Kong was up 0.6%. Financial markets in Japan were closed on Monday for the Mountain Day holiday. The S&P/ASX 200 in Sydney ended flat.
Chinese factory inflation rose by more than expected in July, data showed Monday, as surging commodity prices offset government measures to temper costs.
The producer price index, which measures the cost of goods at the factory gate, rose to 9.0% on-year, the same as May, which was a 13-year high, according to the National Bureau of Statistics.
While the PPI remains elevated, consumer inflation ticked down to 1.0% in July, with officials stressing their work to stabilise prices in the wake of recent disasters including floods in central China and with companies appearing to absorb the increases instead of passing them on to consumers.
The pound was quoted at USD1.3887 early Monday, up from USD1.3862 at the London equities close Friday.
On the political front, allies of Rishi Sunak have insisted he is focused on the health of the UK economy in his job as chancellor following reports Prime Minister Boris Johnson has considered demoting him.
The Sunday Times reported that a furious Johnson suggested the move after the leak of a letter from the chancellor calling for the easing of travel restrictions ahead of the relaxations announced on Wednesday.
A senior source told the newspaper: "He said: 'I've been thinking about it. Maybe it's time we looked at Rishi as the next secretary of state for health. He could potentially do a very good job there.' "In an open meeting, after ranting about Rishi, he then suggested the chancellor could be demoted in the next reshuffle."
The newspaper reported that Johnson is not expected to carry out his threat and noted the prime minister's reputation for off-the-cuff remarks made "half in jest".
The euro was priced at USD1.1764, marginally higher from USD1.1760. Against the Japanese yen, the dollar was trading at JPY110.12, down from JPY110.30.
Brent oil was quoted at USD69.11 a barrel Monday morning, down from USD70.92 late Friday. Gold was trading at USD1,744.16 an ounce, down from USD1,764.55.
By Arvind Bhunjun; arvindbhunjun@alliancenews.com
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