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(Alliance News) - Stock prices in London are seen opening slightly higher on Tuesday, tracking gains in Asian equity markets overnight, as investors continued to monitor the crisis in Ukraine and surge in oil prices.
In early company news, DIY retailer Kingfisher raised its annual dividend as demand for home improvement projects remained robust. Digital automotive platform Auto Trader made an acquisition to move into leasing. Online beauty products retailer THG took steps to improve its corporate governance.
IG futures indicate the FTSE 100 index is to open 9.41 points higher at 7,451.80. The blue-chip index closed up 37.66 points, or 0.5%, at 7,442.39 on Monday.
Kingfisher said it delivered a strong financial performance in financial 2021 boosted by a lockdown boom in DIY projects that has continued.
For the financial year that ended January 31, pretax profit was up 33% to GBP1.01 billion from GBP756 million the year before, as sales rose 6.8% to GBP13.18 billion from GBP12.34 billion.
Kingfisher said that financial 2022 was a year of record revenue, profit and that it was gaining market share in the UK and France. It said its B&Q chain had an "outstanding year", with sales passing GBP4 billion. It was also a record year of expansion for Screwfix, with 70 new stores opened in the UK and Ireland, and Screwfix France showing promising early progress.
Turning to shareholder returns, Kingfisher raised its annual payout by 50% to 12.40 pence per share from 8.25p paid out the year before.
Kingfisher said first quarter like-for-like sales were down 8.1% from the year before, but up 16% from two years earlier.
"We are now over two years into our new strategy and execution is ahead of schedule. With the business in a strong position, we are accelerating our investments for growth - through the launch of our scalable e-commerce marketplace, the expansion of Screwfix in the UK and France, new store openings in Poland, and our plans to increase our trade customer base," said Chief Executive Officer Thierry Garnier.
"Looking forward, we are confident that these investments, supported by continued strong execution and the new demand-drivers we are seeing in our industry, will drive faster growth in sales, profit and free cash flow."
Auto Trader said it has agreed to acquire UK-based vehicle leasing digital platform Autorama to expand its existing leasing proposition.
Auto Trader will pay an initial GBP150 million in cash, with a further GBP50 million of deferred consideration to be settled in shares subject to performance conditions.
Auto Trader explained there was a large structural opportunity for a new car leasing marketplace driven by the growth of electric cars, new manufacturers entering the UK market, lower take up of company car schemes, and a shift towards new digital distribution models. Leasing provides consumers a cost-effective way to access a new car, it said.
CEO Nathan Coe said: "To ensure we have the largest choice of cars to buy online, we could not ignore the growing demand for leasing deals...This acquisition will strengthen our leasing business and will enable us to offer both the biggest choice of vehicles and a seamless digital experience from search to sale."
Softcat reported interim profit growth ahead of expectations and strong cash generation.
For the six months that ended January 31, pretax profit increased to GBP64.2 million from GBP57.0 million a year before, on revenue of GBP770.9 million, up from GBP577.0 million.
Softcat declared an interim dividend of 7.3p, up 14% from 6.4p the year before.
Softcat said the drivers of income growth have been broad-based, with good progress made in all customer segments and across each of software, hardware and services. Further, its performance has been achieved against the backdrop of supply chain challenges which it said remain manageable but are contributing to a relatively modest backlog of hardware orders.
"Operating profit in the first six months of the financial year has been ahead of the board's initial expectations. While the current geopolitical and macroeconomic volatility make it more difficult to forecast performance, because of the outperformance in the first half the board now believes that the outturn for the full year will be ahead of previous estimates," the company said, looking ahead.
THG said founder Matthew Moulding will relinquish his position as executive chair, but will remain CEO. The beauty products platform has appointed Charles Allen as independent non-executive chair, starting immediately. Allen currently is chair of construction firm Balfour Beatty and previously was CEO of ITV and Granada.
"Charles has a clear mandate to refresh THG's board and further strengthen governance and diversity. In addition to reviewing the independent board, Charles will be working with Matthew in developing the management team, as well as refining the group's strategy," THG said.
In Asia on Tuesday, the Japanese Nikkei 225 index closed up 1.5%. Tokyo reopened after being closed for a holiday on Monday. In China, the Shanghai Composite was up 0.3%, while the Hang Seng index in Hong Kong was up 2.5%. The S&P/ASX 200 in Sydney closed up 0.9%.
"Market sentiment has remained steady despite a frightening mix of macro risks. The one positive factor for investors has been Chinese authorities more proactively supporting asset markets in recent days," said SPI Management's Stephen Innes.
Ukrainian leader Volodymr Zelensky said all issues would be on the table if Russia's Vladimir Putin agrees to direct talks to end the war, including contested Crimea and Donbas, but he warned his country would be "destroyed" before it surrenders.
On the ground, there was no let-up in the violence, with Kyiv under a new 35-hour curfew after Russian strikes reduced a Kyiv shopping mall to rubble, and the Pentagon saying Moscow was stepping up air and sea operations.
US President Joe Biden meanwhile warned that Putin was considering using chemical and biological weapons in Ukraine as he held talks with European leaders on what he called Moscow's increasingly "brutal tactics".
Nearly a month into the conflict, there has been little progress in talks between the two sides, and Zelensky has repeatedly urged direct discussions with his Russian counterpart. He insisted again on Monday that a meeting with Putin "in any format" was needed to end the war.
The pound was quoted at USD1.3140 early Tuesday, down from USD1.3192 at the London equities close Monday.
The euro was priced at USD1.0975, down from USD1.1033. Against the yen, the dollar was trading at JPY120.43 in London, higher against JPY119.25.
Brent oil was quoted at USD118.24 a barrel Tuesday morning, up sharply from USD114.84 a barrel late Monday. Gold stood at USD1,934.05 an ounce, slightly lower against USD1,936.69.
Oil prices were higher as EU nations discussed following Washington in placing an embargo on Russian energy imports for its war in Ukraine.
Tuesday's economic calendar has eurozone construction output at 0900 GMT.
By Arvind Bhunjun; arvindbhunjun@alliancenews.com
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