(Alliance News) - Stock prices in London are seen opening flat on Wednesday, as optimism following Russia's pledge to de-escalate in parts of Ukraine was met with scepticism by the West.
IG futures indicate the FTSE 100 index is to open just 2.5 points higher at 7,539.75. The blue-chip index closed up 64.11 points, or 0.9%, at 7,537.25 on Tuesday.
In early UK corporate news, Electrocomponents announced a name change and said it expects annual revenue and margins will be at the upper end of market estimates. Aviation services firm John Menzies accepted a formal takeover offer. Keyword Studios posted an annual earnings rise amid a "buoyant video games industry".
Electrocomponents, ahead of an investor day on Wednesday, said it expects annual revenue and operating profit margin to be at the top end of current consensus estimates.
Electrocomponents ends its financial year on Thursday.
The London-based distributor of industrial and electrical parts said trading in recent weeks has been in line with what it reported for the nine weeks to March.
During that period, revenue grew 22% on a like-for-like basis compared to a year earlier.
In addition, the firm said it will change its name to RS Group PLC in "early May".
Chief Executive Lindsley Ruth said: "We have come a long way since I joined the company in 2015. Through the efforts of our people, we have collectively transformed the performance and aspirations of our business. Our investor event will outline our journey to greatness - a plan to benchmark our business against the highest global standards and deliver best-in-class growth and returns.
"To mark this change, we will be moving forward from Electrocomponents PLC to RS Group PLC in early May. RS is our primary customer brand, recognised by designers, builders and maintainers of industrial equipment and operations around the world. As RS Group we will bring our business together under one brand, united behind a common ambition and our single purpose: making amazing happen for a better world."
John Menzies said it has accepted an offer from GIL International Holdings V, a subsidiary of Kuwait's Agility Public Warehousing.
The deal, at 680 pence per share, values John Menzies at GBP571 million on a fully diluted basis and offers an enterprise value of GBP763 million.
The consideration is 81% higher than the company's share price of 335p on February 8, the day before it entered an offer period. It is 19% higher than its 570p closing price on Tuesday.
Menzies has a market capitalisation of GBP523.9 million.
Agility will combine Menzies with its National Aviation Services unit.
"The Menzies board, which has been so advised by Goldman Sachs International as to the financial terms of the acquisition, consider the terms of the acquisition to be fair and reasonable," a statement read.
The deal ends a long-running saga. Back in early-February, Menzies said it rejected a 510p bid from its Kuwaiti suitor. It followed a previous unsolicited cash offer of 460p a share, the company explained.
In early March, the cargo handling firm gave Agility an extension on the deadline to make a formal takeover offer.
That so-called put-up-or-shut-up deadline was due to end on Wednesday.
Elsewhere in London, video game services firm Keywords Studios posted double-digit growth in revenue and profit.
In 2021, revenue rose 37% to EUR512.2 million from EUR373.5 million. Pretax profit jumped 48% to EUR48.0 million from EUR32.5 million.
Keywords recommended a final 1.45p dividend, taking its annual payout to 2.15p It did not pay a dividend in respect to 2020.
It has also made a decent start to the new year, it noted.
Keywords expects 2022 to be a "particularly strong year for new game launches".
"While we are not immune to the inflationary pressures and competition for talent, we continue to enhance our position as an attractive employer and to take account of our costs as we agree projects with our clients, who are well aware of the industry-wide talent challenge," the company added.
"We are monitoring the situation in Russia, where our teams continue to work but entirely focused on critical work for non-Russian clients. In parallel, and in close partnership with our clients, we have been actively looking at relocating work to other locations across the group, benefiting from our global footprint."
For 2022, Keywords expects an annual outturn at the top end of current market expectations.
Company-compiled consensus has revenue for 2022 at a EUR587 million to EUR610 million range, with adjusted pretax profit between EUR90 million and EUR95 million.
In Sydney, the S&P/ASX 200 rose 0.7% on Wednesday. The Nikkei 225 closed 0.8% lower in Tokyo. The Shanghai Composite was up 1.8%, and the Hang Seng in Hong Kong was 1.9% higher.
US stocks closed higher on Tuesday. The Dow Jones Industrial Average rose 1.0%, the S&P 500 1.2% and Nasdaq Composite 1.8%.
Index future suggest more trepidation in Europe, however.
Russia pledged to scale down fighting around Kyiv and a second major city following peace talks on Tuesday that Ukraine's leader said showed "positive" signs, but Western allies made clear their doubts over Moscow's intentions.
The US cast clear doubt on Moscow's words, and vowed with fellow Western powers to keep "raising the costs" on Russia.
By Tuesday evening Ukraine's general staff – while confirming Russian units were withdrawing from the Kyiv and Chernigiv regions – said it was most likely a troop rotation intended to "mislead" Ukraine's military.
Brent oil was quoted at USD111.84 a barrel early Wednesday in London, up from USD109.35 at the European equities close on Tuesday.
Gold stood at USD1,926.19 an ounce early Wednesday, up from USD1,910.78 late Tuesday.
Gold had fallen below the USD1,900 an ounce threshold after Russia's de-escalation announcement on Tuesday.
The pound was quoted at USD1.3123 early Wednesday in London, down from USD1.3135 late Tuesday. The euro stood at USD1.1116, flat on USD1.1113. Against the yen, the dollar was trading at JPY121.72, down from JPY122.57.
The economic events calendar on Wednesday has Germany inflation data at 1300 BST and US economic growth figures at 1330 BST.
By Eric Cunha; ericcunha@alliancenews.com
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