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(Alliance News) - Stock prices in London are seen opening slightly higher on Thursday, avoiding the weakness seen in Asia and New York in the wake of the latest Federal Reserve meeting minutes.
IG futures indicate the FTSE 100 index is to open 5.80 points higher, or 0.1%, at 7,521.55. The blue chip index closed down 20.31 points, or 0.3%, at 7,515.75 on Wednesday.
In early UK corporate news, the retail sector was in focus. Made.com warned of a possible fundraise, Angling Direct cautioned on annual earnings and AO World swung to loss.
Elsewhere, Africa-focused mobile phone tower developer Helios Towers backed annual guidance after first half revenue growth. Landscaping products company Marshalls reported an interim revenue climb but rising costs kept a lid on profit.
Helios reported revenue of USD265.4 million for the half-year to June 30, up 25% from GBP212.4 million. However, its pretax loss ballooned to USD122.2 million from USD43.6 million.
Finance costs surged to USD104.7 million from USD64.5 million.
Adjusted earnings before interest, tax, depreciation and amortisation rose 19% to USD136.1 million from USD114.2 million a year earlier.
Tenancies grew 20% year-on-year to 20,549. A tenant is a mobile network operator that leases space on a tower.
"We have delivered strong organic tenancy growth in the first half of the year, which combined with the successful integration of acquired assets in Senegal, Madagascar and Malawi has resulted in impressive year-on-year financial performance. Despite broader global macroeconomic uncertainty, our uniquely positioned platform, highly visible base of quality earnings and unparalleled structural growth continues to drive sustainable value creation for all of our stakeholders," Chief Executive Tom Greenwood said.
Looking ahead, it backed guidance of 1,200 to 1,700 organic tenancy additions.
It still expects an adjusted Ebitda margin between 51% and 53% in 2022, down from 53.6% in 2021. The first half adjusted Ebitda margin fell to 51% from 54% a year prior.
Marshalls hailed a "robust" first half but is mindful of economic uncertainty.
Revenue in the first half of 2022 climbed 17% to GBP348.4 million from GBP298.1 million a year earlier. However, its pretax profit dropped 38% year-on-year to GBP23.9 million from GBP38.9 million.
Net operating costs climbed by a quarter to GBP321.1 million.
Marshalls upped its dividend by a third to 5.7 pence per share from 4.3p.
CEO Martyn Coffey said: "Looking forward, the board acknowledges that the macro outlook is becoming less certain due to geopolitical events driving up inflation and adversely impacting consumer confidence. Notwithstanding this, the board's expectations for the group as a whole remain in line with market expectations for the full year, with the more positive backdrop within Marshalls Building Products and Marley expected to balance the continuation of tougher trading conditions in Marshalls Landscape Products, which has greater exposure to the discretionary element of private housing RMI."
Back in April, Marshall agreed to buy pitched roof system manufacturer Marley for GBP535 million. The acquisition was completed later that month.
AO World posted a weaker annual outturn as it now looks to a year of "realignment for the business".
Revenue in the year to March 31 fell 6.3% to GBP1.56 billion from GBP1.66 billion. AO swung to a pretax loss of GBP37.2 million from a GBP20.2 million profit.
"The new financial year marks a period of realignment for the business as we execute a strategic pivot to focus on cash and profit generation," AO said.
Pressure on AO World has grown in recent months.
In late-April, shares were hit when the company warned about supply chain issues and a squeeze on consumer incomes.
In July, it issued a statement on its liquidity position, after a report from the Sunday Times that a credit insurer cut its cover for the online retailer's suppliers. Credit cover is a crucial aspect of the retail supply chain. It provides cover for firms should customers not pay debts in time or at all. Without cover, suppliers would usually require upfront payments to be made.
AO has also recently closed its German operation, after kicking off a strategic review of the unit earlier this year.
CEO John Roberts said on Thursday: "The past 12 months has been a turbulent time for business and for retail in particular, and AO hasn't been immune to those effects. Looking ahead, we certainly have more volatility to navigate, but the core fundamentals of our business remain strong. We entered the new financial year with a period of strategic realignment, and a focus on cash and profit generation."
Made.com - another retailer facing consumer confidence pressure - in a short statement said it is "considering all options" to bolster its balance sheet.
Made.com said on Thursday: "Made confirms that these options include a potential equity capital raise. Made continues to consider its options and a further announcement will be made if and when appropriate."
Late Wednesday, Sky News reported the sofa seller has hired PricewaterhouseCoopers to help with repairing its balance sheet, including plans for a share sale to raise around GBP50 million.
Made.com has a market capitalisation of GBP39.1 million.
According to Sky News sources, the furniture retailer is advancing plans to raise funds a month after announcing that it was exploring ways to bolster its financial position.
Sky News reported that the launch of a cash call is expected to take the form of a placing which would require shareholder approval.
Made shares debuted in June last year at 200 pence each, valuing it around GBP775 million on admission. The stock closed 5.0% lower at 9.88p each in London on Wednesday, down 95% from its IPO price.
Also in the UK retail sector, specialist fishing tackle retailer Angling Direct warned annual revenue will fall short of market expectations.
For the first half ended July 31, it expects to report revenue of GBP38.9 million, up 1.3% year-on-year from GBP38.4 million.
Angling said it has faced an "inevitable impact" from cost of living pressures, falling consumer confidence and inflation. It has also felt the heat from recent hot weather.
"More recently, adverse fishing conditions caused by the heatwave and its resulting effect on river levels and fish health has also impacted trading in the usually busy month of August. In addition, the same factors have impacted sales growth and profitability to a similar extent in Europe as the company continues to invest in the early stages of its European rollout," Angling said.
It now expects revenue "marginally below current market expectations" for financial 2023. Its pre-IFRS 16 Ebitda will be "materially behind current market expectations" and land in the region of GBP3.0 million and GBP3.4 million.
In Tokyo on Thursday, the Nikkei 225 ended down 1.0%, while in Sydney, the S&P/ASX 200 closed 0.2% lower. In China, the Shanghai Composite was down 0.5% in late trade, while the Hang Seng Index was 0.9% lower.
In New York on Wednesday, the Dow Jones Industrial Average ended down 0.5%, the S&P 500 lost 0.7% and the Nasdaq Composite fell 1.3%.
The US Federal Reserve reaffirmed its commitment to reducing historically high levels of inflation but could rein in the pace of interest rate increases "at some point", minutes from its latest policy meeting showed on Wednesday.
In the minutes of the July policy meeting, which saw a second straight 75 basis points increase, Fed officials said it will take some time to bring "unacceptably high" inflation back down near 2.0% target levels.
Policymakers at the Fed judged that there was little evidence to date that inflation pressures were subsiding.
However, participants stressed that moving to an "appropriately restrictive stance of policy was essential for avoiding an unanchoring of inflation expectations", once high levels of inflation were under control.
The minutes did little to reveal how the Fed will act when it next meets in September.
"The equity rally in the US didn't pick up momentum after the Federal Reserve released its latest meeting minutes, which sounded more hawkish-than-expected, or more hawkish-than-what-was-needed-to-give-another-boost to the US stock markets," Swissquote analyst Ipek Ozkardeskaya commented.
"The biggest take was that the Fed will continue tightening its policy until it sees that inflation is 'firmly on path back to 2%'."
The sterling was quoted at USD1.2026 early Thursday, down from USD1.2040 at the London equities close on Wednesday. The euro stood at USD1.0164, up from USD1.0155. Against the yen, the dollar was trading at JPY135.24, down from JPY135.44.
Gold rose to USD1,762.50 an ounce early Thursday, from USD1,753.55 late Wednesday. Brent oil was quoted at USD93.50 a barrel, up slightly from USD93.38.
The economic events calendar on Thursday has eurozone inflation readings at 1000 BST and the latest US jobless claims numbers at 1330 BST.
By Eric Cunha; ericcunha@alliancenews.com
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