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(Alliance News) - Stock prices in London are seen opening slightly lower on Friday, at the end of largely positive week, as traders digest hawkish comments from US Federal Reserve members on Thursday which gave the dollar a boost.
IG futures indicate the FTSE 100 index is to open 4.50 points lower, or 0.1%, at 7,537.35. The blue chip index closed up 26.10 points, or 0.4%, at 7,541.85 on Thursday. The large-cap benchmark has advanced 0.6% so far this week.
In early UK corporate news, Just Eat Takeaway has sold a stake in a Latin American food delivery joint-venture, building materials company Kingspan posted a record first-half performance, while things are not so rosy at retailer Joules. On the back of naming a new chief executive and potentially inking investment from Next, it has warned that recent trading has "softened materially".
Just Eat Takeaway said it has relinquished a 33% stake in the iFood joint-venture to Johannesburg- and Amsterdam-listed internet assets investor Prosus for up to EUR1.8 billion. It said EUR1.5 billion will be payable immediately.
"Just Eat Takeaway.com remains focused on improving its profitability and on a disciplined allocation of capital. It will retain the transaction proceeds to maintain its balance sheet strength and to service repayments of its upcoming debt maturities," Just Eat said.
iFood has online food and delivery operations in Latin America.
The deal comes as Just Eat Takeaway explores a deal for its Grubhub unit. Just Eat completed its USD7.3 billion acquisition of Chicago, US-headquartered Grubhub in June last year. It first mulled a sale of Grubhub in April, and on Friday said it continues to "actively explore" this.
Kingspan posted a sharp interim earnings hike and upped its payout.
Revenue in the half-year to June 30 rose 42% to EUR4.15 billion from EUR2.92 billion a year earlier. Pretax profit surged 30% to EUR387.6 million from EUR297.2 million.
"Despite a challenging trading environment Kingspan delivered record half year results, with revenues over EUR4 billion for the first time. We have been able to navigate large input cost increases with only modest margin impact," Chief Executive Gene Murtagh commented.
Kingspan upped its payout by 29% to 25.6 cents from 19.9 cents.
The CEO added: "Looking forwards we retain the outlook flagged in our June trading update but are confident in the long term demand for the energy efficient solutions we deliver. Whilst inflationary pressures have eased in recent months, the context of energy supply constraints over the winter months in Europe will be something we will be closely monitoring."
In June, it had cautioned that order intake volumes declined year-on-year in May and June, but were ahead of pre-pandemic levels.
Joules said a recent heatwaves has hit sales of winter clothing, including "rainwear, knitwear, and wellies".
The unprecedented weather has "compounded the ongoing subdued consumer demand due to the well-documented cost of living crisis", Joules warned.
Trading over the five weeks to August 14 has "softened materially," it cautioned.
"Retail sales have consequently been depressed over this five-week period, resulting in an 8% year-on-year reduction in retail sales in the 11 weeks of the current financial year to date," it added.
Margins have taken a hit and Joules now expects a "significant loss" in its first half. It expects an improved second half, as it reaps the rewards of self-help work.
"In light of this, the board currently expects the group to deliver a full year loss before tax, and before adjusting items, significantly below current market expectations," it said.
Earlier this week, Joules named Jonathon Brown as its new chief executive officer, effective from September 30. Brown will initially join the company as CEO designate on September 7 and then take up the role on September 30. Most recently, he was the CEO of Compare the Market, and has also held positions at retailers such as Kingfisher and John Lewis.
The new appointment came after under-pressure Joules said it was in talks with Next about adopting its Total Platform services. The move, if it goes ahead, will see Next inject about GBP15 million into Joules.
Joules said on Friday: "The group continues positive discussions with Next about both adopting its Total Platform services to support its long-term growth plans and a potential equity investment. There can be no certainty that these discussions will lead to any agreement, and further announcements in this regard will be made if and when appropriate."
Figures from the Office for National Statistics offered some respite for the retail sector.
UK retail sales defied expectations and grew on a monthly basis in July, figures on Friday showed, though they slightly missed a year-on-year forecast.
According to the Office for National Statistics, UK retail sales volumes fell 3.4% on a yearly basis in July, a sharper than the FXStreet-cited market consensus of a 3.3% slide. In June, they had slumped 6.1% year-on-year.
Excluding fuel sales, UK retail sales fell 3.0% on a yearly basis in July, easing from a 6.2% decline in June. The latest adjusted figure beat FXStreet consensus of a 3.1% decline.
On a monthly basis, sales increased 0.3% in July from June, outperforming expectations of a 0.2% decline. They had fallen 0.2% on a monthly basis in June.
Excluding fuel, retail sales rose 0.4% monthly in July, ahead of expectations of a 0.2% fall. In June, retail sales ex-fuel rose 0.2% from May.
Ahead of the data, a long-running consumer confidence tracker hit a record low.
GfK's consumer confidence index fell three points in August to minus 44, its lowest figure since records began in 1974. All five measures that make up the index fell last month, including confidence in personal finances and the general economy.
The pound was on the back foot. Sterling quoted at USD1.1917 early Friday, down sharply from USD1.2000 at the London equities close on Thursday. The euro stood at USD1.0089 early Friday, down from USD1.0132 late Thursday. Against the yen, the dollar was trading at JPY136.23, up sharply from JPY135.10.
The dollar was on the up after a series of hawkish comments from Fed members. Among them, Neel Kashkari, for a long-time considered one of the central bank's more dovish members, said the Fed must move quickly to get a handle on inflation, Reuters reported.
The Minneapolis Fed president said the Fed must rein inflation as soon as possible, even it means triggering a recession, according to the news agency.
"We need to get inflation down urgently. We need to get demand down," Kashkari told an event on Thursday.
There were also hawkish comments from Mary Daly, the president of the Federal Reserve Bank of San Francisco and James Bullard, the president of the Federal Reserve Bank of St Louis.
In early economic news from Europe, Germany's producer price inflation continued to heat up in July, figures from Destatis showed.
Producer prices jumped by a record 37% annually in July, quickening from a 33% rise in June.
In Tokyo on Friday, the Nikkei 225 ended marginally lower, while the S&P/ASX 200 in Sydney clawed fractionally higher. In China, the Shanghai Composite was down 0.4%, while the Hang Seng Index in Hong Kong was down 0.2%.
In New York on Thursday, the Dow Jones Industrial Average added 0.1%, while the S&P 500 and Nasdaq Composite both rose 0.2%.
Brent oil was quoted at USD95.88 a barrel early Friday, down from USD96.12 late Thursday. Gold was quoted at USD1,756.90 an ounce, down from USD1,761.70.
By Eric Cunha; ericcunha@alliancenews.com
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