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(Alliance News) - Stock prices in London are seen opening higher on Tuesday, rebounding from steep losses on Monday despite the rising death toll in China from the spread of coronavirus.
In early UK company news, mid-cap housebuilders Crest Nicholson and McCarthy & Stone both reported a drop in annual pretax profit, but kept their respective dividends unchanged. Personal care products maker PZ Cussons said it was making progress under its new strategic direction.
IG futures indicate the FTSE 100 index will open 29.15 points higher at 7,441.20. The blue-chip index closed down 173.93 points, or 2.3%, at 7,412.05 on Monday, having hit a six-week low of 7,392.83 during the session.
Crest Nicholson expressed disappointment as it reported a fall in annual earnings.
For the year ended October 31, pretax profit slumped 39% to GBP102.7 million from GBP168.7 million in financial 2018, and revenue slipped 3% to GBP1.08 billion from GBP1.12 billion.
Crest maintained its full year dividend at 33.0 pence.
Crest said it remains confident in its ability to deliver on previous guidance and re-iterate expectations for financial 2020 adjusted pretax profit in a range of GBP110 million to GBP120 million. Adjusted pretax profit in financial 2019 was GBP121.1 million.
"We believe the decisive political outcome should provide support for the sector in the near term. While it is too early to form a view on the impact for 2020 trading we are seeing some encouraging signs. Footfall and visitor numbers on our developments have increased and traffic on our website is up," said Chief Executive Officer Peter Truscott.
McCarthy & Stone said it delivered annual results in line with expectations against the backdrop of a "challenging market and strategic structural changes".
It added that it is making "significant progress" in both stages of transformation strategy launched in September 2018 and has a more "resilient business model".
For the year ended October 31, pretax profit was down 25% to GBP43.4 million from GBP58.1 million in financial 2018, but revenue rose 8% to GBP725.0 million from GBP671.6 million. The company attributed the fall in profit to exceptional costs incurred during the period, representing cost of land that will no longer be developed.
The housebuilder, which develops and manages retirement communities, kept its total dividend unchanged at 5.4p.
"The group's new strategy has driven a solid trading performance in a difficult market. Although the result of the general election in December 2019 eased the political uncertainty, the pre-election period impacted our performance at the start of the first half, and our first half out-turn is expected to be lower than the prior year. Our full year out-turn remains in line with expectations, weighted towards the second half," Chief Executive Officer John Tonkiss said.
PZ Cussons said it was making progress in its new strategy against challenging market conditions.
PZ Cusssons said the strategy review - announced in July 2019 - has delivered initial progress, with two disposals, stable revenue in Focus Brands, and action to reduce overhead costs.
For the half year to November 30, pretax profit was up 35% to GBP34.7 million from GBP25.8 million last year, but adjusted pretax profit was down 12% to GBP28.0 million. The company attributed the rise in statutory profit to the sale of its Greek business.
Revenue slipped 3.1% to GBP293.3 million from GBP302.8 million last year..
PZ Cussons kept its interim dividend steady at 2.67p per share.
In terms of outlook, PZ Cussons said it expects a stronger second-half pretax profit performance, should there be no further worsening of the economic and trading environments across its key geographies.
Online takeaway platform Just Eat said 2019 ended in line with the company's expectations, and it expects to report underlying earnings before interest, tax, deprecation and amortisation of around GBP200 million. It also expects group orders of 254 million and revenue of about GBP1.0 billion. UK order growth in 2019 came in at 8%.
The US, Japan and other nations raced Tuesday to get their citizens out of the locked-down Chinese city at ground zero of a virus epidemic, as the death toll surged to 106 and the number of confirmed infections doubled to over 4,500.
The contagion, which experts believe emanated from a wild animal market in the city of Wuhan last month, has triggered a desperate Chinese containment effort after spreading nationwide and to more than a dozen other countries.
The government has sealed off Wuhan and other cities in central Hubei province, effectively trapping more than 50 million people, including thousands of foreigners, in a bid to contain the virus as the high-travel Lunar New Year holiday continues.
The pound was quoted at USD1.3040 early Tuesday, lower than USD1.3056 at the London equities close Monday, ahead of Thursday's interest rate decision from the Bank of England.
The euro was quoted at USD1.1021 early Tuesday, flat from USD1.1020 late Monday. Against the yen, the dollar was trading at JPY109.03, up from JPY108.93 late Monday.
Gold was priced at USD1,578.38 an ounce early Tuesday, down from USD1,582.00 at the London equities close Monday.
Oil was quoted at USD59.22 a barrel early Tuesday, up from USD58.90 late Monday.
Also ahead in the economic events calendar, the US Federal Reserve's two-day monetary policy meeting begins on Tuesday, with the interest rate decision on Wednesday.
The Japanese Nikkei 225 index closed down 0.6%. Financial markets in Shanghai and Hong Kong remain closed for the Lunar New Year holiday.
By Arvind Bhunjun; arvindbhunjun@alliancenews.com
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