(Alliance News) - Stock prices in London are seen opening higher on Wednesday, tracking gains by Asian equity markets, with focus on a 30-year-high UK inflation reading and the 'spring statement' by the UK government at midday.
In early company news, hazard detection and life protection firm Halma said it expects annual adjusted pretax profit to be in line with forecasts. Defence contractor Ultra Electronics said annual pretax profit declined. Car dealer Pendragon reported strong annual results.
IG futures indicate the FTSE 100 index is to open 32.18 points higher at 7,508.90. The index closed up 34.33 points, or 0.5%, at 7,476.72 on Tuesday.
The UK annual inflation figure hit its highest level since March 1992 as the country grapples with a cost of living crisis, data from the Office for National Statistics showed on Wednesday.
On an annual basis, the UK consumer price index rose by 6.2% in February, accelerating sharply from a 5.5% rise in January. The reading was higher than the market forecast, cited by FXStreet, of 5.9%.
UK CPI rose 0.8% monthly in February, having edged down 0.1% in January. The print exceeded the consensus estimate for a rise of 0.6%.
The pound was quoted at USD1.3261 early Wednesday, up from USD1.3255 at the London equities close Tuesday, ahead of the UK spring statement at around 1230 GMT.
FTSE 100-listed Halma said it has made good progress so far in the second half of the financial year that ended March 31. It said it continues to benefit from a diverse portfolio and long-term growth drivers.
Halma expects adjusted pretax profit for the year to be in line with market consensus expectations.
Halma expects to deliver a sequential improvement in revenue in the second half of the year and substantial revenue growth in the year as a whole. Order intake has continued to be ahead of both revenue this year and order intake for the same period last year, it added.
Ultra Electronics said 2021 was a year of strategic, operational and financial progress, achieved despite pandemic-driven operational and supply challenges.
Ultra is in the process of being acquired by private equity-owned Cobham, but the deal is being probed by the UK government on national security grounds.
For 2021, pretax profit was GBP82.7 million, down from GBP103.7 million in 2020, due to a one-off loss on disposal of two small loss-making non-core businesses. Revenue for 2021 was GBP850.7 million, down from GBP859.8 million.
Citing the terms of the recommended cash acquisition of Ultra by Cobham, it said no final dividend will be paid and the total full-year dividend is unchanged from the interim dividend of 16.2 pence. This compares with 56.9p paid out in 2020.
Looking ahead, Ultra Electronics said it is well-placed to deliver its target of above market growth and a mid-teens margin.
Chief Executive Officer Simon Pryce said: "We continue to deliver organic growth ahead of our core markets and our 'focus; fix; grow' transformation is driving sustainable operational and financial improvement and delivering better outcomes for all of our stakeholders. Our continuous improvement focus is uncovering additional improvement opportunities.
"As a result, the board remains very confident of Ultra's ability to deliver excellent value for all its stakeholders. This is recognised and is part of the rationale behind Advent/Cobham's interest in Ultra. The board remains committed to working with Advent/Cobham and HM government to deliver a successful closing of the acquisition."
Pendragon said it delivered a strong set of results for 2021 as it benefited from a buoyant used-car market.
For 2021, it posted a pretax profit of GBP61.5 million, swinging from a GBP24.7 million loss in 2020, on revenue of GBP3.45 billion, up 18% from GBP2.92 billion in 2020.
Pendragon said it delivered record underlying pretax profit of GBP83.0 million, multiplied from GBP8.2 million in 2020.
CEO Bill Berman said: "Our sector has experienced a unique set of trading conditions during the period, and I am delighted with how we have performed in this environment. We have made the most of the favourable market dynamics to deliver record underlying profits and we have also reported a return to profit for CarStore, our relaunched, used car brand.
"We expect existing supply chain constraints to continue in the current year, and we are mindful of the potential for further disruption to new vehicle supply chains as a result of the conflict in Ukraine. Despite this, we have the right strategy in place and we expect to make positive progress towards our long-term goals this year."
Pendragon said underlying profit in January and February was ahead of the same months in 2021.
Calls for a higher open in London stem from a rally in US and Asian equity markets overnight.
Wall Street ended higher Tuesday, with the Dow Jones Industrial Average up 0.7%, S&P 500 up 1.1% and Nasdaq Composite up 2.0%.
In Asia on Wednesday, the Japanese Nikkei 225 index closed up 3.0%. In China, the Shanghai Composite ended up 0.3%, while the Hang Seng index in Hong Kong was up 1.3%. The S&P/ASX 200 in Sydney closed up 0.5%.
In Ukraine, President Volodymyr Zelensky described peace negotiations with Russia as "very difficult", in a video message released early Wednesday.
"They are very difficult, sometimes scandalous, but we are moving forward step by step," Zelensky said, adding that Ukrainian representatives were in negotiation every day.
Both Ukraine and Russia claimed successes on the battlefield on Tuesday, as the conflict was showing no sign of abating. The Ukrainian side reported that it had hit nine Russian targets in the air within 24 hours.
Russia reported a further advance in the regions of Donetsk and Luhansk in eastern Ukraine, although Kiev refuted this, and Western powers say Moscow's advance remains stalled in many places.
President Joe Biden leaves Wednesday for Europe on a mission to bolster Western unity and ramp up already unprecedented sanctions against Russia.
White House National Security Advisor Jake Sullivan told reporters that Biden will seek to "reinforce the incredible unity we built with allies and partners". Sullivan also said that economic sanctions will be deepened.
On Thursday, Biden will attend summits with NATO, the G7 group and the European Council. He flies Friday to Poland, which neighbours Ukraine, and on Saturday he meets President Andrzej Duda.
The euro stood at USD1.1025, firm on USD1.1014. Against the yen, the dollar was trading at JPY121.03, higher against JPY120.55 late Tuesday in London.
Brent oil was quoted at USD116.41 a barrel Wednesday morning, up from USD115.05 a barrel late Tuesday. Gold stood at USD1,919.80 an ounce, slightly lower against USD1,922.93.
In the economic calendar, eurozone consumer confidence is at 1500 GMT.
By Arvind Bhunjun; arvindbhunjun@alliancenews.com
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