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LONDON (Alliance News) - Stock prices in London are seen opening higher on Tuesday amid weakness in the pound, which fell sharply on Monday after UK Prime Minister Theresa May cancelled a key vote in Parliament on her Brexit deal with the EU.In early corporate news, WPP Chief Executive Mark Read set a three-year plan of "radical evolution" to return the advertising giant to growth, while US-focused equipment rental firm Ashtead Group reported strong first-half earnings and said full-year results will be ahead of expectations. IG futures indicate the FTSE 100 index is to open up 57.46 points at 6,779.00, recovering all of Monday's losses. The blue chip index closed down 56.57 points, or 0.8%, at 6,721.54 on Monday.Ashtead Group retained its outlook as half-year earnings surged. For the six months ended October 31, revenue rose 19% to GBP2.25 billion from GBP1.90 billion last year, and pretax profit increased 25% to GBP610.0 million from GBP493.1 million the year before. Ashtead raised its interim dividend 18% to 6.5 pence from 5.5 pence last year. The company added that it has as spent GBP425.0 million on its share buyback programme so far this year. Additionally, it is spending GBP125 million per quarter on share buybacks with the programme continuing through the 2019 financial year and an anticipated spend of at least GBP500 million in financial 2020."Our business is performing well in supportive end-markets. Accordingly, we expect full-year results to be ahead of our prior expectations, and the board continues to look to the medium term with confidence," said Chief Executive Geoff Drabble.WPP Chief Executive Officer Mark Read set out a three-year plan to deliver an improved performance saying the company will make additional investments in "creativity, technology and talent". Read was appointed as CEO in September after the April departure of founder & CEO Martin Sorrell."We describe our approach as 'radical evolution': radical because we are taking decisive action and implementing major change; evolution because we will achieve this while respecting the things that make WPP the great company it is today," Read said. WPP said it expects to deliver organic growth in line with its peers at a headline operating profit margin of at least 15% by the end of 2021 as a result of the strategy. The company said it will incur cash costs for restructuring of GBP300 million over the next three years to deliver estimated annual savings of GBP275 million by the end of 2021, around half of which will be reinvested into the business."WPP has become too unwieldy, with too much duplication. As a result it is not always as focused or as fleet of foot as it needs to be to satisfy the needs of all our clients around the globe. Therefore, central to the new strategy is a simpler structure, built around the needs of clients, to allow easier access to WPP's many resources," the company said. Online retailer MySale Group said revenue and profit for financial 2019 is expected to be significantly below market expectations.MySale said it expects a small underlying earnings before interest, tax, depreciation and amortisation loss in the first half but a better performance in the second half.Mysale said its main challenge has been changes made to the general sales tax in Australia. As such, the company is taking action to improve product mix and inventory. "We are very disappointed in the performance during this year's peak trading period. In response to this underperformance we have significantly accelerated and expanded our existing plans to streamline the business, reduce the cost base and make changes to the product strategy. The results of these actions will be realised in the second half of this financial year," said CEO Carl Jackson. The pound was firm early Tuesday, quoted at USD1.2570 from USD1.2535 at the London equities close Monday. Sterling hit an intraday low of USD1.2506 on Monday, its worst level since April 2017.May is heading for emergency Brexit talks with German Chancellor Angela Merkel on Tuesday after leaving Westminster in turmoil.The prime minister's move to abandon a crunch Commons vote on her Brexit deal drew howls of condemnation from the opposition as well as a number of Tories. May took the decision to pull the vote, scheduled for Tuesday, as the prime minister admitted to MPs she faced a "significant" defeat on her Brexit agenda.The PM also will meet Dutch counterpart Mark Rutte in The Hague on Tuesday in a bid to gain reassurances on the exit deal from European leaders ahead of a crunch EU summit on Thursday.May, who is facing repeated calls from leading Tory Brexiteers to be replaced as PM, was forced to abandon the Commons vote as the scale of opposition to the Brexit deal, especially regarding proposed backstop arrangements for the Irish border, threatened a crushing rejection of her plans.In the US on Monday, Wall Street ended higher, with the Dow Jones Industrial Average up 0.1%, S&P 500 up 0.2% and Nasdaq Composite ending up 0.7%.The Japanese Nikkei 225 index closed down 0.3%. In China, the Shanghai Composite closed up 0.2%, while the Hang Seng index in Hong Kong is up 0.1%.Asian stock markets were mixed on Tuesday after US stocks managed a late-stage recovery in a volatile session overnight. Worries about global economic growth and US-China trade tensions have weighed on investor sentiment.The economic events calendar on Tuesday has UK unemployment figures at 0930 GMT and US producer prices at 1330 GMT.
23 Feb 2023 10:34
