LONDON BRIEFING: Haleon reports double-digit revenue growth

(Alliance News) - Stocks in London are set to open higher on Tuesday, as markets in London return to action following a bank holiday for the state funeral of Queen Elizabeth II.

Markets this week will be focused on major central bank decision, with the US Federal Reserve scheduled for Wednesday and the Bank of England on Thursday, among others.

In China on Tuesday, the nation's central bank left its benchmark lending rate unchanged, in line with market expectations.

The People's Bank of China held its one-year loan prime rate - which serves as a benchmark for corporate loans - at 3.65%, while the five-year rate remained at 4.3%.

Australia's central bank on Tuesday said it expects to implement more interest rate hikes, but sees the case for a slower pace of increase as it seeks to keep the economy on "an even keel" while fighting inflation, minutes from its latest meeting showed.

The Reserve Bank of Australia increased the cash rate target earlier in September by half a percentage point to stand at 2.35% from 1.85% previously. This was the central bank's fourth consecutive 50 basis point rate hike since June.

Headlining UK company updates early Tuesday, GSK-spinoff Haleon reported double-digit revenue growth in the first half of the year.

Here is what you need to know ahead of the London market open:

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MARKETS

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FTSE 100: called up 0.6% at 7,281.40

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Hang Seng: up 1.1% at 18,761.66

Nikkei 225: closed up 0.4% at 27,688.42

S&P/ASX 200: closed up 1.3% at 6,806.40

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DJIA: closed up 197.26 points, or 0.6%, at 31,019.68

S&P 500: closed up 26.56 points, or 0.7%, at 3,899.89

Nasdaq Composite: closed up 86.62 points, or 0.8%, at 11,535.02

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EUR: up at USD1.0035 (USD1.0025)

GBP: up at USD1.1444 (USD1.1431)

USD: up at JPY143.30 (JPY142.93)

Gold: down at USD1,673.68 per ounce (USD1,677.01)

Oil (Brent): flat at USD92.29 a barrel (USD92.24)

(changes since previous London equities close)

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ECONOMICS

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Tuesday's key economic events still to come:

1000 CEST EU balance of payments

0830 EDT US housing starts

0855 EDT US Johnson Redbook retail sales index

1630 EDT US API Weekly statistical bulletin

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Producer price inflation in Germany accelerated to another record high in August, data from the Federal Statistics Office showed. In August, the producer price index increased by 45.8% compared to the same month a year prior, compared to a 37.2% increase in July, and well above consensus market expectations of a 37.5% hike, according to FXStreet. On a monthly basis, the producer price index rose by 7.9% in August from July, also a record and compared to a 5.3% rise in July from June. The acceleration was due to energy prices, which more than doubled as a result of strong rises electricity and natural gas prices.

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UK Prime Minister Liz Truss is committing to spend at least GBP2.3 billion next year on military aid to help Ukraine fend off Vladimir Putin's invasion. Truss pledged the UK will match or exceed the record support given to Volodymyr Zelensky's "inspirational" troops. Truss announced the support as she prepared to fly to New York, where she will use a United Nations summit in the US to rally support in helping Ukraine fight Russia. She will also try to rally world leaders to end energy dependence on Mr Putin's gas as he turns the taps off on the Nord Stream 2 pipeline.

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Truss has conceded that negotiations for a post-Brexit free trade deal with the US will not restart for years as she flew to New York ahead of a meeting with Joe Biden. The UK prime minister stressed her trade priority is striking agreements with India and the Gulf states, and joining a trade pact with nations including Australia and Japan. But she heavily downplayed the chances of talks even resuming to get the comprehensive deal with the States that was billed by Brexit backers as a major benefit of leaving the EU during the referendum.

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BROKER RATING CHANGES

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HSBC cuts Ocado to 'reduce' from 'hold'

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Credit Suisse raises Pennon to 'neutral' from 'underperform'

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JPMorgan places SSE on 'positive catalyst watch'

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COMPANIES - FTSE 100

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Consumer healthcare firm Haleon, in its first earnings report since being split from GSK and separately listed, reported a strong performance in the first half of 2022, noting double-digit revenue growth during the period. In the first half it reported a pretax profit of GBP864 million and revenue of GBP5.18 billion. The previous year, pretax profit totalled GBP736 million on revenue of GBP4.58 billion. Whilst noting current macro-economic challenges and uncertainties, Haleon said the positive momentum seen in the first half has continued into the second half of the year. Haleon said it is confident it is well positioned to deliver on guidance this year. Full-year revenue growth is expected between 6% and 8%.

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Pharmaceutical firm AstraZeneca said Evusheld, a Covid-19 treatment, has been approved in the EU for the treatments of adults and children aged 12 and over who do not require supplemental oxygen. The approval was based on results from the Tackle Phase III Covid-19 treatment trial which showed Evusheld provided clinically and statistically significant protection against progression to severe Covid-19 death against a placebo.

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DIY retailer Kingfisher said it delivered a first-half performance in line with expectations, while facing strong comparatives from the prior year as well as a more challenging environment. Sales in the six months that ended July 31 totalled GBP6.81 billion, down 4.1% from GBP7.10 million a year previous. Pretax profit totalled GBP474 million, down 30% against GBP677 million. Kingfisher said it had seen an "encouraging" start to trading in the second half of the year.

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COMPANIES - FTSE 250

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Online greeting card and gifting platform Moonpig said its overall trading performance from May was been in line with expectations. As a result, the firm reiterated its full-year guidance. It explained it has prioritised card sales, which have a "demonstrable track record" of resilience. Moonpig said average order values in the period have increased year-on-year and margins have remained "resilient in the absence of any significant pressure from input cost inflation".

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Iron ore producer Ferrexpo said has received a negative judgement from an appeal court in Ukraine regarding a claim made to invalidate a share purchase agreement from 2002 in respect of a 40% stake in Ferrexpo Poltava Mining. The court has ruled the agreement is invalid and thus the stake in Ferrexpo Poltava Mining will be transferred to the unnamed claimants. Ferrexpo said it has "compelling arguments" to defend its position.

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OTHER COMPANIES

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Healthcare software firm Craneware more than doubled its revenue in the year ended June 30. Revenue rose to USD165.5 million from USD75.6 million in the previous year. Pretax profit remained broadly flat at USD13.1 million, compared to USD13.2 million, due to amortisation of acquired intangibles and bank interest payments from the Sentry Data Systems acquisition. The firm proposed a final dividend of 15.5 pence per share, unchanged from the previous year, taking its full-year payout to 28p, up from 27.5p. Looking ahead, Craneware said it expects continued sales momentum across the group.

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Software developer Alfa Financial Software increased its expectations for the full-year thanks to improved contractual certainty and strong trading since its half-year results announcement at the start of September. Alfa explained it achieved improved contractual certainty with two clients, as well as request for additional people on other projects. In addition, it noted that its performance in August was "very strong" with chargeable days at a "record level".

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By Heather Rydings; heatherrydings@alliancenews.com

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