LONDON MARKET PRE-OPEN: Barratt Profit Up; Interserve Gets Debt Deal

LONDON (Alliance News) - Stock prices in London on Wednesday are set to pull back from Tuesday's rally, while the pound remained below the USD1.30 mark after disappointing UK data released earlier in the week.In early company news, Barratt Developments said interim profit jumped amid higher revenue and stronger margins, while Victrex warned of a weaker first quarter, and Interserve reached a deal to cut debt via issuing just under GBP500 million in fresh equity. Due at midday are annual results form GlaxoSmithKline.IG says futures indicate the FTSE 100 index of large-caps to open 11.27 points lower at 7,166.10 on Wednesday. The FTSE 100 index closed up 2.0%, or 143.24 points, at 7,177.37 on Tuesday.After Tuesday's "bumper" move higher, stocks in London are set to pull back slightly on Wednesday, said CMC Markets chief market analyst Michael Hewson."Investors piled back into equity markets, sending the FTSE 100 to three-month highs, and European stocks to their highest levels in two months. The rise in the FTSE was helped by a weaker pound as well as a well-received set of numbers from oil giant BP," explained Hewson. Sterling had slumped on Tuesday after the latest UK services Purchasing Managers' Index came in at 50.1 in January, down from 51.2 in December and only marginally above the stagnation mark of 50. The pound was quoted at USD1.2929 early Wednesday, soft compared to USD1.2936 at the London equities close on Tuesday and remaining substantially below USD1.3059 as at the equities close on Monday.The services data on Tuesday followed news on Monday that UK construction growth eased further in January to its weakest level in ten months, while on Friday last week figures showed the country's manufacturing sector made a lacklustre start to 2019, slipping to its lowest level in three months.In company news, housebuilder Barratt Developments reported a double-digit rise in half-year profit.Revenue for the six months to December 31 rose 7.2% to GBP2.13 billion from GBP1.99 billion a year ago, as completions rose 4.1% to 7,622. Pretax profit jumped 19% year-on-year to GBP408.0 million as the company's gross margin improved by 200 basis points to 22.6%.The home builder raised its interim dividend by 12% to 9.6p. The FTSE 100 constituent said trading is in line with expectations and it is "confident" in achieving a "good financial and operational performance" in its current financial year. Barratt said it intends to pay a special return of GBP175 million in November 2019, as previously announced, and to demonstrate management's confidence it has proposed to pay a further GBP175 million in November 2020.Smaller peer Redrow said revenue in the half-year to December 31 grew 9% to GBP970 million as pretax profit increased 5% to GBP185 million. Legal completions rose 12% to 2,970The firm boosted its interim dividend by 11% to 10p. In addition to this, Redrow proposed a 30p per share return to shareholders through a 'B' share scheme. "The market during the run up to the festive period and the first two weeks of 2019 was subdued by macroeconomic and political uncertainty. However, sales over the last three weeks have bounced-back with reservations running at similar levels to last year's strong market activity," said Redrow's outgoing chair, Steve Morgan.Drugmaker AstraZeneca said the US Food & Drug Administration has granted Orphan Drug Designation to Fasenra for the treatment of hypereosinophilic syndrome. The FDA grants this designation to treatments of rare diseases or disorders that affect fewer than 200,000 people in the US.Water firm Severn Trent said it continues to expect a full-year trading performance in line with expectations. The blue-chip firm said its capital programme is progressing well and it is on track to deliver its "biggest capital spend in a decade. Victrex said it had a weaker start to its financial year, though has seen a pick-up in recent months. The high performance polymer firm said first quarter revenue was down 18% on last year at GBP64.1 million, with sales volumes of 822 tonnes down 22% year-on-year. "Pleasingly, January and February saw some initial improvement, although given our Q1 performance, the first half is expected to be much weaker overall, compared to the prior year. Our expectations for the second half are unchanged, with new projects and reduced headwinds supporting our assumptions," said Chief Executive Jakob Sigurdsson.Struggling support services firm Interserve said it has reached an agreement to cut debt via issuing new equity, and separately said it has received a letter from a shareholder requesting the removal of the majority of the board.Interserve said it has agreed a deleveraging plan in principle with its lender, bonding provider and the pension trustee, which is expected to result in the firm's net debt being reduced to GBP275 million. This will be done through the issue of GBP480 million in fresh Interserve equity. Interserve currently has a market capitalisation of GBP149.7 million, meaning existing shareholders face significant dilution.The new Interserve equity will be provisionally placed with existing lenders and subject to "claw back in full" by existing shareholders through a fully pre-emptive open offer."Whilst Interserve's objective remains to implement a fully consensual transaction, Interserve is also actively preparing alternative plans to ensure the proposed transaction can be implemented in the event that shareholder approval is not forthcoming," the company noted.Separately, Coltrane Master Fund has requisitioned a general meeting of Interserve, in which it has proposed the removal of Glyn Barker, Mark Whiteling, Russell King, Anne Fahy, Nick Salmon, Gareth Edwards, Dougie Sutherland and Nicholas Pollard as directors of Interserve. Coltrane does, however, continue to support Chief Executive Debbie White and is not seeking her removal. White is the only member of the Interserve board that Coltrane is not looking to remove.Atlas Mara said it is undertaking a strategic review and also announced Bob Diamond will step down as chair and return to his previous role of non-executive director.The African bank investor said it will be looking to reduce exposure in non-core markets, accelerate an agricultural finance platform, achieve the consolidation of the Union Bank of Nigeria, and develop a digital banking platform.In addition, Atlas Mara founder Diamond has decided to move from his role as chair and return to being a non-executive director on the board. Diamond assumed the role of chair on an interim basis, the company explained. Atlas Mara has appointed Michael Wilkerson, a non-executive director, to assume the role of executive chair.Still to come in Wednesday's UK corporate calendar are annual results from pharmaceuticals giant GlaxoSmithKline.In the US on Tuesday, Wall Street ended higher, with the Dow Jones Industrial Average closing up 0.7%, the S&P 500 up 0.5% and Nasdaq Composite gaining 0.7%.After the New York close, entertainment giant Walt Disney reported a fall in profit as revenue edged marginally lower. California-based Disney's first-quarter profit dropped to USD2.79 billion or USD1.86 per share from USD4.42 billion or USD2.91 per share a year before. The previous year's bottom line included a USD1.6 billion one-time tax benefit associated with US federal tax reforms. Revenue for the quarter was relatively flat at USD15.30 billion compared to USD15.35 billion a year before. Focus on Tuesday evening in the US was on US President Donald Trump's State of the Union address, though investors looking for a "fresh trading catalyst" were left disappointed, said Jasper Lawler, head of research at London Capital Group."The US dollar remained steady following President Trump's address. Whilst the President touched on Chinese trade relations and the budget there was nothing new for traders to sink their teeth into," said Lawler. Urging unity and cooperation across party lines, Trump on Tuesday hailed the country's economy while honing in on his signature issues of illegal immigration and a wall on the border with Mexico during his State of the Union address.In a response to Trump's speech, House Speaker Nancy Pelosi accused the president of "fear-mongering and manufacturing a crisis at the border".Trump's insistence on the wall led to a partial government shutdown in December and January, and funding again runs out on February 15, with no deal in sight.In Asia on Wednesday, the Japanese Nikkei 225 index closed closed up 0.1%. Financial markets in China and Hong Kong were closed for the Lunar New Year holiday. Trump said he would meet North Korean leader Kim Jong Un in Vietnam on February 27-28 for their second summit. "As part of a bold new diplomacy, we continue our historic push for peace on the Korean Peninsula," he told Congress in his State of the Union address.In the economic calendar on Wednesday are German factory orders at 0700 GMT followed by the US trade balance at 1330 GMT.