(Alliance News) - Stock prices in London are seen opening higher on Tuesday, with the FTSE 100 continuing to benefit from weakness in the pound, which has steadily lost ground amid conflict in Westminster over Brexit.
In early UK company news, plumbing and heating products supplier Ferguson said it will demerge its UK business, Lloyds Banking has bought Tesco's mortgage portfolio, and Restaurant Group swung to an interim loss due to property impairments.
IG futures indicate the FTSE 100 index is to open 11.16 points higher at 7,293.10. The blue chip index closed up 1.0%, or 74.76 points at 7,281.94 on Monday.
Ferguson said it intends to demerge its UK operations, subject to shareholder approval, following the conclusion of a detailed review of the company's assets over several years.
Ferguson, which now generates the bulk of its revenue in the US, said upon completion, Wolseley UK will become an independent listed company serving residential and commercial trades people and customers.
The company formerly known as Wolseley said the separation will simplify the company's operations and enable Wolseley UK to focus exclusively on customers in the UK market. Following the demerger Ferguson will be wholly focused on serving customers in North America, the company added.
"The board has kept listing structure under review over several years. Following the significant simplification of the group over that period and the demerger of Wolseley UK, Ferguson will be wholly focused on attractive markets in North America. In light of this, the board is again considering the most appropriate listing structure for the group going forward. A range of options and associated costs and benefits will be assessed, and the company will further consult with shareholders in due course," Ferguson said.
Ferguson also said Chief Executive Officer John Martin will step down on November 19, and Kevin Murphy is to succeed him as CEO. Murphy is CEO of Ferguson's US operations.
Lloyds Banking Group said it has acquired Tesco's GBP3.7 billion UK residential mortgage portfolio.
The deal will see 23,000 mortgage customers transfer to Halifax - a division of the Bank of Scotland, in turn a wholly owned subsidiary of Lloyds - from Tesco Personal Finance, which falls under Tesco Bank.
Lloyds and Tesco expect the transfer of customers to begin at the end of September with the legal title change happening in March next year.
The purchase price, of about GBP3.8 billion, represents a 2.5% premium on gross book value. Lloyds will fund the acquisition from existing internal resources, noting the deal will have "minimal" impact on capital.
Restaurant Group said the enlarged group was well-placed to generate growth following the purchase of Wagamama.
For the half year to June 30, Restaurant Group swung to a pretax loss of GBP87.7 million from GBP12.2 million profit last year. The company attributed the loss to a substantial property and plant impairment charge. Adjusted pretax profit was up 36% to GBP28.1 million from GBP20.7 million last year.
Restaurant Group said like-for-like sales were up 3.7% in the first 34 weeks of the year and up 0.2% in the past 6 weeks, and added that trading was broadly in line with annual expectations.
Restaurant Group declared a 2.1p interim dividend.
Irish carrier Ryanair Holdings said passenger numbers were up 8% to 14.9 million customers in August. Rolling annual customer numbers were up 10% to 149.2 million.
The pound was quoted at USD1.2012 early Tuesday, down from USD1.2062 at the London equities close Monday, amid fears of a snap UK general election and a no-deal Brexit.
UK Prime Minister Boris Johnson faces a showdown in Parliament after he vowed to push for a snap general election if rebel MPs succeed in a bid to seize control of parliamentary proceedings.
Parliament returns on Tuesday after recess, with MPs looking to take control of Commons business to allow them to discuss proposed legislation to block a no-deal Brexit.
Addressing the nation outside Number 10, the prime minister insisted "I don't want an election, you don't want an election" but moments later a senior government source said any bid to "wreck" the UK's negotiating position would prompt a motion for an early election.
The source said Johnson would request a general election on October 14 if the move was successful. A motion for the snap poll would be tabled by the government which would require the support of two-thirds of MPs under the Fixed-term Parliaments Act.
But the source said the government's motion on an early general election would be published before MPs vote on Tuesday so MPs would know the consequences of voting against the government.
In economic news, UK sales flatlined in August, the latest British Retail Consortium-KPMG Retail Sales Monitor showed.
On a total basis, sales were flat year-on-year in August, following a rise of 1.3% in the same month a year ago. On a like-for-like basis, sales were down 0.5% after a 0.2% rise a year ago.
In the economic calendar on Tuesday, UK's construction PMI is out at 0930 BST. In the US, there is a manufacturing PMI at 1445 BST and construction spending at 1500 BST.
The Japanese Nikkei 225 index closed flat. In China, the Shanghai Composite is down 0.2%, while the Hang Seng index in Hong Kong is down 0.3%.
US financial markets will re-open on Tuesday after being closed for the Labor Day holiday on Monday.
Ferguson (FERG)