LONDON MARKET PRE-OPEN: FirstGroup CEO Departs Amid Disappointing Year

LONDON (Alliance News) - Stocks in London are set to open higher on Thursday, tracking gains from Asia and the US, while FirstGroup's chief executive stepped down as the public transport company swung to an annual loss on a big US impairment. IG says futures indicate the FTSE 100 index of London large-caps to open 7.63 points higher at 7,697.20 on Thursday. The FTSE 100 index closed up 0.8% at 7,689.57 on Wednesday.In early corporate news, FTSE 100 speciality chemicals company Johnson Matthey said 2017 was a year of "significant progress" with performance in line with expectations.For the year ending March 31, revenue rose 17% to GBP14.12 billion from GBP12.03 billion last year and revenue excluding precious metals was up 8% to GBP3.845 billion from GBP3.58 billion.Pretax profit fell to GBP320.0 million from GBP462.0 billion in financial 2017; however on an underlying basis pretax profit was GBP486.0 million, up slightly from GBP482.0 million prior. Johnson Matthey proposed a final dividend of 80.0 pence, up 7% from 75.0p last year. "In the coming year we expect mid to high single-digit growth in operating performance. The changes we are making as we continue to develop our business give me confidence in our strategy to deliver, over the medium term, mid to high single digit earnings per share [growth], expanding return on invested capital to 20% and, as a result, a progressive dividend," said Chief Executive Robert MacLeod.FTSE 250 bus and train operator FirstGroup said Chief Executive Tim O'Toole is stepping down from his position with immediate effect, with Non-Executive Chairman Wolfhart Hauser to become executive chairman until a successor is found. The company said the process to find a new CEO is underway. Chief Financial Officer Matthew Gregory will be interim chief operating officer. O'Toole said it was the right time for him to step down.For the year ending March 31, FirstGroup swung to a pretax loss Of GBP326.9 million from GBP152.6 million profit last year. Adjusted pretax profit was down at GBP197.0 from GBP207.0 million. However, revenue was up 13% at GBP6.40 billion compared to GBP5.65 billion last year, though up just 1% excluding the new SWR rail franchise and a 53rd week. The company said the pretax loss reflects the "non-cash impairment of Greyhound goodwill and onerous contract provision on the TransPennine Express rail franchise". The impairment of Greyhound, a US intercity coach operator, was GBP277.3 million."This year's results fell short of our ambitions - we are disappointed that we did not make the further progress we intended based on the trends we saw at the end of the previous financial year," said Hauser."Looking forward, we expect group adjusted earnings to be broadly stable, with opportunities to improve the margins, returns and cash generated from our Road divisions, which together represent more than four fifths of the group's adjusted profit, in a period when we expect the contribution of our Rail portfolio to be positive but smaller while we put in place the passenger capacity and conditions for further profitable growth in the division in future," CFO Gregory said. Elsewhere, the UK Competition and Markets Authority cleared the union of FTSE 100-listed events firm Informa and midcap peer UBM. The regulator said Informa's of UBM acquisition doesn't qualify for investigation under merger law. Late Wednesday, online grocer Ocado Group and gambling firm GVC Holdings were promoted to the FTSE 100 following the quarterly FTSE index review. Conversely private hospital group Mediclinic International and outsourcer G4S were demoted from the large cap index as a result of the reshuffle.The changes come into effect from the start of trading on Monday, June 18.Sterling was quoted at USD1.3312 early Thursday, higher than USD1.3291 at the London equities close on Wednesday.In early economic news, UK house prices dropped unexpectedly in May, figures from Nationwide Building Society revealed.House prices decreased 0.2% on a monthly basis in May, in contrast to an increase of 0.1% in April. Economists had forecast an increase of 0.2% in May. On a yearly basis, house price growth eased to 2.4% in May from 2.6% a month ago. Prices were expected to gain 3%.Looking further ahead, much will depend on how broader economic conditions evolve, especially in the labor market, but also with respect to interest rates, Robert Gardner, Nationwide's chief economist, said.In the economic events calendar on Thursday there is France inflation readings at 0745 BST, Italy unemployment data at 0900 BST, UK mortgage approvals at 0930 BST and eurozone inflation and jobless data at 1000 BST. In the afternoon there is US personal consumption expenditure figures at 1330 BST.In the US on Wednesday, Wall Street ended higher, with the Dow Jones Industrial Average ending up 1.3%, the S&P 500 up 1.3% and Nasdaq Composite closing up 0.9%.Hinting that the US Federal Reserve will raise interest rates in June, the central bank said Wednesday that US economic activity expanded moderately in late April and early May with few shifts in the pattern of growth.This was the chief assessment of the Fed's Beige Book, an collection of anecdotal readings on the economy published eight times a year.The Fed said "Manufacturing shifted into higher gear" with most districts reporting a pickup in industrial activity and a third of the districts classifying activity as "strong".In Asia on Thursday, the Japanese Nikkei 225 index closed up 1.0%. In China, the Shanghai Composite is up 1.5%, while the Hang Seng index in Hong Kong is up 0.9%.China's Purchasing Manager Index rose 0.5% in May from last month, the National Bureau of Statistics said on Thursday.The official PMI for May was 51.9 up from 51.4 in April. It is the highest point since October 2017, according to the bureau. A figure of about 50.0 indicates growth while below that number indicates a contraction.