LONDON MARKET PRE-OPEN: GSK get positive RSV vaccine trial results

(Alliance News) - Equities in London are seen opening lower on Friday with investors cautious ahead of key US inflation data at 1330 BST.

In early company news, drugmaker GSK reported positive trial results. Kitchenware brand ProCook issued a profit warning. Oil company Genel Energy announced a change in leadership.

IG futures indicate the FTSE 100 index will open 48.61 points lower at 7,427.60. The index closed down 116.79 points, or 1.5%, at 7,476.21 Thursday.

GSK unveiled positive pivotal phase three data for its respiratory syncytial virus vaccine candidate AReSVi 006 for adults. RSV is a common contagious virus affecting the lungs and breathing passages.

The RSV vaccine candidate showed statistically "significant and clinically meaningful efficacy" in adults aged 60 years and above, GSK explained.

GSK said interim analysis was reviewed by an Independent Data Monitoring Committee, and the primary endpoint was exceeded with no unexpected safety concerns observed.

Chief Scientific Officer Hal Barron said: "These data suggest our RSV vaccine candidate offers exceptional protection for older adults from the serious consequences of RSV infection. RSV remains one of the few major infectious diseases without a vaccine, and these data have the potential to meaningfully impact the treatment of RSV and may reduce the 360,000 hospitalisations and more than 24,000 deaths worldwide each year. Given the importance of these data, we plan to engage with regulators immediately and anticipate regulatory submissions in the second half of 2022."

ProCook Group said trading has been hurt by increasingly challenging market conditions, with customers affected by "exceptional pressures" on discretionary spending.

For the fourth quarter, ended April 3, ProCook said it was trading against "exceptionally strong comparatives" from the prior year, when it benefited from pent-up demand following the lifting of Covid-19 restrictions and the reopening of retail stores.

The retailer, which listed on the London Main Market back in November, said like-for-like sales have weakened across all channels, in line with the wider kitchenware market, though revenue remains "significantly higher" than the comparative pre-Covid period in 2019.

ProCook assumes the kitchenware market will remain highly challenging for the remainder of financial 2023. As such, it now anticipates that revenue for financial 2023 will be broadly in line with GBP69.2 million seen in financial 2022.

It also expects gross margins to remain broadly consistent year-on-year, and will continue to manage costs carefully.

Still, ProCook now expects to deliver adjusted pretax profit of between GBP4 million to GBP6 million for financial 2023. It didn't provide its adjusted pretax profit figure for financial 2022. In the first half of financial 2022, the six months that ended October 21 last year, underlying pretax profit was GBP3.6 million.

ProCook expects to release its financial 2022 results in late June.

"There are clear and numerous pressures on consumers at present which are impacting discretionary spend across retail as a whole and kitchenware is no exception. Whilst we are still seeing lots of new customers discovering the ProCook brand and buying our products, it is clear that many are tightening their belts. This creates a difficult short-term trading environment, but does not distract us from our strategic priorities, as we work towards our mission of becoming the first choice for kitchenware," said Chief Executive Officer Daniel O'Neill.

Genel Energy said that at its recent annual general meeting, Bill Higgs did not receive the required 50% majority of votes in favour of re-election as a director. At the May 12 AGM, 55% of the votes cast were against him. As such, Higgs has agreed to step down as chief executive of the company with immediate effect.

Genel said Higgs will take up a role as a special advisor to the chair until September 1, to support an orderly transition, after which he will remain as a consultant to the company.

Chief Operating Officer Paul Weir has been promoted to interim CEO with immediate effect. A search for a suitable replacement is underway and an announcement will be made in due course, it added.

The lower call in London comes ahead of an eagerly anticipated US inflation reading.

The US consumer price index is expected to show annual inflation remained steady at 8.3% in May, according to FXStreet-cited market consensus.

However, on Wednesday, the White House said it expected the inflation reading to show the rate was still "elevated".

Wall Street ended sharply lower on Thursday, with the Dow Jones Industrial Average down 1.9%, S&P 500 down 2.4% and Nasdaq Composite down 2.8%.

"European markets fell back for the third day in a row, while US markets also fell to their lowest levels this week, wiping out Tuesday's strong rally, as nervousness started to creep in ahead of today's US CPI report for May, with markets here in Europe set to open lower," commented CMC Markets analyst Michael Hewson.

In Asia on Friday, stocks were mixed. In Tokyo, the Nikkei 225 index closed down 1.5%. The Shanghai Composite was up 1.3%, and the Hang Seng index in Hong Kong was up 0.1%. The S&P/ASX 200 in Sydney ended down 1.3%.

China's factory-gate inflation dropped to its lowest in a year in May, official data showed, while consumer prices were stable despite Covid-linked transport disruptions.

The producer price index - measuring the cost of goods at the factory gate - rose 6.4% on-year, National Bureau of Statistics figures showed, in line with analyst expectations. The pace of annual increase slowed from an 8.0% rise in April and was the slowest since April last year, according to official data.

Meanwhile, China's consumer price index rose 2.1% year-on-year in May, the same pace as last month and just below analyst expectations.

The pound was quoted at USD1.2488 early Friday, down from USD1.2536 at the London equities close Thursday.

The euro was priced at USD1.0628, down from USD1.0657. Against the yen, the dollar was trading at JPY133.96 in London, lower against JPY134.16.

Brent oil was quoted at USD122.80 a barrel Friday morning, down from USD123.37 late Thursday. Gold stood at USD1,844.05 an ounce, up from USD1,842.36.

By Arvind Bhunjun; arvindbhunjun@alliancenews.com

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