LONDON MARKET PRE-OPEN: William Hill Struggles, Plans Store Re-Opening

(Alliance News) - Stocks in London are pointed higher on Friday morning following a better-than-expected industrial production print in China.

In early UK company news, bookmaker William Hill said trading has been significantly hurt by the coronavirus pandemic, but it received some welcome financial relief. Signature Aviation is outperforming its market, and Moneysupermarket.com has nabbed Just Eat's CEO to run its business.

IG says futures indicate the FTSE 100 index of large-caps to open 46.96 points higher at 5,788.50 on Friday. The blue-chip index closed down 162.51 points, or 2.8%, at 5,741.54 on Thursday.

"Equity markets in Europe tumbled yesterday as sentiment was hurt by a mixture of health fears in relation to the reopening of economies and concerns the economic downturn will last longer than originally thought," CMC Markets analyst David Madden said.

He continued: "A common theme this week has been concern about the rise in the infection rates when governments unwind their lockdown restrictions.

"Germany and South Korea have taken steps to recommence certain parts of their economies, but it has come at a cost - a jump in the number of new coronavirus cases. Traders are fearful that this trend will be seen in other countries that have eased restrictions too. Policymakers now have a new challenge on their hands – how will they reopen portions of the economy without sparking a second wave of the Covid-19 crisis?"

In Asia on Friday, the Japanese Nikkei 225 index closed up 0.6%. In China, the Shanghai Composite added 0.2%, while the Hang Seng index in Hong Kong was marginally higher in late trade.

China's industrial output returned to growth for the first time this year in April, official data showed, as the country continued its gradual recovery after the coronavirus brought activity to a near-halt.

Madden commented: "Traders responded well to the improving data from China, which is why stocks in Asia are a little higher. The European markets are on track to recoup some of yesterday's losses."

Industrial production grew a more-than-expected 3.9% year-on-year last month in a sign that China – where the pathogen first emerged – is recovering from tough lockdown measures now seen in other parts of the world.

A Bloomberg poll of analysts had forecast growth of 1.5%.

Industrial production growth last month was better than the 1.1% contraction in March and 14% collapse in the first two months of 2020 as well – the first time industrial output shrank in three decades as the virus ravaged the economy.

But retail sales remained in contraction territory, National Bureau of Statistics data showed, signalling that consumer demand is still weak despite China's initial success in containing the outbreak.

Retail sales were down 7.5% from a year ago, an improvement from a 16% plunge in March.

Sterling was quoted at USD1.2202 early Friday, down slightly from USD1.2210 at the London equities close on Thursday.

The euro traded at USD1.0808 early Friday, unchanged from USD1.0808 late Thursday. Against the yen, the dollar was quoted at JPY107.21, up from JPY107.05.

In London, midcap bookmaker William Hill's trading in the 17 weeks to April 28 have taken a serious hit from the Covid-19 pandemic.

For the period, total net revenue plunged 27%, with net gaming revenue down 27% and sportbook wagers falling 31%.

In the 10 weeks to March 31 - before the national lockdowns came into effect - William Hill's total net revenue slipped 5%, due to a 24% drop in net gaming revenue.

In the period from March 11 to April 28 - during which the firm has had to close its high street stores - total net revenue cratered 58%. Net gaming revenue was down 33% and sportsbooks wagers fell 70%.

In response to this, William Hill looked to cut its cash costs, reducing its monthly cash outflow to GBP15 million and has agreed a covenant waiver until 2021.

The bookmaker said: "We conclude the period in a strong financial position with significant headroom. The outstanding amount on the 2020 bond of GBP203 million is scheduled for repayment in June and we have ensured that capital expenditure related to growth opportunities has been preserved, enabling us to press ahead with our plans to grow the US business and continue to develop our product."

It said the bank covenants for its revolving credit facility have been waived for 2020 and reset for 2021.

William Hill is planning a phased reopening of its stores in the second half of 2020.

Aviation support services firm Signature Aviation said it was able to outperform its market, in an "encouraging sign"

For the three months to March 31, US Business & General Aviation flight movements as reported by the FAA were down 8.9%, whereas like-for-like revenue decline in the company's Signature unit was 7.5%.

"Our outperformance against the US market, as measured by the FAA flight movements, is therefore an encouraging 140 basis points," the firm added.

In the first four months of 2020, Signature Aviation's revenue is down 28%, following a 72% drop in April.

Chief Executive Mark Johnstone said: "Encouragingly, we have seen some early signs of an improvement in flight activity in the US in May. Our business continues to have attractive fundamentals and medium-term prospects, and our ability to both manage cost in a timely manner and deliver robust cash generation has contributed to the group being cash flow positive in the month of April."

National Express said its revenue in April has been halved from the year before but was able to generate positive Ebitda "slightly ahead" of internal expectations.

National Express noted it has started selling coach tickets for a "core network" in the UK for a July 1 re-opening.

Computacenter said its trading in the period from mid-April to mid-May has "accelerated", and has struck some "substantial" Technology Sourcing contracts.

"These incremental volumes mean that we now believe that the first half of 2020 will be considerably ahead of the same period of last year," Computacenter added.

Online fashion retailer boohoo confirmed it has raised GBP197.7 million from a private placing of 58.1 million shares at 340p each.

Moneysupermarket.com has appointed Just Eat's CEO Peter Duffy as its own boss, starting from September.

Current Moneysupermarket.com CEO Mark Lewis is stepping down from the role at the end of August.

In New York on Thursday, Wall Street ended in the green. The Dow Jones Industrial Average ended 1.6% higher, the S&P 500 1.2%, and the Nasdaq Composite 0.9%.

US President Donald Trump on Thursday said he does not want to talk to his Chinese counterpart, and mused about ending the world's largest trading relationship, amid rising tensions about the coronavirus pandemic.

Speaking in an interview with Fox Business Network, Trump said he had a "very good relationship" with Chinese President Xi Jinping, but "right now, I don't want to speak to him".

"There are many things we could do," Trump said. "We could cut off the whole relationship".

Gold was quoted at USD1,737.00 an ounce early Friday, up on USD1,730.24 on Thursday. Brent oil was trading at USD32.15 a barrel early Friday, higher against USD30.12 late Thursday.

The economic events calendar on Friday has eurozone GDP at 1000 BST, and US retail sales figures at 1330 BST.

By Paul McGowan; paulmcgowan@alliancenews.com

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