London pre-open: Stocks seen flat as investors mull GDP

(Sharecast News) - London stocks were set for a flat open on Tuesday as investors mull the latest UK GDP reading.
Figures released earlier by the Office for National Statistics showed the economy grew 0.4% in February following a 2.2% decline in January, and versus expectations of 0.6% growth.

An ONS spokesperson said: "The economy showed some improvement in February after the large falls seen at the start of the year but remains around 8% below its pre-pandemic level.

"Wholesalers and retailers both saw sales pick up a little, while manufacturing improved with car producers experiencing a partial recovery from a poor January.

"Construction grew strongly after revised figures showed they had struggled in the last couple of months.

"Exports to the EU recovered significantly from their January fall, though still remain below 2020 levels. However, imports from the EU are yet to significantly rebound, with a number of issues hampering trade."

In corporate news, JD Sports Fashion reported a fall in full year profits, largely supported by a strong performance in the US, as it reinstated dividend payments and forecast 2021/22 profits of £475m - £500m.

The company said pre-tax profits fell to £324m from £348m on revenues of £6.17bn, up from £6.11bn a year earlier. The total dividend was lifted to 1.44p a share from 0.28p.

Babcock cautioned investors to expect impairments and charges worth £1.7bn for the full year ending 31 March following a contract profitability and balance sheet review.

Nevertheless, the "vast majority" of those charges would be one-off and non-cash affecting in nature. Changes in the defence engineer's operating model meanwhile were expected to result in annual savings of roughly £40m. Asset disposals worth at least £400bn were also on the table.

Management expressed caution about the 2022 financial year, because it was expected to be one of transition, yet the aim was to return the firm to strength without recourse to an equity issue.

Just Eat Takeaway's quarterly order growth accelerated for the fourth consecutive quarter, with the company processing 200 million orders in the first three months of 2021, representing a 79% increase over the same period in 2020.

Gross merchandise value amounted to €4.5bn (£3.89bn) in the period, up 89% on a constant currency basis. It said the UK was the fastest-growing segment and its main growth driver, with Just Eat UK processing 64 million orders in the first quarter of 2021, which was 96% higher year-on-year.