Kingfisher guides higher; Royal Mail to pay special dividend
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Futures tracking the FTSE 100 are 58.0 points higher to 6,987.0.
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Kingfisher said first-half sales and profit would beat expectations after the owner of B&Q achieved strong sales growth in the first quarter. Group sales were £3.45bn in the three months to the end of April - up 64.2% on a like-for-like basis from a year earlier and 22.5% from two years earlier. Kingfisher raised its first-half like-for-like sales outlook to 'mid to high teens' from 'low double digit' and said adjusted pretax profit would be £580-600m, ahead of its previous expectations. The company left its second-half guidance unchanged and said it was aiming to increase annual profit ahead of sales.
National Grid posted a 3% decline in underlying full-year profits before tax to £2.41bn with earnings per share down by 7% to 54.2p. Nevertheless, the energy transmission and distribution outfit expressed confidence in the outlook and bumped up its payout by 1.2% to 49.16p per share. It also guided towards capital expenditures over the five-year period ending in 2026 pf £30-35bn, while also telling shareholders that underlying earnings per share were set to grow at a compound annual growth rate of 5-7%.
The boom in parcel deliveries during the Covid pandemic as people were stuck at home helped Royal Mail report soaring annual profits although volumes slowed in April. Adjusted operating profit was slightly ahead of expectations at £702m, up 116%. Royal Mail revenue was up 24.1% in April with GLS up 22.3% year on year. Royal Mail parcel volumes were down 2% and addressed letters up 25%. Parcel volume growth at GLS remained strong until mid-April, with a subsequent slowdown given the high volumes observed last year. Shareholders will receive a special 10p a share dividend.
In the press
Boris Johnson is increasingly optimistic that coronavirus restrictions can end as planned on June 21 after early data suggested that the Indian variant was not spreading as fast as previously feared. Hospital admissions are “fairly flat” in variant hotspots while initial estimates suggest a smaller increase in transmissibility that would not risk overwhelming the NHS if restrictions end next month. - The Times
Ministers are hunting for a site for a major new car plant in a move stoking speculation that Elon Musk is exploring building Teslas in Britain. Sources said the Government’s new Office for Investment called on regional agencies to urgently submit potential locations for a new factory that would be a significant post-Brexit boost for Britain’s £80bn car industry. - Telegraph
Boohoo has bowed to pressure from shareholders and linked a £150m bonus scheme for its top managers to improvements in conditions at the factories it uses. The company said that the board would have the power to reduce the pay out to 15 key managers, including co-founders Carol Kane and Mahmud Kamani, if the group’s Agenda for Change programme was not implemented in full. The changes include establishing a whistleblowing system and responsible sourcing plan as well as publishing the names of all factories used by Boohoo worldwide. - Guardian
US close
Stocks on Wall Street closed in the red on Wednesday as technology issues slumped amid a cryptocurrency rout.
Tech stocks were again under the cosh as a result of a sharp drop in cryptocurrencies, with bitcoin falling more than 30% in a single day to $30,000, before recovering to end the session around $38,526, as a result of China warning financial institutions not to conduct crypto-related business.
Tesla, which holds a significant amount of bitcoin, dropped 2.49% during trading, while Microstrategy tanked 6.64% on the back of its decision to buy up a large amount of bitcoin for its corporate treasury and newly public crypto exchange Coinbase slipped more than 5.9%.
At the close, the Dow Jones Industrial Average was down 0.48% at 33,896.04, while the S&P 500 was 0.29% weaker at 4,115.68 and the Nasdaq Composite saw out the session 0.03% softer at 13,299.74.