IDS swings to heavy loss, BT full-year core profits rise
London open
The FTSE 100 is expected to open 39 points higher on Thursday, having closed down 0.36% on Wednesday at 7,723.23.
Stocks to watch
Royal Mail owner International Distributions Services swung to a hefty full year loss after a bruising year-long battle with unions over pay and conditions. Royal Mail posted an adjusted operating loss of £419m, compared with a profit of £416m due to industrial action by the Communication Workers Union, lower test kit volumes and a weaker online retail market, the company said on Thursday. The group, which includes the GLS international unit, reported an adjusted loss before tax of £110m, against a profit of £707m a year earlier.
UK telecoms giant BT Group posted a rise in annual adjusted core profits after growth in its Openreach and consumer divisions offset a fall in enterprise.Adjusted core earnings were up 5% to £7.9bn. On a pre-tax basis BT posted a 12% fall in profit to £1.7bn due to increased depreciation from network build and specific items, partially offset by adjusted EBITDA growth. Revenue was £20.7bn, down 1% with the growth in Openreach more than offset by decline in the other units, the company said on Thursday.
Newspaper round-up
Water companies have apologised for repeated sewage spills and pledged to invest £10bn this decade in an attempt to quell public anger over pollution in seas and rivers. The companies will triple their existing investment plans to plough funds into the biggest modernisation of sewers “since the Victorian era” to reduce spills of overflowing sewage into England’s waterways. – Guardian
San Francisco has reached a $230m settlement with Walgreens over the corporation’s role in the city’s unprecedented opioid crisis. The settlement is the largest ever awarded to a local government amid years of continuing, nationwide opioid-centred litigation, according to San Francisco’s city attorney. – Guardian
Barclays is planning to hire 200 new traders in Paris in the latest blow to the City of London in the wake of Brexit. The British lender said it expects to increase its headcount in the French capital by about two-thirds over the next two to three years as it increasingly becomes Europe’s main trading hub. – Telegraph
The former chief executive of London Capital & Finance, the collapsed investment company, received a suspended jail sentence after he admitted concealing £95,000 from investigators that was used to fund his luxury lifestyle. A judge at Southwark crown court in London sentenced Michael Thomson, 50, to ten-months in jail, suspended for two years, yesterday after he was found to have breached a restraint order imposed on his finances. – The Times
Deutsche Bank has agreed to pay $75 million to settle a lawsuit which accused it of helping to facilitate sex trafficking by the paedophile and financier Jeffrey Epstein, according to lawyers for the plaintiffs. Alleged victims of Epstein, led by a woman listed anonymously as Jane Doe, launched legal action against the investment bank last November. – The Times
US close
Wall Street's key indices finished significantly higher on Wednesday, as optimism over the possibility of a resolution to the looming federal debt ceiling boosted investor confidence.
The Dow Jones Industrial Average climbed 1.24% to close at 33,420.77, while the S&P 500 added 1.19% to conclude the session at 4,158.77, and the tech-heavy Nasdaq Composite ended the day 1.28% higher at 12,500.57.
Negotiations between the White House and congressional Republicans over the debt ceiling had been ongoing for several days, but despite the optimism, a significant breakthrough was yet to be achieved.
Financials also contributed to the market's rally, as regional banking stocks experienced a healthy bounce.
On the currency front, the dollar held steady against sterling at 80.08 pence, and saw a slight decrease of 0.01% on the euro to last trade at 29.24 euro cents.