Vistry flags improving demand, Rolls-Royce cash outflow hastens

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The FTSE 100 is expected to open 23 points higher on Thursday, having closed down 0.55% at 6,156.16 on Wednesday.

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Housebuilder Vistry said improving demand as the coronavirus lockdown eased would help to restore gross margin in the second half of the year. Sales had continued throughout the lockdown with Vistry’s sales rate increasing to an average of 0.62 in the last four weeks and pricing remaining firm. Housing reservations, including partnerships activity totalled £1.66bn and Vistry Partnerships' contracting forward order book was £920m, up from £827m at May 20. “Given the present economic uncertainty, short-term financial guidance remains suspended. We will provide a further update with our half year results in September,” the company said on Thursday.

Rolls-Royce said its free cash outflow was £3bn in the first half of 2020 as widebody engine flying hours halved because of the "historic shock" to civil aviation caused by the Covid-19 crisis.The engine maker said it expected performance to improve in the second half and that annual free cash outflow would be about £4bn. It warned that the civil aviation industry would take several years to recover but said its defence business was resilient.

Rio Tinto will start planning to wind-down operations, and eventually close, its New Zealand Aluminium Smelters (NZAS) operations, it announced on Thursday, following a strategic review which showed it was no longer viable given high energy costs and a “challenging outlook” for the aluminum industry. The FTSE 100 mining giant said the review found that the smelter, which made Rio Tinto an underlying loss of NZD 46m (£23.95m) in 2019, was not economically viable due to energy costs that were “some of the highest in the industry”, as well as a challenging short-to-medium term aluminum outlook. It said discussions with a range of interested parties had failed to secure a power contract that would enable the operation to become both competitive and profitable.

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The negative impact of the coronavirus lockdown on Britain’s jobs market appears to have been greatest in May before a partial recovery in June, according to the Office for National Statistics (ONS). Both demand for and supply of labour were affected by lockdown restrictions, and the temporary closure of non-essential businesses caused demand for labour to fall, leading to fewer job vacancies, the ONS found, by studying job advert data from the online job search engine Adzuna. – Guardian

UberEats has joined up with Asda in the US tech firm’s first step into fast-track grocery delivery in the UK. The supermarket chain, which has previously tested takeaway and limited grocery deliveries via the Just Eat app in a handful of stores, said the new service would start in two outlets and could be extended to more if successful. – Guardian

Burger King UK's boss has warned that up to 1,600 jobs could be lost as a result of the coronavirus pandemic. Only about 370 of the restaurant chain's 530 UK stores have reopened since the nation went into lockdown. Chief executive Alasdair Murdoch told the BBC's Newscast the economic damage stemming from the crisis could ultimately force the company to permanently close up to 10pc of its stores. – Telegraph

The taxpayer has stumped up £10 billion for the Government’s bungled test and trace system, it emerged on Wednesday night. Calls for an inquiry mounted after it emerged the taxpayer has also spent an “eye-watering” £15 billion on PPE amid scrutiny of the Government’s procurement process. Campaigners blasted officials for an “enormous waste” of public money after PPE and the NHS’s bungled testing and contact tracing programmes accounted for almost four-fifths of extra health spending. – Telegraph

Brooks Brothers, the preppy American clothing chain once owned by Marks & Spencer, has filed for bankruptcy. The 202-year-old retailer, which has dressed 41 of 45 US presidents, from Franklin Roosevelt to Barack Obama, and which was used for all the seasons of the Mad Men television series, has requested protection from its creditors and plans to cut 700 jobs. - The Times

US close

Wall Street equities finished in positive territory on Wednesday following the sharp sell-off seen during the prior session.

The Dow Jones Industrial Average ended the session up 0.68% at 26,067.28, the S&P 500 added 0.78% to 3,169.94, and the Nasdaq Composite was 1.44% firmer at 10,492.50.

It was a mixed session for the Dow, which had opened 155.37 points higher before dipping below the waterline several times, eventually clawing back some of the losses recorded on Tuesday as concerns around the global economic outlook due to the Covid-19 pandemic weighed on sentiment.

While those same concerns also seemed to be in focus on Wednesday, with investors struggling to shake off fears around the rising number of new Covid-19 cases across the US, companies set to benefit from the reopening of the US economy like Carnival, Norwegian Cruise Line and Royal Caribbean were all higher.

The trio of cruise giants were up 5.08%, 4.65% and 5.28%, respectively.