Mitchells & Butlers sales slide, National Express trading above previous guidance

London open

The FTSE 100 is expected to open 68 points lower on Thursday, having closed up 1.2% at 5,899.26 on Wednesday.

Stocks to watch

Harvester and All Bar One owner Mitchells & Butlers said like-for-like sales had fallen 3.1% so far in its fiscal year as it warned of a “challenging and uncertain” future after the UK government imposed new Covid-19 restrictions on the hospitality industry. The pub and restaurant owner said sales plunged by a third in July and had bounced back during August’s ‘Eat-out-to-help-out’ discount scheme before settling at a 6.4% decline this month before the new curbs were announced. It added that it had unsecured cash balances of around £100m, in addition to undrawn committed unsecured facilities of £140m.

National Express said it traded “slightly above” its previously-guided base during the Covid-19 pandemic in an update on Thursday, as it managed customer relationships, contract details and service requirements. The FTSE 250 passenger transport operator said “tight” cost controls remained in place, driving positive EBITDA and cash flow. It also reported a number of “notable” contract wins, with the company provisionally awarded an up-to nine year, 240 urban bus contract in Lisbon, Portugal, and a five-year paratransit contract for up to 75 vehicles in California.

Smiths Group reinstated its dividend as the FTSE 100 engineer said business had stabilised after a sharp drop in annual profit. Statutory operating profit fell 26% to £241m in the year to the end of July as revenue rose 2% to £2.55bn. Headline operating profit fell 11% to £382m and underlying revenue fell 1%. After scrapping its interim dividend in March, Smiths proposed a total dividend for the year of 35p per share, down from 45.9p a year earlier.

Newspaper round-up

Ocado could make up to 200 workers at its Hatfield call centre redundant as it shifts the roles to Sunderland in an apparent cost-cutting move at a time when the online grocer is recording record profits. One call centre worker involved in a 45-day redundancy consultation process which started this week described the cuts as “quite brutal” for staff who had worked throughout lockdown as Ocado responded to a huge surge in orders. - Guardian

A quarter of British pubs and restaurants fear collapse before Christmas without further government support, according to a wide-ranging survey that warns the pandemic could cost 675,000 jobs in the hospitality sector by February. As fresh analysis showed that more than £750m of late-night revenues could be affected by the imposition of a 10pm curfew in England, hospitality businesses said they have been “teetering on the edge” and now face the prospect of going under. - Guardian

Britain's biggest banks, law firms and accountants have cancelled plans to bring thousands of workers back to the office following new advice from ministers - dragging the City back into shutdown and sparking fresh fears for London's tottering economy. Some of the Square Mile's biggest businesses have said that staff should work from home again just weeks after beginning to reopen, as the rules are changed amid a resurgence in Covid infections. - Telegraph

The City watchdog is being urged to use its enforcement powers against one of Britain’s best-known insurers to force the company to start making payouts to small businesses hit by the pandemic. Lawyers acting for a group of almost 400 firms want Hiscox, the FTSE 250 insurer, to start making interim payments to some of the companies after a High Court judgment last week. - The Times

Companies appear less prepared for the UK’s pending departure from the European Union now than they were last year, a corporate lobby group said. Just 38 per cent of businesses have conducted a Brexit risk assessment in 2020, a poll of 527 companies by the British Chambers of Commerce (BCC) found, as many prioritise grappling with the fallout from Covid-19.- The Times

US close

Wall Street trading closed weaker on Wednesday. amid heightened restrictions to stem Covid-19 cases in Europe and an ongoing stalemate in negotiations for a second stimulus bill.

At the close, the Dow Jones Industrial Average was down 1.92% at 26,763.13, the S&P 500 slid 2.37% to 3,236.92, and the Nasdaq Composite was 3.02% weaker at 10,632.98.

The Dow closed 525.05 points lower on Wednesday, having opened just above the waterline before dipping into the red before lunchtime..

As lawmakers remained at an impasse on stimulus talks in Washington, Federal Reserve Chairman Jerome Powell warned that the US economy could begin to decelerate in coming months if Congress fails to provide further fiscal stimulus to average Americans.

Powell cautioned Congress' select subcommittee that many economic forecasts relied on fiscal action but also sought to reassure market participants that the Fed would support the economy "for as long as it takes".