Restaurant Group reports recovery in sales, Electrocomponents revenue rises

London open

The FTSE 100 is expected to open 19 points higher on Tuesday, having closed up 1.48% on Monday at 7,051.59.

Stocks to watch

Wagamama owner Restaurant Group said it had seen an encouraging recovery in sales since Covid-19 restrictions had been lifted. For In the five weeks to May 16 around 130 Wagamama sites were open and traded at c.85% of comparable 2019 sales levels, representing a 15% outperformance of the market and “reflecting ongoing strong delivery volumes and good trading from outdoor space in many locations”. “The group currently has approximately 350 sites open across its Wagamama, pubs and leisure businesses, representing 95% of their respective combined estates. The concessions business currently only has four sites trading, given restrictions regarding international travel,” the company said on Tuesday.

Electrocomponents reported revenue growth of 2.5% to £2bn in its final results on Tuesday, with like-for-like growth of 1.4%, which it put down to “strong” market share gains in its key markets. The FTSE 250 company said its adjusted profit before tax fell 17% on a like-for-like basis to £181.7m, however, while its profit before tax was 19.5% lower for the year ended 31 March. It still confirmed 3.2% growth in the full-year dividend to 15.9p, in line with its progressive dividend policy, with adjusted dividend cover of 2x.

Newspaper round-up

The amount of CO2 production financed by Britain’s banks and asset managers is nearly double the UK’s annual carbon emissions, according to a new report. The study, published by environmental campaign groups Greenpeace and WWF, shows the City provided loans and investments for projects and companies that emitted 805m tonnes of CO2 in 2019. That is 1.8 times the UK’s own annual net emissions for the same year, which totalled 455m tonnes when discounting aviation and shipping, sectors that the UK government also does not include in its emissions calculations. - Guardian

The Bank of England will examine tightening banking regulations after the winding down of debt-laden Wyelands Bank, a lender majority-owned by troubled Liberty Steel boss Sanjeev Gupta. Appearing before MPs on the Treasury select committee on Monday, Bank of England governor Andrew Bailey said there could be lessons to be learned after Gupta took control of Wyelands. The bank subsequently made a series of loans to a network of companies controlled by his associates. - Guardian

Ministers are refusing to back a global overhaul of corporation tax championed by Joe Biden unless the White House supports their demands to crack down on US tech titans. President Biden is thought to have won around most major Western nations in his bid to impose a global minimum threshold for corporation tax, to prevent companies from sheltering profits offshore. - Telegraph

The US hedge fund leading the fight against FirstGroup's £3.3bn sale of its American divisions was initially willing to back the terms of the deal it now bitterly opposes, leaked documents show. Coast Capital Management, FirstGroup's largest shareholder, said it would support the sale of First Student and First Transit if four conditions were met in a letter on Apr 21, The Telegraph can reveal. - Telegraph

Most of EY’s 17,000 staff in Britain have been told to expect to work from home for at least two days a week after the pandemic. The Big Four accounting group is the latest large-scale office employer to announce a permanent shift towards hybrid working. KPMG, a rival, has told its UK staff that they will be expected to spend up to four days in the office every fortnight from June onwards. PWC, another leading accountancy firm, has told its 22,000 staff to expect to spend an average of two to three days a week in the office once restrictions are lifted. - The Times

US close

Wall Street's main market gauges finished in the green on Monday, after a weekend of wild gyrations in Bitcoin, and with traders wary that losses might ricochet against other segments of financial markets.

At the close, the Dow Jones Industrial Average was up 0.54% at 34,393.98, while the S&P 500 added 0.99% to 4,197.05 and the Nasdaq Composite advanced 1.41% to 13,661.17.

Over the weekend, Bitcoin fell from $38,000 to $31,000, before bouncing back to $38,563.79 at last count, according to Coindesk.

The selling pressure was not yet spilling over into other asset classes, although that could change upon a clean break below $30,000, according to Oanda’s senior Asia Pacific market analyst Jeffrey Halley.

“Once again, I reiterate, governmental [and] regulatory risk now represents an existential threat to the virtual currency space,” Halley said.