Auto Trader reinstates dividend, dealmaker Drahi buys 12.1pc stake in BT

London open

The FTSE 100 is expected to open eight points higher on Thursday, having closed down 0.2% on Wednesday at 7,081.01.

Stocks to watch

A dramatic shift to buying cars online during pandemic lockdowns helped Auto Trader limit full-year losses and reinstate its dividend. The company on Thursday reported a 37% fall in pre-tax profit to £157.4m as revenue fell 29% to £262.8m. A dividend of 5p a share was declared. In the year ahead, Auto Trader said it expected to deliver high single digit growth on full-year 2020 average revenue per retailer and operating profit margins in line with 2020 levels.

Patrick Drahi, a multibillionaire telecoms dealmaker, has bought a 12.1% stake in BT to capitalise on the company's involvement in the rollout of faster broadband in the UK. Drahi has bought 1.2 billion BT shares through Altice UK, which he wholly owns. Altice is Drahi's telecoms group and Altice UK is separate from other companies in the group. Based on Wednesday's closing share price, Drahi's stake in BT would be valued at about £2.2bn.

Energy services and outsourcing company Mitie Group reported “good trading resilience” through the coronavirus crisis in its full-year results on Thursday, with revenue, including its share of joint ventures and associates, rising 19.1% to £2.59bn. The FTSE 250 firm said operating profit before other items fell to £63.4m from £86.1m, however, being impacted by revenue mix and reduced project work due to Covid-19. It said it had a stronger second half, with revenue growth of 6.5% over the prior year.

Newspaper round-up

The UK aviation sector has warned that airports are likely to lose at least £2.6bn this summer as the “chaotic” Covid traffic light system halts international travel. Airports said the coming months could deal a heavier financial blow than 2020, while airlines called for grants to offset the impact of travel restrictions and protect jobs. - Guardian

Britain will seek to exclude the City of London’s financial services companies from a global tax overhaul targeting the world’s most profitable businesses agreed between G7 finance ministers last weekend. The chancellor, Rishi Sunak, is concerned that under a version of the plan put forward by the US president – which involves redistributing the profits of the world’s 100 largest businesses – digital businesses such as Google, Amazon and Facebook will be joined by banks that he says already pay a fair share of tax. - Guardian

Ministers are considering a radical plan to axe tariffs on hybrid and electric cars as part of efforts to speed up Boris Johnson's switch to a carbon-neutral economy. Officials are understood to be eyeing the plan as part of efforts to send a message that the country will champion free trade after Brexit and is committed to limiting climate change. - Telegraph

Britain will win a massive economic boost and thousands of businesses and workers will get their "mojo" back if lockdown freedom day goes ahead as planned on June 21, Andy Haldane, the Bank of England's chief economist, has said. Mr Haldane said that an end to the last of the Covid restrictions would be "fantastic" for growth as the country recovers from its deepest recession in centuries. - Telegraph

A private British company with ambitious plans to make electric flying taxis is close to agreeing to be taken over by a Wall Street blank cheque company in a deal valuing it at almost $2 billion. Bristol-based Vertical Aerospace is in advanced talks with Broadstone Acquisition Corp, according to Sky News, citing City sources, with a deal due to be announced as early as Thursday. - The Times

US close

Wall Street reversed earlier gains to finish weaker on Wednesday, as major indices continued to search for direction ahead of the release of May's consumer price index tomorrow.

At the close, the Dow Jones Industrial Average was down 0.44% at 34,447.14, while the S&P 500 lost 0.18% to 4,219.55 and the Nasdaq Composite was off 0.1% at 13,911.75.

The Dow Jones closed 152.68 points lower on Wednesday, adding to the losses recorded in the previous session even as major indices continued to hover near record levels.

While things were mostly quiet ahead of Thursday’s CPI print, reopening play Carnival slipped into negative territory to finish down 2.03%.

So-called ‘meme stocks’ were also in focus, with Reddit users now turning their attention to Clover Health Investments, which slid 23.61% following an 85% rally in the previous session.