National Express acquires Spanish bus operator, DS Smith annual profit falls

London open

The FTSE 100 is expected to open 17 points higher on Tuesday, having closed up 0.64% on Monday at 7,062.29.

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National Express on Tuesday said current trading was slightly ahead of expectations as it further expanded European operations with the €13m acquisition of Spanish urban bus operator Transportes Rober. “Trading performance across the group continues to improve, slightly ahead of management expectations, and we have continued to win new contracts, notably in corporate shuttles both in North America and the UK,” the company said in a statement. Rober has operated the urban bus contract in Granada for more than 20 years. National Express said the purchase “represents a further step in consolidating the regional and urban bus markets”.

DS Smith said the current financial year had started well as the packaging company reported a sharp drop in annual profit caused mainly by higher costs and lower prices during the pandemic. Pretax profit for the year to the end of April fell 38% at constant currency to £231m as revenue dipped 1% to £5.98bn. DS Smith declared a final dividend of 8.1p a share, taking the annual payout to 12.1p a share. Adjusted operating profit fell 24% to £502m.

GlaxoSmithKline announced on Tuesday that ViiV Healthcare, which it majority owns with minority shareholders Pfizer and Shionogi, has entered a collaboration and licence agreement with Halozyme Therapeutics, giving exclusive access to Halozyme's ‘ENHANZE’ drug delivery technology, recombinant human hyaluronidase PH20 enzyme, for specific targets used in the treatment and prevention of HIV.

Newspaper round-up

The industries most affected by the UK’s delayed reopening will need to find almost £50m to cover wages once the government’s furlough scheme is cut back on 1 July, according to analysis by the Labour party. Hospitality firms and cultural and arts businesses, which still have large numbers of workers on furlough, will need to cover the higher cost of keeping workers on the scheme even though they have no choice but to limit the number of customers they serve over the next month or are forced to remain shut. - Guardian

The heads of the UK’s largest business lobby group and two major City employers have warned against giving workers the legal right to demand remote working, claiming it would harm young employees and city centre economies. Lord Bilimoria, the president of the CBI, said that while employees should be able to request the option of working from home, flexible working arrangements must be allowed to evolve in their own way. - Guardian

Rupert Murdoch is exploring a tie-up with BT’s television arm, The Telegraph can reveal, as the nonagenarian attempts to reshape and secure his media legacy amid the decline of print newspapers. BT has held talks about a potential partnership with News UK, the publisher of the Sun and the Times, City sources said. - Telegraph

MPs are preparing to intervene in a potential takeover of Morrisons as investors brace for a feeding frenzy after the supermarket rejected a £5.5bn offer from private equity. The Business, Energy and Industrial Strategy Committee is understood to be preparing to write to the competition watchdog to seek assurances following the takeover offer from Clayton Dubilier & Rice (CD&R). The Competition and Markets Authority would be expected to look into a takeover of such a large UK business. - Telegraph

The accounting watchdog is seeking a joint-record £15 million fine against KPMG after a draft tribunal report found “many very serious” findings of misconduct relating to the company’s role in the sale of the mattress company Silentnight to the private equity firm HIG. The Financial Reporting Council (FRC) is also pushing for a fine of at least £500,000 against David Costley-Wood, the former restructuring partner involved, as well as a ban from his membership of the Institute of Chartered Accountants in England and Wales (ICAEW) for 15 years and from an insolvency licence for 15 years. - The Times

US close

Wall Street stocks recorded solid gains on Monday as major indices bounced back from their worst week since October.

At the close, the Dow Jones Industrial Average was up 1.76% at 33,876.96 and the S&P 500 was 1.40% firmer at 4,224.79, while the Nasdaq Composite saw out the session 0.79% stronger at 14,141.48.

The Dow Jones closed 586.89 points higher on Monday, reversing losses recorded on Friday after news that the Federal Reserve had raised its inflation expectations and forecast rate hikes in 2023 earlier in the week continued to weigh on sentiment.

The effects of the Fed's policy meeting last week were still being felt across global markets at the start of the new week, with stocks and bond yields having fallen as a result of the news amid a sharp repricing of risks due to the central bank raising rates.

Reopening plays such as Royal Caribbean and Boeing traded higher, while commodity stocks, which were hard hit during last week's selloff, like Exxon and Chevron also ended the session in the green.