WH Smith on way back to 'meaningful' profit, Burberry revenues return to pre-Covid levels

London open

The FTSE 100 is expected to open 20 points lower on Thursday, having closed up 0.91% at 7,340.15 on Thursday.

Stocks to watch

WH Smith said it was set for a return to meaningful profit next year as it narrowed annual losses as the travel sector opened up from Covid-19 restrictions. The stationery retailer on Thursday reported a pre-tax loss of £116m compared with a loss of £280m last year. Revenue fell to £886m from £1.02bn a year earlier with sales forecast to hit 2019 sales levels in this financial year and travel revenue at 84% of pre-pandemic levels last month.

Luxury fashion brand Burberry said on Thursday that revenues are now back at pre-Covid levels, as it reported a jump in interim pre-tax profit and reinstated its dividend. In the 26 weeks to 25 September, pre-tax profit rose to £191m from £73m in the same period a year ago, while adjusted pre-tax profit came in at £180m versus £36m. Revenues grew 45% to £1.2bn.

British insurer Aviva said it was meeting its commitment to give back at least £4bn to shareholders after pressure from Swedish activist investor Cevian. The company on Thursday said it had completed £450m of a £750m share buyback, with at least £4bn to be returned by the 2022 half year, and added that it would also meet a £300m cost savings target next year.

Newspaper round-up

Elon Musk has sold about $5bn in shares amounting to roughly 3% of his Tesla holdings, the billionaire reported in filings on Wednesday, just days after he polled Twitter users about selling 10% of his stake. About $4bn worth of the sale – 3.6m shares – could be considered as counting towards his 10% pledge on Twitter. Another $1.1bn worth, amounting to 934,000 shares, was sold under an options arrangement to acquire nearly 2.2m shares that were already in train before the poll. - Guardian

Scam victims are facing a “reimbursement lottery” when they ask their banks to compensate them for their losses, the consumer group Which? has claimed. Three-quarters of customers who were turned down by their banks and took their cases to the financial ombudsman have been told that they should have received a payout, and the consumer group said with some banks this rose to eight in 10. - Guardian

Brussels has been forced to extend London's lucrative euro clearing rights in a post-Brexit boost for the City as it seeks to protect its role as a global hub. The European Commission has granted permission for banks on the Continent to continue accessing Britain's €660 trillion (£563 trillion) clearing market beyond an initial deadline of June 2022, amid fears that cutting them off would damage financial stability. - Telegraph

The centrepiece of the Nine Elms development in London, Europe's biggest regeneration project, has sold fewer than one in 15 homes in its first year of marketing, fuelling fears of a multibillion-pound white elephant close to the heart of the capital. Nine Elms Square, a £3bn joint venture between Chinese developers R&F and CC Land due for completion in 2023, has struggled to sell properties at the former industrial site south of the Thames near Vauxhall, Telegraph analysis of regulatory filings shows. - Telegraph

The largest initial public offering in the world this year and one of the biggest in American history made a spectacular start yesterday as shares in a company touted as a future rival to Tesla surged by as much as 53 per cent. The market value of Rivian Automotive, an electric vehicle start-up, briefly eclipsed $100 billion after its shares started trading on New York’s Nasdaq exchange. In contrast, Ford, one of the company’s investors and a titan of the American carmaking sector, is valued at $77.4 billion, while General Motors, another traditional industry heavyweight, is worth $86 billion. - The Times

US close

Wall Street stocks finished in negative territory on Wednesday, as market participants sifted through consumer inflation numbers that came in hotter than anticipated.

At the close, the Dow Jones Industrial Average was down 0.66% at 36,079.94, as the S&P 500 lost 0.82% to 4,646.71 and the Nasdaq Composite was off 1.66% at 15,622.70.

The Dow lost 240.04 points through the course of Wednesday’s session, extending the points it gave up on Tuesday after October’s producer price index dropped 0.6%.

“Markets don’t like surprises, particularly not when they come in the form of 30-year high inflation numbers,” said AJ Bell financial analyst Danni Hewson.

“Fuel and food were two of the main drivers, which means pretty much every US consumer is feeling the heat.

“There is still a valid argument that these price hikes are transitory and that supply chains just need to work through the kinks, but transitory can feel like a long time especially when there’s no way to know when things will get back on some kind of stable ground.”