Rolls Royce reiterates full-year guidance; Burberry reinstates dividend

London open

Futures on the FTSE 100 were down by 62.50 points to 6,921.0.

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UK telecoms operator BT said it was extending its full-fibre broadband network to 25m premises by the end of 2026, and would aim to fund the 5m extra premises through a joint venture.

The company also reported a 7% fall in revenue and a 6% fall in adjusted earnings for the year to end-March, reflecting the impact of Covid-19.

Rolls-Royce said engines flew at 40% of 2019 levels in the first four months of this year as the Covid-19 pandemic continued to impact the airline industry.

The company, which is paid for the number of hours its engines fly, said it was largely driven by demand for cargo flights and the maintenance of key routes “broadly unchanged from the run rate at the end of 2020 and consistent with our planning assumptions”.

"While the timing of the recovery remains uncertain, the progress of Covid-19 vaccination programmes in a significant number of countries, particularly the US and UK, is encouraging. Combined with increased testing, vaccination programmes are key enablers of further recovery in international air travel."

Burberry reported a decline in full-year sales and operating profits, but took the decision to reinstate its dividend on the back of strong cash generation.

Sales at constant exchange rates declined 10% from their year earlier level to reach £2.34bn, while the luxury fashion retailer's operating profits shrank 8% to £396m. Nevertheless, full-price sales jumped by 12% in the last quarter of its financial year, led by mainland China, South Korea and the US.

On a comparable basis, sales for those same three months were off by 5%, despite 16% of its stores remaining shut. The full-year payout was reinstated at 42.5 per share.

In the press

The head of the UK financial regulator has promised to consider imposing restrictions on a system that allowed the now collapsed bank Greensill Capital to operate in the UK without a licence. Nikhil Rathi, the chief executive of the Financial Conduct Authority (FCA), told MPs that Greensill’s failure had led the regulator to look “much more closely at the systems of control that the principle has in place and potentially also plac[e] some restrictions on the scale of business that can be undertaken through this mechanism”. - Guardian

Guidance that people in England should work from home if they can is to be dropped from 21 June, the prime minister has indicated. Boris Johnson told MPs on Wednesday the government intended to take the step when it moved to the final stage in its Covid reopening plans. “That is certainly our intention, provided we stay on track,” he told the Commons when asked about the proposal by the Tory MP Felicity Buchan. - Guardian

Driving could become the preserve of the rich as Britain and other countries around the world impose bans on diesel and petrol cars and embrace electrification, the boss of Vauxhall owner Stellantis has warned. A global rush to go electric could make cars too expensive for the middle classes, said Carlos Tavares, chief executive of the world's fifth-biggest car maker - and it may even fail to significantly reduce carbon emissions because the vehicles are so much heavier than petrol ones. - Telegraph

US close

Wall Street stocks finished in negative territory for yet another session on Wednesday, following the release of April's consumer price index.

The Dow Jones Industrial Average closed 681.5 points lower on Wednesday, extending losses recorded in the previous session despite big-name tech stocks staging a late reversal.

At the close, the Dow was down 1.99% at 33,587.66, as the S&P 500 lost 2.14% to 4,063.04, and the Nasdaq Composite was 2.67% weaker at 13,031.68.

In focus on Wednesday was April's consumer price index, which rose 4.2% year-on-year, according to the Labor Department, ahead of estimates for a print of 3.6% and the fastest pace of acceleration since September 2008.