Rolls Royce scraps dividend, WPP reinstates payout
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The FTSE 100 was expected to open 5 points higher at 6,050.
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Aircraft engine maker Rolls-Royce reported a large interim loss and scrapped its dividend as the coronavirus pandemic grounded airline fleets around the world. The company on Thursday said revenue fell 26% to £5.8bn as it posted a £1.7bn underlying operating loss, including £1.2bn in one-off charges in civil aerospace, largely related to COVID-19. Rolls-Royce also confirmed it was planning to raise £2bn by selling off assets, including its Spanish engine and turbine business ITP Aero.
WPP plunged to a £2.6bn first-half loss as revenue fell and the advertising company wrote down £2.7bn for the reduce value of its assets during the Covid-19 crisis. The company swung to a pre-tax loss of £2.58bn in the six months to the end of June from a £409m profit a year earlier as revenue dropped 12.3% to £5.58bn. WPP reinstated its dividend, which was 56% lower than a year earlier at 10p a share.
Flutter Entertainment posted a 22% jump in pro-forma first half revenues to reach £2,389m for a 35% surge in earnings before interest, taxes, depreciation and amortisation to £684m. Profits before tax however crashed by 70% to £24m on a reported basis and earnings per share were down 81% to 18.1p. On an adjusted basis, EPS did rise by 29% to 187.5p. The sports betting outfit reported "strong" growth outside the US. On the flip side, aligning the business with regulatory changes was expected to cost £65m over the year. Management was "encouraged" with trading for the second half to date but said that the outlook remained "highly uncertain" due to Covid-19 and possible regulatory changes. Leverage at year end was expected to come in towards 2.5-2.8 EBITDA.
In the Press
Demand for houses has soared since the lockdown ended, according to a report from Zoopla, with three- and four-bedroom houses with space to work from home particularly popular. Properties are selling far faster than before the pandemic struck, the report said, as buyers flooded back to the market. The amount of time a home is put up for sale before it finds a buyer has fallen to just 27 days since restrictions were eased, compared to 39 days over the same period in 2019. – Guardian
The traditional end-of-summer commuter crush appears unlikely to materialise next week as companies and staff shun the office and embrace remote working, prompting a warning from the UK’s leading business body about the future of firms that rely on passing trade. Hundreds of thousands of mostly white-collar workers are expected to continue working from home, in some cases permanently, despite the reopening of schools in England over the next fortnight. - Guardian
Wahaca, the Mexican restaurant chain set up by Masterchef winner Thomasina Miers, is set to shut more than a third of its sites in a bid to shore up cash. The group said 10 of its 28 restaurants will permanently close as rental costs in city centre locations made running them “untenable”. Wahaca said rents in some locations had risen by as up to 70pc over the past five years, with business rates increasing by 30 to 40pc. – Telegraph
US close
Wall Street stocks closed higher on Wednesday as investors looked ahead to this week's Federal Reserve symposium in Jackson Hole.
At the close, the Dow Jones Industrial Average was up 0.30% at 28,331.92, while the S&P 500 was 1.02% points higher at 3,478.73 and the Nasdaq Composite saw out the session 1.73% stronger at 11,665.06.
The Dow closed 84.48 points higher on Wednesday, reversing losses recorded in the previous session as signs of potential progress in trade talks between the US and China were offset by some weaker-than-expected consumer confidence data.