Barratt builds bright results, Sports Direct expects earnings slump

London open

The FTSE 100 is expected to open 19 points higher on Wednesday, after closing 0.78% lower at 6,826.05 on Tuesday.

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Housebuilder and property developer Barratt Developments posted its annual results for the year to 30 June on Wednesday, with total completions rising 5.3% to 17,319. The FTSE 100 firm reported revenue of £4.24bn, up 12.7%, with profit from operations growing 15.9% to £668.4m. Its operating margin improved by 0.5 percentage points to 15.8%, with a profit before tax up 20.7% to £682.3m and basic earnings per share rising 21.1% over the prior year to 55.1p. “The strong operational and financial performance in FY16 reinforces the progress we have made over the last few years as does our disciplined volume growth,” said Barratt chief executive David Thomas.

Sports Direct said it expects earnings to fall 21% this year but added that, contrary to much media speculation, founder Mike Ashley was not planning to take the company private any time soon. The FTSE 250 retailer, which also said that it had urged chairman Keith Hellawell to continue in his role after he offered to step down over the weekend, said it expected earnings before interest, tax, depreciation and amortisation (EBITDA) would be around £300m with sales increasing at least 9%.

Industrial equipment rental company Ashtead Group’s revenue increased as it benefited from weak sterling in the first quarter, while it expect full year results to be ahead of expectations. For the first quarter ended 31 July, revenue increased by 14% to £707m, compared to the same period last year, due to growth in the Sunbelt and A-Plant businesses.

Newspaper round-up

Falling bond yields and interest rate cuts will give the chancellor a windfall of up to £18 billion to spend over the course of this parliament. The money will help to ease the pain of any slowdown on the public finances and will allow Philip Hammond to launch a stimulus programme in the autumn statement. - The Times

Mark Carney will be accused today of being too quick to cut interest rates after the Brexit vote as he faces further questions about his impartiality. Jacob Rees-Mogg, a Conservative MP and Brexiteer who clashed repeatedly with the Bank of England governor during the referendum campaign, will lead the attack when Mr Carney appears before the Treasury select committee today. - The Times

Ford has almost halved a planned investment in its UK engine plant at Bridgend, in a move that raised questions over its commitment to the Welsh factory. The US car giant said the decision had “nothing to do with Brexit” and was made to reflect shifting demands in the European car market. - Financial Times

US close

US stocks ended slightly higher on Tuesday as M&A news helped to boost the energy sector, while weak services data prompted investors to scale back rate hike expectations.

The Dow Jones Industrial Average and the S&P 500 both closed up 0.3% and the Nasdaq rose 0.5%. The US market was closed for trading on Monday for Labour Day.

Oil prices settled mixed even after Russia and Saudi Arabia made a vague promise in the previous session of greater cooperation to stabilise the market. West Texas Intermediate was up 0.9% at $44.83 a barrel while Brent crude was down 0.8% at $47.26.

“Oil has been in the spotlight again over the last 24 hours having rallied more than 5% at one point yesterday when a press conference was called for the Saudi Arabia and Russian oil ministers,” said Craig Erlam, senior market analyst at Oanda.

“The unexpected announcement sparked a sudden belief that a coordinated output freeze may be about to be announced but once again we were left listening to fluffy commitments to cooperation between the two oil producing giants.”