Bovis builds better profits, William Hill rejects Rank

London open

The FTSE 100 is expected to open 6.2 points higher on Monday, after closing up 0.02% at 6,916.02 on Friday.

Stocks to watch

Bovis Homes posted its results for the six months to 30 June on Monday, with an 18% jump in revenue to £412.8m, from £350.7m a year ago. The FTSE 250 firm’s housing gross profit jumped 19% to £100.3m, while its operating profit grew 18% to £63.9m. Operating profit margins remained stable at 15.5%. Bovis reported profit before tax of £61.7m - up 15% - while basic earnings per share grew 14% to 36.5p. “We have delivered a record number of homes in the first half of 2016 which has driven strong profit growth, improved returns and a 9% increase in the interim dividend,” said Bovis Homes chief executive David Ritchie. “Our forward sales position means we are well placed to continue this strong performance through the remainder of the year.”

William Hill rejected an improved cash-and-shares offer from Rank Group and 888 Holdings received over the weekend and continued to refuse to enter talks. Casino operator Rank and online gaming specialist 888 launched the improved offer on Sunday that valued the UK's biggest bookmaker at 352p per share.

Genus has lost a US legal dispute and been ordered to pay its opponents $1.5m upfront in damages plus an ongoing royalty for the patent its Genus Sexed Semen (GSS) processing technology was said to have infringed. Genus has now sought an injunction from the court to allow its ABS subsidiary to terminate the 2012 semen sorting agreement on ninety days notice and to provide relief from the restrictive provisions under that agreement.

Newspaper round-up

One of Britain’s leading captains of industry is to warn the new Brexit minister that he may be forced to relocate his £4 billion UK-based manufacturing group to the Continent if the government does not keep the country within the European single market. In one of the first explicit examples of what Brexit means for British manufacturers, DS Smith, the provider of specialist packaging for Amazon and fast-moving consumer goods groups such as Unilever, Nestlé, Procter & Gamble and the Cadbury group Mondelez, has already diverted tens of millions of pounds of investment out of the UK to a new plant near Frankfurt. - The Times

Thousands of gas consumers have been overcharged because energy suppliers have made basic mistakes reading their meters, industry executives have said. Companies have been confusing old imperial gas meters, which measure usage in cubic feet, with newer metric ones, which measure it in cubic meters. - Financial Times

Retail vacancy rates have risen above 10% for the first time since April 2015, according to a quarterly research report published on Monday by the British Retail Consortium and research group Springboard. The rise to 10.1%, from 9.6% in April 2016, is being partly blamed on start-up retail businesses taking short term leases, but then failing to convert them into longer agreements. - The Guardian

ITV’s £1bn bid for Peppa Pig-maker Entertainment One (eOne) and a potential counter approach by the private equity giant KKR face challenges over the company’s use of tax credits, according to City sources. Investment bankers said eOne, which is domiciled in Canada and listed in London, relies on tax incentives designed to boost the Canadian film and television industries. - Telegraph

The Financial Ombudsman faces the threat of a judicial review over its handling of complaints for payment protection insurance on credit cards after claims that it has refused compensation to thousands of victims of unfair sales. A claims management company is preparing a High Court action that it believes could result in about £85 million of redress for 50,000 people who have been rejected by the ombudsman. The total bill for future claims and for those who have failed to win compensation directly from companies could run to about £1 billion. - The Times

US close

US stocks finished on a mixed note on Friday – amid the lowest trading volumes in four months - as key retail sales figures for July came in unexpectedly flat, triggering a sharp drop in 10-year Treasury yields.

The Dow Jones Industrial Average fell 0.20% to 18,576.47 points, the S&P 500 dropped 0.08% to 2,184.05 points and the Nasdaq edged higher by 0.09% to 5,232.89 points.

As the earnings season neared its end, Bloomberg reported that 78% of S&P 500 firms had beat profit forecasts and 56% estimates for sales, with analysts now estimating that earnings dropped 2.5% in the second quarter.

To take note of, estimates for the third quarter were now pointing to a 0.8% drop in S&P 500 profits, versus projections for a rise of 1.8% when the earnings season kicked off four week before.

Wall Street´s benchmark S&P 500 finished the week with a gain of less than 0.1%.

Retail sales in the US were unchanged from the previous month, down from a 0.6% increase in June and missing expectations for a 0.4% gain, the Commerce Department revealed.

Core retail sales – which exclude auto sales – declined 0.3% following a 0.7% increase in June, marking the worst reading since January and falling short of expectations for a 0.2% advance.

Friday's news on the economic front saw yields on benchmark 10-year US Treasuries drop by five basis points to 1.512% and odds of a Fed rate increase in December fall back to 40.6%, versus 44.9% in the previous session.