Burberry sales fall in Q1, Barratt profits up 20pc

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The FTSE 100 index is predicted to fall 26 points on Wednesday morning, according to pre-market trading.

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Declines across all three of Burberry's regions led to a 3% like-for-like drop in retail sales in the first quarter, the luxury retailer said, warning that its market remain challenging and that its wholesale outlook has become more cautious for both the first and second halves. Burberry said it still expected low single-digit percentage growth in total retail revenue for the full year, but said it expects first-half wholesale revenue to be down by over 10%. Directors also calculated that there would be a £90m benefit from currency rates if they remain at current levels.

House builder Barratt said full year profit before tax was to increase by around 20% to £680m, in line with market expectations. Total completions, including joint ventures, increased by 5.3% to 17,319, as a result of strong consumer demand during the financial year, while directors added that it was too early to say what the impact of the uncertainty facing the UK economy will be post the Brexit vote.

Pharmaceutical giant AstraZeneca announced on Wednesday that it has entered into an agreement with Sandoz and its affiliates to resolve litigation relating to Faslodex (fulvestrant). The FTSE 100 firm said the litigation related to Sandoz’s generic fulvestrant product, for which it is seeking FDA approval.

Newspaper round-up

Mark Carney may have bounced the Bank of England into an unnecessary interest rate cut by calling for stimulus only days after the Brexit result, leading economists have warned in a fierce attack on the governor. Former Bank policymakers and other senior economists said that Mr Carney’s personal assertion on June 30 that “policy easing will likely be required over the summer” had put his colleagues on the monetary policy committee in an impossible position, given the uncertainty since the referendum. - The Times

Steinhoff, the acquisitive South African retailer, is poised to announce a £450m agreement to buy full control of Poundland, the struggling UK discount chain, in what would be its first successful takeover of a European company this year. Poundland is expected to reveal on Wednesday that it has a recommended a Steinhoff offer of 220p a share for the remaining 76 per cent of stock it does not already own, according to people close to the talks. - Financial Times

Rolls-Royce could boost its profitability by £1bn if tough targets, in addition to cost cuts already identified by the company, can be hit, according to chief executive Warren East. Speaking at a briefing at Farnborough Airshow, Mr East he was “pleased” with the progress being made on his transformation plan for the engineering company. He said it was on track to take between £150m and £200m of costs out of the business by 2017. - Telegraph

US close

US stocks ended in the black on Tuesday as oil prices advanced and investors welcomed signs of further central bank stimulus, following better-than-expected earnings from industrial bellwether Alcoa.

The Dow Jones Industrial Average and the S&P 500 closed at fresh records, up 0.7%, while the Nasdaq also ended the session 0.7% firmer.

Surging oil prices lent support, with West Texas Intermediate up 4.5% to $46.77 per barrel and Brent crude up 4.5% to $48.35.