Drax Group earnings plummet, Vectura hits Ellipta royalty cap well ahead of forecasts
London open
The FTSE 100 is expected to open down 31 points on Thursday, after closing up 0.47% at 7,302.41 on Wednesday.
Stocks to watch
Electricity generation company Drax Group posted its preliminary results for the 2016 calendar year on Thursday, reporting a “good operational performance”, with 65% of electricity generated from renewable biomass during the year and progress made with its strategic initiatives. The FTSE 250 firm saw its EBITDA fall to £140m from £169m, with underlying earnings less than half what they were in 2015, at £21m against £46m. Underlying earnings per share stood at 5p, down from 11.3p, although net debt narrowed to £93m from £187m.
Vectura Group hit its royalty cap on sales of GlaxoSmithKline´s Ellipta range of products in 2016, one year ahead of forecasts. The cap was equivalent to £9.0m. The inhaled airways disease-focused business was also set to record £5.4m of 2016 revenues under a separate single digit percentage royalty agreement with GSK on its Ellipta products.
Eastern European budget airline Wizz Air is to open its first UK airport with base operations at London Luton Airport in June, creating over 30 direct jobs. The FTSE 250 company will open its 28th base on 18 June at Luton, which has operated Wizz Air flights for over a decade, in order to increase the number of routes serviced from the airport to 42.
Newspaper round-up
High street retailer Debenhams has been "named and shamed" as the worst offender in the Government's biggest ever list of companies that have paid their staff below the national minimum and living wage. The department store chain has been found to have failed to pay £134,894.83 to some 11,858 workers in a move that will heighten tensions around retailers and the rising costs of the living wage. – Telegraph
Amazon is close to launching its own fashion label in the UK as part of the online giant's efforts to corner the $3 trillion global fashion market. The foray into fashion has been highly anticipated by analysts ever since Amazon launched a photography studio in Shoreditch, east London, in order to lure shoppers away from online retailers Asos, Zalando and Yoox. – Telegraph
Tata Steel UK workers have voted in favour of proposals to turn around the struggling business, potentially saving 8,000 jobs but also leading to cuts to their pension benefits. Workers from the Community, Unite, and GMB unions all backed the plan in separate ballots. Approximately three-quarters of votes supported the proposals, which involve saving the Port Talbot steelworks in south Wales. – Guardian
Lingerie brand Agent Provocateur could be headed for administration after the appointment of restructuring firm AlixPartners to lead a sale process. Private equity firm 3i has been exploring options for the future of the company – founded by the son of designer Vivienne Westwood, Joe Corré, and his ex wife Serena Rees in 1994 – since late last year. – Guardian
Theresa May is facing her first big Brexit industrial crisis after workers’ leaders demanded the government save 3,500 British jobs in danger of being lost in PSA Peugeot Citroën’s proposed takeover of the European division of General Motors. Union leaders said that the prime minister must offer the French group incentives to keep the Ellesmere Port and Luton plants open, replicating the deal that she made with Nissan behind closed doors that prompted the Japanese car group to increase investment at its Sunderland works. – The Times
US close
US shares ended higher again on Wednesday as investors reacted positively to President Donald Trump's pledge to take an axe to business and personal taxes along with a set of positive economic data.
The S&P 500 made it seven gains in a row with the Down Jones notching a fifth successive positive session. The Nasdaq 100 also closed the day in the black.
Shares were boosted immediately after Trump's remarks on his “massive tax plan”, made in a meeting with retail executives.
“We’re going to provide tax relief for families, we’re going to simplify very greatly the tax code, it’s too complicated. We’re going to bring down the number of alternatives. It’s going to be a much much simpler tax code,” he said.
US airline shares soared as billionaire investor Warren Buffett's Berkshire Hathaway increased its investment in the sector.
American Airlines, Delta Air Lines, United Continental Holdings and Southwest Airlines were all gainers on the back of the news.