SSP swings to full-year profit, Phoenix Group cash generation on track

London open

The FTSE 100 is expected to open 15 points lower on Tuesday, having closed down 0.15% on Monday at 7,567.54.

Stocks to watch

Travel food outlet operator SSP Group swung to a full year profit as passenger numbers rebounded from the Covid pandemic and said the new financial year has started well with sales strengthening further to an average of 104% of 2019 levels in the first eight weeks. The company reported a pre-tax profit of £25.2m compared with a £411.2m loss.

Phoenix Group said in an update on Tuesday that it was expecting to deliver around £1.2bn of incremental new business long-term cash generation in 2022, through organic growth. The FTSE 100 insurer said it also remained on track to deliver full-year cash generation at the top end of its target range, of between £1.3bn and £1.4bn. It also set its first incremental new business long-term cash generation target of £1.5bn by 2025, which would be a 25% increase on its “strong performance” in 2022.

Newspaper round-up

Hopes of a deal to avert severe Christmas rail disruption were dashed on Monday night when the RMT union announced additional strike dates and rebuffed a pay offer from Network Rail just before the industry’s deadline. The union said it would put the offer to members in an electronic referendum this week but recommend that they reject it. It affirmed that two 48-hour strikes that will stop much of the railway next week would go ahead either way. – Guardian

Rishi Sunak is to drop compulsory housebuilding targets to see off an embarrassing backbench rebellion, prompting criticism he is putting party unity over the national interest. The capitulation, which comes in the middle of a national housing crisis, will spark fresh concerns that the prime minister is too weak to take on unruly Conservative backbenchers. It followed up to 100 Tory MPs threatening to back an amendment that would in effect force the government to abolish the target of building 300,000 homes a year in England. – Guardian

Vodafone is under pressure from a billionaire French shareholder to accelerate cost-cutting and asset sales after the ousting of its chief executive. The FTSE 100 telecoms giant announced Nick Read’s exit following a nearly 50pc slump in its share price since he took charge four years ago. – Telegraph

The value of London office blocks is forecast to fall sharply over the next few years, with rents predicted to almost halve as rising unemployment and working from home depress demand, according to Citi, the investment bank. Aaron Guy, a real estate analyst at Citi, expects the values of office blocks in the capital to fall by 38 per cent in the next two to three years “driven primarily by likely recessionary impacts on higher unemployment and continued work-from-home office shrinkage”. – The Times

A bank criticised by a former minister for its allegedly poor due diligence work on a pandemic finance scheme has admitted to MPs that more than one in three of the state-backed loans it issued was “not performing”. Anne Boden, chief executive of Starling, the digital bank, told the public accounts committee that 34.3 percent of the bounceback loans it provided were in “distressed” status — significantly higher than the average rate. – The Times

US close

Wall Street stocks ended the session lower on Monday as market participants digested last month's non-manufacturing purchasing managers index from the Institute for Supply Management and headlines from China.

At the close, the Dow Jones Industrial Average was down 1.40% at 33,947.10, while the S&P 500 lost 1.79% to 3,998.84 and the Nasdaq Composite saw out the session 1.93% weaker at 11,239.94.

The Dow closed 482.78 points lower on Monday, more than reversing modest gains recorded in the previous session despite a better-than-expected non-farm payrolls report.

Stocks traded lower on Monday, ignoring cues from Asian markets overnight, where shares rallied after China began to ease certain Covid-19 testing rules in a number of cities and hinted that even more relaxations may follow.

IG's Chris Beauchamp said: "Stock markets are distinctly underwhelmed by China’s all-too tentative moves towards reopening its economy, and instead have gone back to worrying about the Fed. Friday's jobs report continues to loom over markets, causing further losses as some dovish bets are pared back. While the pre-meeting blackout means we might be spared any Fed comments, it seems stocks will continue to trade in a negative fashion, at least until the meeting itself."