Bunzl stockpiling to mitigate effects of hard Brexit, Provident rejects £1.3bn offer from Non-Standard Finance

London open

The FTSE 100 is expected to open 12 points higher on Monday, having closed up 0.16% at 7,178.60 on Thursday.

Stocks to watch

Distribution group Bunzl said it was stockpiling to mitigate against border delays if the UK crashed out of the European Union without a deal as it reported a rise in full year pre-tax profits. The company said profits at constant exchange rates rose 6% to £559m on the back of a 9% increase in revenue to £9bn. In a separate announcement, Bunzl said it was buying Liberty Glove & Safety, a supplier of safety products to distributors based in the US. The business supplies a full range of personal protection equipment with a focus on gloves. Revenue in 2018 was £70m.

Like-for-like sales at the Primark retail arm of Associated British Foods have fallen 2% in the first half of the year but full year guidance remained unchanged. At the top line, Primark grew sales 4% due to expansion of selling space, while the grocery, agriculture and ingredients divisions all reported improved revenues, while sugar sales have been strongly diluted by the new EU price regime.

Doorstep lender Provident Financial has rejected a £1.3bn offer from smaller rival Non-Standard Finance, calling it “highly opportunistic”. On Friday, Non-Standard Finance offered 8.88 new NSF shares for each Provident Financial share. Based on NSF’s closing share price of 58p a share the day before, this valued each Provident share at 511p. But Provident expressed its disappointment at the unsolicited bid on Monday, highlighting the fact that NSF had decided not to engage with the board prior to the announcement. “The board considers that this hostile offer represents an irresponsible approach in the context of a financially regulated business which is recovering from a period of substantial instability. The board believes that this offer could have a negative and destabilising impact on its stakeholders, including its customers, for a considerable period of time.”

AstraZeneca announced on Monday that ‘Brilinta’ had met its primary endpoint in the Phase III THEMIS trial, and demonstrated that the product - ‘ticagrelor’, taken in conjunction with aspirin - showed a statistically-significant reduction in a composite of major adverse cardiovascular events (MACE) compared to aspirin alone. The FTSE 100 pharmaceuticals giant said THEMIS was conducted in more than 19,000 patients with coronary artery disease and type-2 diabetes, with no prior heart attack or stroke. Preliminary safety results were consistent with the known profile of Brilinta.

Newspaper round-up

Gambling companies are planning to set up a new trade body to lobby politicians as the prospect of tougher regulation of the industry grows. Job adverts posted by the recruitment firm Ellwood Atfield appear to confirm rumours of a merger between the Remote Gambling Association, which represents online betting firms, and the Association of British Bookmakers, which came in for heavy criticism during the battle over fixed-odds betting terminals. – Guardian

The billionaire investor Warren Buffett has used his widely-read annual letter to shareholders to take a swipe at Donald Trump, saying no one person should claim credit when the US economy goes well. Buffett, who supported Hillary Clinton in 2016, wrote that “it is beyond arrogance for American businesses or individuals to boast that they have ‘done it alone’.” – Guardian

Investors have placed their biggest bets against Thomas Cook in a year as fears grow that the sale of its airline could be blown off course by a turbulent aviation market. The travel agent was plunged into crisis last year after a string of profit warnings led to a call for support from its banks to allay concerns of a cash crunch. Thomas Cook then put its airline on the market earlier this month to provide “greater financial flexibility and increased resources”. – Telegraph

Bosses at Britain’s largest private construction business enjoyed a sharp rise in payouts last year despite ongoing losses and a bumpy refinancing that forced it to file its accounts months after the legal deadline. Five directors at Laing O’Rourke, which has worked on major projects such as Crossrail and Heathrow Terminal 5, were paid £3.4m in salaries and short-term incentives in the year to March 2018, compared with just £1.6m in the previous 12 months. – Telegraph

Businesses have lost faith in the political process, the Institute of Directors warned as research revealed that confidence in the service sector is sinking at its fastest pace since the financial crisis. Responding to the government’s decision to delay a meaningful vote on the Brexit deal until as late as March 12, the institute said that further postponement would only “drag out uncertainty” and risk an accidental no-deal. – The Times

The gender pay gap at the Bank of England has worsened in the past year despite a pledge by Mark Carney, its governor, to increase the number of women in its most senior roles. Women working at the Bank are paid an average of 24.6 percent less than male employees. That figure, which is the median gender pay gap, rose from 24.2 per cent a year earlier, according to the government equalities office. The difference in bonuses rose by 0.7 percentage points to 26.4 per cent. – The Times

US close

US stocks closed higher on Friday as investors eyed more news from trade talks between the US and China ahead of next week’s truce deadline.

At the close, the Dow Jones Industrial Average was 0.70% higher at 26,031.81, while the S&P 500 was up 0.64% at 2,792.67 and the Nasdaq Composite moved 0.91% firmer to 7,527.54.

The Dow closed 181 points higher as Chinese Vice Premier Liu He met Donald Trump at the White House and managed to carve out a deal on currency in their ongoing trade war.

Trump said he now expects to meet with Chinese President Xi Jinping "soon" in order to work out the finer points of the deal.

"Probably in Mar-a-Lago, probably fairly soon," said the President.

Craig Erlam, senior market analyst at Oanda, said: "It would appear that there’s been some real progress made in the talks, at least enough to extend the truce and avoid further tariff hikes. This is a major risk for markets and is helping to feed into the improved risk appetite we’ve seen this year.”