Tesco sells Poland business, National Grid to take £400m Covid hit

London open

The FTSE 100 is expected to open 35 points lower on Thursday, having closed up 0.17% at 6,253.25 on Wednesday.

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Tesco on Thursday said it had sold its Polish business to Denmark’s Salling Group for £181m. The transaction, which is subject to antitrust approval, includes the sale of 301 stores together with the associated distribution centres and head office, the company said in a statement. "We have seen significant progress in our business in Central Europe, but continue to see market challenges in Poland. Today's announcement allows us to focus in the region on our business in Czech Republic, Hungary and Slovakia, where we have stronger market positions with good growth prospects and achieve margins, cash flows and returns which are accretive to the group,” said chief executive Dave Lewis.

National Grid said the Covid-19 crisis would reduce profit by £400m in the current year as it reported a 1% increase in annual profit. Underlying operating profit for the year to the end of March rose to £3.45bn from £3.43bn a year earlier as revenue fell to £14.54bn from £14.93bn. Pretax profit fell 5% to £1.75bn. The FTSE 100 company declared a final dividend of 32p a share taking the annual payout to 48.57p a share - up 2.6% and in line with the company's policy. National Grid set aside an extra £117m for US bad debts in response to the Covid-19 crisis in the year to the end of March and predicted a higher charge this year. In total Covid-19 will have a £400m impact in the current year but most of the shortfall will be recovered, it said.

Taylor Wimpey said its share placing had raised £515m to take advantage of coronavirus lockdown-related disruption to the market for development land. The placing, announced on Wednesday night, was completed at 145p a share. The housebuilder said competition for land had eased because smaller and medium-sized builders are constrained by “weaker balance sheets and reduced cash flows”.

Newspaper round-up

The delivery firm DPD and the B&Q owner Kingfisher are hiring a total of more than 7,500 staff in the UK to cope with surging demand for home deliveries during the coronavirus pandemic. DPD is to hire 6,000 workers, including HGV drivers, warehouse staff, managers and support staff such as mechanics as part of a £200m investment in expanding its next-day parcel-delivery service. – Guardian

Rishi Sunak is being forced to consider ways of getting round the “triple lock” on pensions next year amid signs that the bounce back in wages for furloughed workers could put state pensioners in line for an 18% increase. While the Treasury said it had no plans to ditch the arrangement – by which pensions rise by the rate of inflation, average earnings or 2.5%, whichever is greater – the chancellor has accepted a problem is looming in 2021 as the economy recovers from the coronavirus lockdown. – Guardian

Ministers are closing in on plans to end rent disputes between warring landlords and cash-starved businesses, with new guidance expected this week. A code of conduct drawn up by the Government with property owners and business groups should be revealed in good time ahead of the quarterly rent payment day next Wednesday, sources close to the discussions said. However, industry doubts remain over the likely effectiveness of the plan. – Telegraph

The administrator of Neil Woodford’s failed investment fund has been accused of delivering “a slap in the face” to investors with its recent £224 million deal to sell a host of the fallen stock-picker’s biotechnology stakes. Acacia Research Corporation has started to sell on some of the assets that it agreed to buy a fortnight ago from Mr Woodford’s Equity Income Fund and at least one stake has been offloaded for a significant profit. – The Times

Ministers and regulators have paved the way for the creation of gigantic new consolidation vehicles that could take over traditional pension funds and prise open a market at present enjoyed by insurers alone. The Pensions Regulator has set out a new interim regime that would allow “superfunds” to transact their first deals before formal legislation is enacted. – The Times

US close

Wall Street stocks finished mostly lower on Wednesday, with the Dow managing to snap a three-day winning streak by the closing bell.

The Dow Jones Industrial Average ended its session down 0.65% at 26,119.61 and the S&P 500 lost 0.36% to 3,113.49, while the Nasdaq Composite managed gains of 0.15% to settle at 9,910.53.

It was a negative session throughout for the Dow, which had opened 75.66 points lower, reversing some of Tuesday’s gains after stronger-than-expected retail figures and news of more monetary and fiscal policy support from the Federal Reserve and the White House boosted sentiment.

Market participants were continuing to watch the situation in the US with some concern on Wednesday, especially after the National Institute of Allergy and Infectious Diseases' Anthony Fauci warned of a need to move quickly in order to avoid a second surge in cases in various states.

While testimony from Fed chair Jerome Powell provided some support during the previous session, he also stated that he remained cautious on the outlook for the US economy.

Investors were also seemingly optimistic that the White House will be able to pull together a $1trn infrastructure package.