Operating profits flat at Legal & General, Tritax Big Box earnings per share rise

London open

The FTSE 100 is expected to open 44 points lower on Wednesday, having closed up 0.17% on Tuesday at 6,730.34.

Stocks to watch

Legal & General reported flat annual operating profits as it set aside an extra £110m in Covid-19 insurance claims due to the emergence of new virus strains. Operating profit fell slightly to £2.21bn from £2.28bn with three of its five divisions delivering growth. Pre-tax profit fell to £1.78bn from £2.11bn. The company’s solvency ratio came in at 177% compared with 184% a year earlier. L&G estimated a ratio of 192% as at March 5.

Just Eat Takeaway said it would keep up its investment drive as the food delivery company reported surging sales and a wider annual loss. The FTSE 100 group reported a €151m (£129m) net loss for the year to the end of December compared with a €115m loss a year earlier as revenue rose 54% to €2.4bn. Adjusted earnings before interest, tax, depreciation and amortisation rose 18% to €256m. Just Eat said it would prioritise market share over earnings in 2021 and that it expected order growth to accelerate.

Record demand for logistics space saw earnings per share at Tritax Big Box improve by 8% to 7.17p in 2020, it announced on Wednesday. The FTSE 250 real estate investment trust said that was driven by development completions, active asset management and development management income, net of disposals. Its board declared a fourth quarter dividend of 1.7125p, resulting in total 2020 dividends of 6.40p per share, representing a pay-out ratio of 90% but slipping from 6.85p in 2019.

Newspaper round-up

Air passenger duty is set to be cut on domestic flights after the prime minister signalled his support for reform to bolster air links around the UK. Lower rates for UK internal flights or an exemption for return legs will be considered. The news will come as some relief to the beleaguered aviation industry, whose complaints about the level of duty predate the Covid-19 crisis, but environmental groups said the move was “nonsensical” and “beggared belief” in the face of climate change. - Guardian

More than 300 jobs are expected to go at Evans Cycles, and hundreds of remaining store staff are to be switched to zero-hours contracts, as Mike Ashley’s Frasers Group aims to slash costs. The 55-store bicycle retailer, which Frasers bought out of administration in 2018 when it had 62 outlets, has told staff it intends to cut up to half of the workforce in many stores despite booming trade for bike retailers during the pandemic. - Guardian

Twenty-five councils are at risk of going bust after Covid-19 blew a catastrophic £10bn hole in local authority finances, the Government’s spending watchdog has warned. The National Audit Office said that a string of the UK’s 337 councils are at “high” or “acute” risk of financial failure as they struggle to meet the legal requirement to balance their budgets. It did not name the 25 most exposed. - Telegraph

Marks & Spencer has become the latest retailer to reveal plans to turn some retail space into offices. The retailer is seeking to convert the upper levels of its Marble Arch store on Oxford Street as part of a wider redevelopment of the site and then lease it to City tenants. Marble Arch, which opened in 1930, is M&S’s biggest store with 160,000 square feet of trading space. - Telegraph

Administrators of London Capital & Finance are poised to run up fees of almost £8 million by next January, prompting a furious response from investors who lost savings in the £238 million scandal. Insolvency practitioners from Smith & Williamson, the accountancy and restructuring firm, said that fees of £5.6 million had been incurred since the administration began in 2019. - The Times

US close

Wall Street stocks closed firmly in the green on Tuesday following a mixed session for major indices a day earlier.

At the close, the Dow Jones Industrial Average was up 0.10% at 31,832.74, while the S&P 500 was 1.42% firmer at 3,875.44 and the Nasdaq Composite saw out the session 3.69% stronger at 13,073.82.

The Dow Jones closed 20.20 points higher on Tuesday, extending gains recorded in the prior session, while the tech-heavy Nasdaq surged more than 460 points.

Tech stocks bounced back from heavy losses recorded over the last few sessions on Tuesday as the yield on the 10-year Treasury note fell to 1.59% after trading as high as 1.62% on Monday.

News that the US Senate had passed a $1.9trn economic relief and stimulus package, set to include another round of stimulus checks to everyday Americans, also continued to give a boost to stocks reliant on an economic reopening - with banks, airlines, cruise lines and retailers all benefitting from expectations that President Joe Biden will sign the bill into law by 14 March.