Serco wins £400m Canadian contract, Hargreaves Lansdown to beat profit forecasts

London open

The FTSE 100 is expected to open 17 points higher on Wednesday, having closed up 0.8% on Tuesday at 6,803.61.

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UK outsourcing contractor Serco has been awarded a £400m contract to continue providing support services at the 5 Wing Canadian Forces Base in Goose Bay, Canada. The company on Wednesday said it anticipated annual revenue of £20m-£30m in the opening years of the initial 10-year period. The contract has provision for two five-year extensions with a potential ceiling value to Serco over the full 20 years, including indexation, of around £870m.

Hargreaves Lansdown said annual profit would beat expectations after clients dealing in US stocks maintained strong dealing volumes. The investment platform said after strong trading in January it had continued to experience high volumes of share dealing. The period covered frenzied dealing in US shares such as GameStop by retail investors. As a result, pretax profit for the year to the end of June is expected to be “modestly above” the top of analyst forecasts, the FTSE 100 group said. Analysts’ predictions range from £334m to £360m.

Upper Crust owner SSP said it was looking to raise £475m via a rights issue as it prepared for the prolonged impact of the Covid-19 pandemic on the travel industry. The company said it expects a near full return of passenger numbers to pre Covid levels by financial year 2024 “led by a rebound in domestic and leisure short-haul air and rail travel”. No issue price was revealed, but the raising will proceed on a 12-for-25 basis.

Newspaper round-up

Britons are planning to use a hefty chunk of the savings built up over the past year to go on a £50bn spending spree once restrictions are lifted, a report has said. Research by the Isa provider Scottish Friendly and the consultancy, the Centre for Economics and Business Research (CEBR), found that households intend to take more holidays at home and abroad, travel, and go out to eat in cafes and restaurants. - Guardian

Ocado has given its eponymous food range a facelift, with 100 new products and less packaging, as part of a major rebrand that is ditching its trademark green for purple to stand out in an intensifying online grocery war. The retailer said a fifth of the 530 products in Ocado’s own-label range had changed ahead of Wednesday’s launch, highlighting new upmarket additions such as Chimichurri British flat-iron steak. - Guardian

Taxi app Uber has agreed to give its 70,000 British drivers holiday pay and pensions following a landmark ruling by the UK’s top court which threatened to prompt a deluge of cases against the US company. Uber said from tomorrow, all of its UK drivers would receive holiday pay on a fortnightly basis and would automatically be enrolled onto a pension plan, where the company would be contributing alongside drivers. - Telegraph

Music IP owner Hipgnosis has bowed to mounting pressure over transparency disclosures, and pledged to provide more information on how its song catalogue is performing following a flurry of swoops on hits by the FTSE 250 firm. Hipgnosis, which raises money from investors to buy the intellectual property rights to songs, currently owns rights to the back-catalogues of artists including Neil Young, Take That and Blondie. - Telegraph

The first big UK property fund to be gated more than a year ago because of wobbles in the commercial real estate market may stay shuttered for another three months. M&G Property Portfolio, a £2.06 billion fund with thousands of small investors, said it hoped to reopen before the end of June. It reported that it had sold another £97.7 million of assets since its last update, taking its current cash level to 25.3 percent of the fund. A total of £329 million of asset sales were under offer or had exchanged. - The Times

US close

Wall Street stocks closed mostly lower on Tuesday, with the Dow Jones and S&P 500 retreating from the fresh record highs reached in the previous session.

At the close, the Dow Jones Industrial Average was 0.39% lower at 32,825.95 and the S&P 500 was 0.16% weaker at 3,627.71, while the Nasdaq Composite saw out the session 0.09% higher at 13,471.57.

The Dow closed 127.51 points lower on Tuesday, cutting into gains recorded on Monday after the yield on the US 10-year Treasury note slid off recent highs and the Internal Revenue Service began processing $1,400 direct payments to Americans.

The Federal Reserve kicked off its two-day policy meeting on Tuesday, with market participants patiently awaiting comments on inflation and interest rates from chairman Jerome Powell tomorrow.

Also in focus, the benchmark 10-year Treasury yield, which sparked a rotation out of growth stocks as a result of its recent highs, was sitting at roughly 1.61% at the end of the session, down from last week's peaks and session highs of more than 1.62%.