Ocado flags positive second quarter revenue growth, royalties drive performance at Vectura

London open

The FTSE 100 is expected to open 14 points higher on Thursday, having closed down 0.6% on Wednesday at 6,762.67.

Stocks to watch

Online food delivery firm Ocado said it expects positive revenue growth in the second quarter after reporting a 40% rise in revenue for the 13 weeks to the end of February as more Britons had their groceries delivered during the current national lockdown. Revenue over the period, which included the Christmas holidays, came in at £599m, the company said on Thursday.

Vectura recorded a 6.9% increase in total revenue in 2020, it announced on Thursday, to £190.6m, driven by its development services business and a surge in royalty income. The FTSE 250 inhaled pharmaceuticals firm said its gross profit rose 6.4% for the year ended 21 December to £101.4m. It said it maintained strong liquidity, with closing cash and cash equivalents rising to £78.6m from £74.1m, following free cash flow generation of £24.1m and a share buyback of £16.4m during 2020.

Vodafone’s Vantage Towers business set the price for its initial public offering at €24 a share for a transaction that will value the mobile phone tower operator at €12.1bn. The offer price is at the bottom of a €24-€25 range tightened on Tuesday from an original range of €22.50 to €29. The company will place 95,833,334 shares resulting in gross proceeds to Vodafone of €2.3bn. The shares will start trading on the Frankfurt Stock Exchange on Thursday.

Newspaper round-up

The government plans to make it easier to claw back bonuses paid to executives of failed companies in what is being billed as the biggest shake-up of Britain’s corporate governance rules in decades, with ministers vowing to target negligent auditors and rogue directors. Part of a sweeping series of reforms designed to break the dominance of the big four accounting firms, the new measures were outlined by the business secretary Kwasi Kwarteng in a consultation launched on Thursday. - Guardian

Sovereign debt downgrades are in prospect for Britain, the US and scores of other countries around the world unless they urgently step up their efforts to reduce greenhouse gas emissions, according to a study. In the first attempt to adjust credit ratings to take account of the economic consequences of the climate emergency, a team of academics led by Cambridge University said failure to act would leave governments paying billions of dollars more to borrow. - Guardian

Eurostar has increased the pressure on the UK and French governments to strike a bailout deal after the boss of its biggest shareholder said it needed a cash injection within weeks to survive. The Channel Tunnel train operator has been left at risk of bankruptcy after passenger numbers plummeted by 95pc during the pandemic. Jean-Pierre Farandou, chief executive of French state rail company SNCF, told the Financial Times: “We are getting closer to the moment when Eurostar will have real cash flow problems … by next month, we have to conclude these discussions.” - Telegraph

The government could intervene in the crisis at Liberty Steel, Britain’s third-largest steelmaker, the business secretary has hinted. The collapse of Liberty’s main financial backer, Greensill Capital, has sparked fears for thousands of UK jobs. Asked whether the government could intervene, Kwasi Kwarteng told The Times: “We have done in the past. I think Liberty Steel is consonant with our decarbonisation agenda. I think it’s a fundamentally good product ... I can’t anticipate or guarantee forms of intervention." - The Times

The Bank of England and City regulators are among the financial institutions to miss targets to increase the representation of women in senior roles. When it launched its women in finance charter five years ago, the Treasury gave signatories until the end of 2020 to meet a target of 30 percent of senior roles to be filled by women. Organisations were allowed to set themselves more ambitious targets. - The Times

US close

Stocks on Wall Street closed in the green on Wednesday, after the Fed upped its economic forecasts following its two-day March meeting.

At the close, the Dow Jones Industrial Average was up 0.58% at 33,015.37, the S&P 500 added 0.29% to 3,974.12, and the Nasdaq Composite was 0.4% firmer at 13,525.20.

The Dow closed 189.42 points higher on Wednesday, rebounding from its retreat away from record highs on Tuesday.

Late in the session, the Federal Open Market Committee released its latest policy decision, standing pat on interest rates, with most members expecting near-zero rates to remain until at least the end of 2023.

It did hike its forecast for economic growth, however, to 6.5% for this year, compared to the 4.2% it predicted in December, on the back of the rollout of Covid-19 vaccines and government stimulus money.