Revenue rises at Bunzl, profits surge at ABF
London open
The FTSE 100 is expected to open 23 points lower on Wednesday, after closing down 2.46% at 7,147.50 on Tuesday.
Stocks to watch
Outsourcing company Bunzl reported a rise in first quarter revenue following new business wins and acquisitions. Revenue increased 18% at actual exchange rates and rose 4% at constant exchange rates, compared to the same period last year, due to a 2% improvement in underlying growth and a 3% impact from acquisitions, which also partly offset the effect of fewer trading days in the quarter.
Profits surged at Associated British Foods in the first half of the year as the sugar business benefited from higher prices and Primark opened 16 new clothes stores around the world. On revenue up 7% to £7.3bn in the 24 weeks to 4 March, underlying profit before tax increased 35% to £652m - with statutory PBT mushrooming 92% thanks to the sale of its US herbs and spices and south China cane sugar operations for a profit of £255m.
Pest control and hygiene group Rentokil Initial posted its first quarter trading update on Wednesday, with ongoing revenue up 23.8% - or 10% at constant exchange rates - to £579m. The FTSE 100 firm’s total revenue was up 22.9%, or 9.2% at constant currencies, to £580m.
Newspaper round-up
Philip Hammond has signalled that the government is facing a multibillion-pound loss from selling off its 73% stake in Royal Bank of Scotland. The chancellor told MPs that that “we have to live in the real world”, as he indicated that the remaining shares could be sold below the 502p average price that was paid for them during 2008 and 2009 when £45bn of taxpayers’ money was pumped into the Edinburgh-based bank. – Guardian
The City regulator has pledged to ensure that financial firms remain strong in the face of Brexit in its annual list of priorities, which also includes protecting vulnerable customers from overly expensive loans. Andrew Bailey, chief executive of the Financial Conduct Authority, said the regulator’s lawyers were scrutinising EU financial sector rules as part of the government’s “great repeal bill”, which will transfer thousands of EU regulations into UK legislation after Brexit. - Guardian
The boss of German energy giant RWE has fuelled expectations that the company will target the UK energy market for future acquisitions. Rolf Martin Schmitz disclosed that the group is interested in owning power plants in countries where capacity margins are thin and the Government is willing to award contracts to secure power supplies. – Telegraph
City grandees and currency investors alike backed Theresa May’s decision to call an early election in the hope she will win more authority to negotiate a smooth exit from the European Union. Although the surprise in Westminster at the Prime Minister’s previous refusal to go to the polls early was echoed in the Square Mile, news of a general election on June 8 was broadly seen as an opportunity to achieve greater certainty in talks with Brussels. – Telegraph
Lord Wolfson of Aspley Guise has had his total remuneration slashed from £4.2 million to £1.8 million after a tough year in which Next’s full-year profits fell for the first time since the recession. The Next chief executive’s pay dropped heavily as he did not receive a bonus — £530,000 the year before — after failing to hit targets. It is the first time in 18 years that he has missed his annual bonus. – The Times
US close
Equities closed lower stateside, after a day in which Goldman Sachs surprised Wall Street by missing its forecasts.
The S&P 500 was down 0.29% at 2,342.19, while the Dow Jones Industrial Average fell 0.55% to 20,523.28, and the Nasdaq 100 was off 0.14% at 5,391.66.