London pre-open: Stocks seen higher on late US rebound

Stocks in London are expected to open higher on Thursday following a late rebound in US trading, as investors look to a raft of data releases.

The FTSE 1000 is called to open 78 points higher than Wednesday’s close at 5,945.

The second release of fourth quarter UK GDP is at 0930 GMT. In the US, initial jobless claims and durable goods orders are at 1330 GMT, while FHFA home prices are at 1400 GMT.

“Later this morning we get the latest iteration of UK Q4 GDP and expectations are for growth of 0.5%, unchanged from the previous reading, and an annualised number of 1.9%, though we could see some evidence that business investment is starting to slow from the previous 2.2% to 0.6%, though the annualised measure is expected to increase to 6.4% from 5.8%,” said CMC Markets’ Michael Hewson.

British American Tobacco profit up but revenue down

Currency headwinds have eroded British American Tobacco’s full year revenue for 2015.

The FTSE 100 tobacco giant said on Thursday revenue had dropped from £13.9bn in 2014 to £13.1bn, a 6.2% drop, however it had risen 5.4% to £14.7bn at constant currency rates.

That has led the company to marginally increase its profit from operations from £4.54bn to £4.56bn at actual rates.

“Despite significant currency headwinds impacting reported results, the excellent underlying performance of the Group in 2015 and the increase in our total dividend for 2015 to 154.0p are testimony to the strength of the business, our strategy and our confidence in the future,” said chairman Richard Burrows.

BT Group may still be forced spin off its Openreach infrastructure arm, regulator Ofcom said, unless it effectively opens up the network to rivals and implements major reforms.

A review carried out by the telecoms regulator found that under the current model of BT ownership, Openreach lacks independence and "has an incentive to make decisions in the interests of BT".

So, it called for an overhaul of the division's governance to strengthen its independence from BT, making its own decisions on budget, investment and strategy, and be "required to serve all wholesale customers equally".

"Openreach management should be required to serve all wholesale customers equally, and consult them on its investment plans. There will also be greater transparency over how costs and assets are allocated between Openreach and the rest of BT," the regulator said.

Robustness was a key theme in the annual financials for Lloyds Banking Group on Thursday, with the company reporting rises in income and underlying earnings for the 2015 calendar year.

The FTSE 100 bank saw underlying profit increase 5% to £8.1bn during the year, with an underlying return on equity of 15% - up from 13.6%. Excluding TSB, which Lloyds sold to Spanish bank Sabadell in July, underlying profit grew 10%.

Total income was up by 1% to £17.6bn. Of that, net interest income grew 5% to £11.5bn, which the bank said was driven by further margin improvement to 2.63%. Other income was 5% lower largely due to disposals and run-off.

Lloyds made a statutory profit before tax of £1.6bn, down from 2014's £1.8bn, due to increased PPI charges.

The bank's board recommended a final ordinary dividend of 1.5p per share, making for a total ordinary dividend of 2.25p for the year. It also recommended a capital distribution in the form of a special dividend of 0.5p per share.