Rolls-Royce swings to profit, Mondi sales volumes rise

Stocks to watch

Aircraft engine maker Rolls-Royce swung to an interim profit as it continued to cut costs and looked to turn cash-flow positive during the second half of the year. The company on Thursday reported pre-tax profits of £114m compared with a £5.2bn loss last year when the Covid-19 pandemic virtually grounded air passenger travel. Underlying operating profit came in at £307m from a £1.6bn loss in 2020.

Mondi reported higher sales volumes and higher average selling prices in its first half on Thursday, with underlying EBITDA coming in at €709m (£604.38m), down from €738m year-on-year, with a margin of 19.5%. The FTSE 100 paper and packaging company said cash generated from operations was €552m in the six months ended 30 June, down from €602m, while its balance sheet stood at 1.5x net debt-to-underlying EBITDA. It declared an interim dividend of 20.0 euro cents per share.

Newspaper round-up

Uber is regaining much of the momentum it lost during the pandemic, announcing on Wednesday that its ride-hailing services saw a 105% increase and that revenue had more than doubled from this time last year. Revenue for the company’s most recent financial quarter totaled $3.93bn, beating analysts’ expectations and signaling an emergence from the dismal conditions at the same point last year when the pandemic was keeping most people at home. - Guardian

Boris Johnson and Rishi Sunak will urge UK pension schemes to back Britain’s “entrepreneurial spirit” with billions of pounds of savers’ funds to fuel the economy’s post-pandemic recovery in a message to investment bosses. The prime minister and chancellor will issue a joint call to action on Thursday aimed at “igniting an investment big bang” that would “unlock the hundreds of billions of pounds sitting in UK institutions”. - Guardian

The London Stock Exchange is fast-tracking rule changes that would allow high-growth companies such as the Hut Group to enter the FTSE 100 as the UK seeks to attract a rush of tech floats. FTSE Russell, a subsidiary of the London Stock Exchange Group that owns the FTSE 100, FTSE 250, and other main indices, is consulting on changes to stock market rules that would allow companies to join the blue chip series even when insiders retain substantial control of a company. - Telegraph

Sadiq Khan is being forced on to a collision course with Tube drivers over plans to overhaul Transport for London’s “expensive, unreformed and generous” pension scheme. Workers are threatening industrial action if the London mayor cuts payouts or closes the £11bn retirement fund. - Telegraph

Pret A Manger, Sheffield United FC and John Lewis are among 191 employers fined and publicly criticised for an “unacceptable” breach of unemployment law in which tens of thousands of workers were paid less than the minimum wage. The breach by Pret, the coffee and takeaway meals chain, related to childcare vouchers, it said, had “inadvertently caused remuneration to fall below minimum levels”. - The Times

US close

Major indices turned in a mixed performance on Wednesday as traders thumbed over earnings from General Motors and some key jobs data from ADP.

At the close, the Dow Jones Industrial Average was down 0.92% at 34,792.67, while the S&P 500 was 0.46% weaker at 4,402.66 and the Nasdaq Composite saw out the session 0.13% higher at 14,780.53.

The Dow closed 323.73 points lower on Wednesday, while the S&P 500 fell from the fresh record close recorded in the previous session.

Throughout the session, market participants digested comments from Treasury Secretary Janet Yellen, who said that enacting Joe Biden's trillion-dollar bipartisan infrastructure bill was key to maintaining America's status as the "world's pre-eminent economic power".

The yield on the benchmark 10-year Treasury note was drawing an amount of attention as well, trading broadly flat at around 1.163% after having dipped below 1.13% earlier in the session.