Organic growth drives revenue at Bunzl, Whitbread sales up as shareholders approve Costa sale
London open
The FTSE 100 is expected to open 58 points lower on Tuesday, having closed down 0.1% at 7,042.80 on Monday.
Stocks to watch
AstraZeneca and its global biologics research and development arm MedImmune announced a new multi-term agreement with Innate Pharma on Tuesday, building on an existing collaboration, and aimed at accelerating each company's oncology portfolio and bringing new medicines to patients more quickly. The FTSE 100 pharmaceuticals giant said the extended collaboration would enrich its immuno-oncology portfolio with pre-clinical and clinical potential new medicines. AstraZeneca said it would obtain full oncology rights to the “first-in-class” humanised anti-NKG2A antibody, ‘monalizumab’, as well as option rights to IPH5201, an antibody targeting CD39, and four preclinical molecules from Innate's pipeline.
International distribution and services group Bunzl said third quarter revenue ncreased by 7% at constant exchange rates due to organic growth of approximately 4% and an impact from acquisitions, net of disposals, of approximately 3%. It added that it was buying Volk do Brasil, a distributor of personal protection equipment based in Parana, Brazil, for an undisclosed sum.
Whitbread grew sales 2.6% and underlying pre-tax profits 2.6% in the first half of its financial year as weaker consumer demand hit UK growth of its Premier Inn hotel chain. The £3.9bn sale of its Costa Coffee arm was approved by shareholders earlier this month but directors said the "exact amount, timing and method" of the cash return to investors was yet to be determined.
Newspaper round-up
Netflix has announced plans to raise a further $2bn (£1.5bn) in debt, adding to mounting long-term liabilities which now total more than $30bn. The US streaming service said the money raised will be used for a range of “general corporate purposes”, from buying new programmes and films to acquisitions. – Guardian
Ditching the government’s budget plans and adopting Labour’s tax and spending proposals would allow Philip Hammond to ditch austerity and pencil in an extra £100bn of spending by the middle of the next decade, according to a left wing think tank. In a report to be published later this week, the Fabian Society said there was no clear case for the chancellor to stick to his plan of running a surplus and that the emphasis should be on investment that would improve the economy’s growth rate. – Guardian
Dr Martens has reported a 33pc increase in earnings before interest, taxes, depreciation and amortisation (ebitda) to £50m, citing strong sales in Europe and the Middle East. Group revenue was up 20pc to £348.6m for the year ending March 31, compared to £290.6m the previous year. – Telegraph
US private equity giant Cerberus has been accused of misleading the government on a deal to snap up £13bn worth of mortgages from bust lender Northern Rock. Cerberus bought the huge loan book in 2016 from state-owned UK Asset Resolution (UKAR), the company set up by the Treasury to manage its ownership of failed lenders it took over during the financial crisis. – Telegraph
Britain’s top retailers, including Harrods and Fortnum & Mason, have written to the chancellor asking him to scrap the government’s proposal to digitise tax-free shopping. The letter, signed by some 600 retailers in the West End of London and every retail lobby group, states that the industry has “lost confidence” in the Treasury’s reform of tax-free shopping, which “risks a further loss of international competitiveness post-Brexit”. – The Times
Leading investors in Patisserie Valerie want Luke Johnson, chairman of the troubled café chain, to give up control of an internal investigation into a £40 million hole in its accounts over concerns that the review is not sufficiently independent. Invesco, a top ten shareholder in the Aim-listed company, has told Mr Johnson and the board of Patisserie Holdings, the parent company, to hand over the investigation to a law firm or an independent investigation firm during talks last week, according to people familiar with the matter. – The Times
US close
Wall Street trading finished on a mixed note on Monday, with US-China trade developments back in the spotlight.
The Dow Jones Industrial Average ended the session down 0.5% at 25,317.41 and the S&P 500 slipped 0.43% to 2,755.88, while the Nasdaq Composite was 0.26% higher at 7,468.63.
US stocks rose modestly at the open earlier, as global equities took a cue from Chinese markets.
However, they quickly headed south again with US-China trade developments back in the spotlight, following reports that White House economic advisor Larry Kudlow had accused Beijing of doing nothing to ease trade disputes ahead of a G-20 meeting in Argentina next month.
"This development has not only reduced optimism over the United States and China finding a middle ground on trade but raised prospects of the US next year boosting the tariffs on $200bn of Chinese imports from 10% to 25%," said Lukman Otunuga, research analyst at FXTM.