TUI operating profit to come in at upper end of guidance
London open
City sources predict the FTSE 100 will open around 18 points lower than yesterday's close of 6,557.52.
Stocks to watch
TUI Travel said its full year underlying operating profit growth would be towards the upper end of its previous guidance after a solid finish to the year. Chief executive Peter Long said trading during the summer 2014 peak season, particularly in the UK and Germany, was strong, with most programmes now almost fully sold thanks to increased customer demand for unique holidays and higher conversion rates from its web platforms.
Print-head maker Xaar has again warned on profits for both the current and next full year as a further slowdown in Chinese tile production activity has hit demand for its products. A third-quarter update explained that sales for 2014 are now expected to be 5-10% below the recent profit guidance of £115-125m, with profits likely to be "materially" lower due to the company's high operating leverage.
Housebuilder Galliford Try has been appointed by the Education Funding Agency (EFA) as selected panel member for the Greenwich, Lewisham and Croydon Priority School Building Programme batch, worth more than £45m. It marks Galliford Try's third success since being appointed to the EFA's main contractor framework last year.
It was a strong performance from clothing retailer Ted Baker in the 28 weeks ended 9 August, with revenue up 17% to £182.2m and profit before tax jumping 33.8% to £15.6m. The group also increased its dividend payment by 18.9% to 11.3p.
In the Press
Six of the main energy suppliers are facing losing a quarter of their profits over the next six years, the Guardian reported on Thursday. According to City financial analysts, if such a high number of customers were to defect, it would knock £500m a year off the companies’ collective profits.
The Independent reported that the Financial Conduct Authority (FCA) has launched an investigation into the £250m overstatement of half-year profit by Tesco. The retailer said it had been notified that the FCA had launched a “full investigation” and that it would "continue to co-operate fully with the FCA and other relevant authorities considering this matter".
David Cameron has promised £7bn of tax cuts by 2020 if his party wins the general election in May, The Daily Telegraph reported. The cuts, the prime minister said, were aimed at those on above average incomes and not backed by any new sources of funding. Under Cameron’s plans, the personal tax allowance will rise from £10,500 next year to £12,500 in 2020, while the higher rate tax threshold would increase from £42,265 next year to £50,000 at the same date.
US close
US stocks fell on Wednesday, amid growing signs of economic weakness in Europe and increasing concerns over Ebola, after a first case was confirmed in Texas on Tuesday.
The S&P 500 dropped 1.32% to 1,946.16 points, its lowest level since 12 August, while the Dow Jones Industrial Average closed 238.19 down to 16,804.71points and the Nasdaq lost 71.31 to 4,422.08 points.
The Dow Jones Transportation Average dropped the most since February as airline stocks slid after the first reported US case of Ebola, with American Airlines falling 3%, while Delta Airlines shed 3.4%.