Whitbread beats profit forecasts, Virgin and Stagecoach team up with SNCF

Josh White Sharecast | 25 Apr, 2017 07:42 | | |

London open

The FTSE 100 is expected to open 19 points higher on Tuesday, after closing up 1.22% at 7,264.68 on Monday.

Stocks to watch

Wealth manager St James's Place said first quarter gross inflows rose 32% to £3.23bn with net inflows up to £1.99bn from £1.36bn. Group funds under management rose to £79.84bn from £62.02bn. Chief executive David Bellamy said high client retention had contributed to the strong result.

Transport operators Stagecoach and Virgin Group have teamed up with French high speed operator SNCF to bid for the west coast partnership rail franchise. The companies have already worked together on the expression of interest stage of the bid, which was submitted on Monday, and they will now prepare for the ‘invitation to tender’ stage, which is expected to be issued by the end of the year.

Whitbread beat profit forecasts for the year and although it reported a good start to 2017 it warned of a tougher consumer environment than last year. Underlying profit before tax 6.2% to £565.2m in the year to 2 March, as Premier Inn saw revenue per available room decline 0.6% and Costa Coffee's UK like-for-like sales grow 2.0%.

Retail bank Virgin Money posted a trading statement on its first quarter on Tuesday, claiming continued strong progress with gross mortgage lending at £2bn for a market share of 3.4%. The FTSE 250 company said net mortgage lending was £0.9bn in the quarter - a market share of 12.3% - while credit card balances stood at £2.7bn with “stable” customer behaviour and arrears levels. Its net interest margin was reportedly in line with the full year 2016 result.

Newspaper round-up

Britain will have to settle a demand for €2 billion over its failure to tackle customs fraud before it can agree a post-Brexit trade deal with the EU, senior Brussels sources have said. European officials believe that HM Revenue & Customs is failing to curb Chinese crime gangs that systematically undervalue goods imported into the EU through Dover and Felixstowe, avoiding billions of pounds in customs duty and VAT. - The Times

Wall Street banks are considering setting up “pop-up” branches in European countries to deal with trading after Brexit while keeping the bulk of their work for continental clients in London. The plan, which is being kept confidential as lawyers and regulatory experts refine the details, could put banks on a collision course with European regulators, which fear a “brass plate” syndrome of lenders not having a proper presence in their countries. - The Times

The government appears to have performed a weekend U-turn on business rates and says a £300m relief fund to help small businesses worst hit by the shakeup is now available for councils to share out. Having on Friday said distribution of the money would require the approval of the new government after the 8 June general election, communities secretary Sajid Javid insisted: "Councils are free to start using the scheme and helping local businesses." - Guardian

An activist American hedge fund has built up a 6.8 per cent share in WS Atkins, the British engineering design consultant that is to be bought by a Canadian rival. Elliott Advisors declined to comment on its intentions when it disclosed its position in Atkins yesterday. - The Times

Marine Le Pen announced on Monday night that she was temporarily stepping down as head of France's Front National party in a bid to widen her appeal ahead of next month's presidential election run-off. The far-Right candidate will face Emmanuel Macron, the centrist, on May 7 with the country divided as never before over Europe. - Telegraph

US close

US equity markets were in the green on Monday over investor relief on centrist Emmanuel Macron winning the first round in the French presidential election and on hopes of possible tax reform.

European stocks had rallied after Macron first round victory and the optimism followed to Wall Street on Monday.

The Dow Jones Industrial Average added 1.05% to 20,763.89, the S&P 500 was up 1.08% to 2,374.15 and the Nasdaq 100 rose 1.21% to 5,508.03.

Investors were hopeful that europhile Macron will beat off far-right nationalist and eurosceptic Marine Le Pen in the run-off in the french presidential election on 7 May.

With 97.43% of votes counted earlier, Macron had 23.86% to Le Pen's 21.43%.

Jasper Lawler, senior market analyst, at London Capital Group, said: “Macron as President is not a done deal yet with the final result not known until 5 May, but the way markets are reacting, it may as well be.

“There is some justification for the overconfidence in a Macron presidency.”

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