Portfolio

Dominos reinstates deferred dividend, InterContinental posts loss as occupancy plunges

By Josh White

Date: Tuesday 11 Aug 2020

(Sharecast News) - London open

The FTSE 100 is expected to open 41 points higher on Tuesday, having closed up 0.31% at 6,050.59 on Monday.
Stocks to watch

Pizza delivery company Dominos reinstated a deferred dividend but said the risk of a second lockdown meant an interim payout would be suspended as it reported a fall in underlying profits due to Covid-19 costs. Underlying pre-tax profit fell 4.6% to £47.6m, including £6.2m of costs related to the coronavirus pandemic. Trading in the first weeks of the second half had improved as lockdown measures eased and outlets reopened, Premier League football returned and the government cut sales tax on hot food. The deferred full-year dividend of 5.56p per share, worth £26m, would now be paid next month, the company said on Tuesday.

InterContinental Hotels suffered a $233m (£178m) loss in the first half as occupancy at its hotels plunged during the Covid-19 crisis. The FTSE 100 company swung to an operating loss for the six months to the end of June from a profit of $442m a year earlier as revenue fell 45% to $1.25bn. Revenue per available room dropped by 52%.

Derwent London reported gross rental income growth of 5% in its first half on Tuesday, to £97.8m, as its EPRA earnings per share fell to 48.9p, from 51.3p year-on-year. The FTSE 250 commercial landlord said that included 5.8p of costs per share linked to the Covid-19 pandemic. Its board hiked its interim dividend 4.8% to 22p per share, and said it still had undrawn facilities and cash of £502m, down from £511m at the start of the period.

Newspaper round-up

Many victims of bank transfer scams are being treated unfairly and the chances of them getting their money back is often a lottery, according to Which?. The UK consumer association is pressing for the voluntary code that is supposed to protect consumers to be made mandatory, and said the number of people being reimbursed by their bank was "woefully low". - Guardian

The problems facing high streets up and down Britain are laid bare by analysis of official data showing the struggles that retailers were already facing before the Covid pandemic hit. In the three years to 2018, retail employment had declined across all regions, except in the north-west of England, according to the report for the Office for National Statistics. - Guardian

Collapsed hospital firm NMC Health is being investigated over claims of fake invoices and forged documents relating to hundreds of millions of dollars worth of sales. - Telegraph

The Bank of England will do more and faster quantitative easing if the economy slows and markets wobble again, a senior official has said. Sir Dave Ramsden, deputy governor for markets and banking and a member of the Bank's monetary policy committee, said that the pace of gilt purchases under QE would accelerate if "we saw signs of [market] dysfunction" and that the Bank had "significant headroom to do more QE" if economic risks crystallised. - The Times

The first six months of this year was the worst on record for British travel, leisure and retail companies, with record numbers having to issue profit warnings as the pandemic wreaked havoc on them. Almost three quarters of listed businesses in those industries were forced to warn shareholders that profits would be materially below what had been expected before coronavirus struck, according to a report from EY, one of the Big Four accountancy firms. - The Times

US close

Wall Street trading was mixed on Monday after Donald Trump signed an executive order extending the nation's Covid-19 unemployment relief programme.

At the close, the Dow Jones Industrial Average was up 1.30% at 27,791.44 and the S&P 500 was 0.27% firmer at 3,360.47, while the Nasdaq Composite was 0.39% lower at 10,968.36.

The Dow Jones closed 357.96 points higher after the President's orders to carry on the distribution of expanded benefits.

The executive order will see unemployment payments reduced from $600 a week to $400 and will also continue the deferment of student loan payments through 2020, extend a federal moratorium on evictions and provide a payroll tax holiday.

The move comes after congressional leaders were unable to make any headway on a new Covid-19 stimulus package last week, raising uncertainty about the US economy going forward.

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