Portfolio

M&G profit almost halves, Balfour Beatty swings to loss

By Josh White

Date: Wednesday 12 Aug 2020

(Sharecast News) - London open

The FTSE 100 is expected to open 10 points higher on Wednesday, having closed up 1.71% at 6,154.34 on Tuesday.
Stocks to watch

M&G's first-half profit more than halved as the savings and investments company suffered fund outflows and pressure on retail margins. Adjusted operating pretax profit fell to £309m from £714m in the six months to the end of June as fee-based revenue dropped to £580m from £637m. The company declared an interim dividend of 6p a share.

Construction giant Balfour Beatty swung to an interim loss as the coronavirus lockdown shut down building sites, but increased its order book and maintained full year guidance. The company on Wednesday reported a pre-tax loss of £26m for the six months to June 26 compared with a profit of £63m. No dividend was declared. Balfour's group order book increased to £17.5bn from £14.3bn at the end of 2019.

Spirax-Sarco reported a 4% fall in reported revenue in its first half on Wednesday, to £569.7m, while its organic revenue slid 5%. The FTSE 100 engineering company said its adjusted operating profit was down 8% year-on-year for the six months ended 30 June, at £119m, while its adjusted operating profit margin slid 100 basis points to 20.9%. Its board hiked the interim dividend by 5% to 33.5p.

Newspaper round-up

The government has been urged to demonstrate there was no favouritism at play in awarding Serco a contact-tracing contract worth £108m, as a leaked memo revealed the outsourcing firm was enlisted to help with the Covid-19 response as early as January. Serco is facing growing calls to be axed from any future involvement in contact-tracing services amid concerns over the performance of private firms contracted to trace people who have mixed with infected individuals. - Guardian

Online political advertisements could require labels for the first time under plans unveiled by the government, in an effort to inject more transparency into digital campaigning. The rules would require a "digital imprint", revealing who is behind the message, to be included on formal campaign ads as well as "organic" content made by certain campaigners and candidates on sites such as Twitter, Facebook and YouTube. - Guardian

Airbnb is planning to file for a US float in the coming weeks, putting the short-term rental company on course to go public by the end of this year. - Telegraph

Amazon has come under further pressure to reverse its decision to pass on the digital services tax to small businesses in Britain after eBay said that it would absorb the levy. The digital services tax was introduced in April as part of the government's efforts to level the playing field with high street shops and to tackle online companies that pay little tax on their huge revenues. The levy is a 2 per cent tax on revenues generated in the UK. It is thought that the tax will cost eBay at least £20 million this year, based on its last available accounts, which show that the online marketplace made sales of £1 billion in 2018. - The Times

British Airways has made what it calls "significant progress" in talks with unions over plans to restructure its business. In a letter sent to staff, which has been seen by the Times, Álex Cruz, chief executive, said that the airline had signed an agreement in principle over the future of parts of its workforce. - The Times

US close

Wall Street stocks closed lower on Tuesday despite Russia giving regulatory approval for the world's first Covid-19 vaccine.

At the close, the Dow Jones Industrial Average was down 0.38% at 27,686.91, while the S&P 500 was 0.80% weaker at 3,333.69 and the Nasdaq Composite saw out the session 1.69% weaker at 10,782.82.

The Dow closed 104.53 points lower on Tuesday, reversing gains recorded in the previous session after Donald Trump signed an executive order extending the nation's Covid-19 unemployment relief programme.

Both the Dow and S&P 500 initially rallied higher after Russian President Vladimir Putin claimed the nation had granted regulatory approval for the world's first Covid-19 vaccine. While concerns about how quickly Russia had managed to develop a safe vaccine abounded, the announcement left market participants optimistic about the race for an inoculation.

Johnson & Johnson also claimed it could produce as many as 1.0bn doses of its own Covid-19 vaccine candidate if it proves successful.

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