London pre-open: Stocks seen higher; Lloyds, Centrica in focus
By Michele Maatouk
Date: Thursday 20 Feb 2025
(Sharecast News) - London stocks were set to gain at the open on Thursday following losses in the previous session and after a positive close on Wall Street.
The FTSE 100 was called to open around 15 points higher.
Investors will be mulling a survey out earlier from the British Retail Consortium, which showed that UK consumer confidence worsened this month, with views about the economic situation and personal finances taking a hit.
The BRC Consumer Sentiment Monitor for February showed that 50% of people expect the state of the UK economy to worsen over the next three months, up from 48% in January and 42% in December.
With just 13% of consumers expecting better conditions and 32% predicting no change, that nets out to a balance of -37, down from -34 the month before.
This was the fifth straight month of worsening expectations, and a sharp drop since the summer, when more people predicted an improvement in conditions than a deterioration.
"People's expectations of the economy reached a new low, having fallen almost 40 points since July 2024," said the BRC's chief executive Helen Dickinson.
Consumer views of their own financial situation fell to a balance of -11 in February from -4 in January, and while personal retail spending expectations rose to -5 from -9, this may have been driven by expectations of higher prices in the coming months, the BRC said.
"With many businesses warning of the impact that April's employer NIC's increase will have on hiring, and the rising energy price cap pushing up the cost of domestic bills, it is little surprise that many households are worried," Dickinson said.
Two-thirds of retailers have said that prices will have to rise due to £7bn of additional costs coming their way, which include higher employer national insurance contributions and a new packaging levy, the BRC said.
"With many businesses warning of the impact that April's employer NIC's increase will have on hiring, and the rising energy price cap pushing up the cost of domestic bills, it is little surprise that many households are worried. And while there was a positive increase in expectations of personal retail spending, this may be largely driven by the expectations of higher prices in the future," Dickinson said.
In corporate news, lender Lloyds Bank said annual profit fell 20.4%, worse than expected, and set aside an extra £700m to cover potential claims against motor finance commission deals.
Pre-tax profit came in at £5.97bn, compared to £7.5bn a year earlier and consensus estimates of £6.39bn.
Net interest margin - the difference between savings and loan rates - fell 16 basis points to 2.95%.
Recruiter Hays reported a drop in first-half profit amid "challenging" market conditions, as economic and political uncertainty weighed on client and candidate confidence.
Hays said this drove lower placement volumes and a material lengthening of its 'time-to-hire'.
In the six months to the end of December 2024, operating profit fell 58% to £25.5m, while net fees were down 15% at £496m.
Centrica reported a decline in full-year adjusted EBITDA to £2.3bn, from £3.5bn in 2023, with adjusted operating profit falling to £1.6bn amid lower commodity prices and reduced profitability in energy storage.
The energy supplier maintained a strong balance sheet, returning £0.7bn to shareholders through dividends and buybacks, while increasing its full-year dividend by 13% to 4.5p per share.
Looking ahead, Centrica reaffirmed its 2025 outlook, targeting stable performance across its key business segments and announcing a further £500m share buyback extension, with plans to raise its dividend to 5.5p per share.
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