(Alliance News) - Stock prices in London are seen opening lower on Thursday, tracking slight falls in Asian equity markets, as investors sift through another set of updates from prominent UK companies.
Among these, insurer Aviva launched a GBP750 million share buyback, and gambling operator Entain posted strong interim results.
IG futures indicate the FTSE 100 index is to open 23.64 points lower at 7,196.50. The blue-chip index closed up 59.10 points, or 0.8%, at 7,220.14 on Wednesday.
Aviva reported pretax profit from continuing operations for the six months that ended June 30 of GBP396 million, down from GBP739 million a year before.
Total income more than doubled to GBP14.78 billion from GBP6.98 billion, as Aviva swung to net investment income of GBP7.35 billion from a net investment expense of GBP1.28 billion. However, the company booked a GBP8.45 billion hit on changes in investment contract provisions, swung from a GBP5.72 billion gain a year before.
Net earned premiums declined by 12% to GBP6.65 billion from GBP7.51 billion a year ago.
Aviva said it has made good progress on all fronts in the 12 months since it launched its new strategy to focus on the UK, Ireland and Canada, having sold operations elsewhere.
Aviva declared an interim dividend of 7.35 pence a share, up 5.0% from 7.00p a year before. What's more, Aviva said that it aims to buy back up to 300 million shares for up to GBP750 million to reduce its share capital. The programme will start on Friday.
"We intend to return at least GBP4 billion to investors by the end of the first half of 2022, starting with a share buyback of up to GBP750 million," Chief Executive Amanda Blanc said.
"Alongside delivering growth, we continue to focus on reducing controllable costs, which are down 2%. We are on track to deliver our GBP300 million savings target in 2022 and are focused on achieving top quartile efficiency in all our businesses," Blanc added.
Entain said it saw strong first half performance with continuing momentum across its brands.
For the six months to June 30, revenue was GBP1.77 billion, up 12% from GBP1.58 billion last year, and pretax profit was GBP130.6 million, almost triple from GBP45.1 million.
Entain said first half retail net gaming revenue was down 46% amid betting shop closures, but online NGR excluding Germany was up 38%. Entain said a new regulatory regime in Germany was hurting the online gaming market there.
Despite the strong results, Entain did not propose an interim dividend, but it said it expects that with full-year results in March it will be in a position to recommence payouts.
The Ladbrokes brand owner in the UK also said its joint venture in the US with MGM, ResortsBetMGM, continues to perform strongly and is well positioned for further success in the second half.
Chief Executive Officer Jette Nygaard-Andersen said: "In the US, BetMGM goes from strength to strength with our position as number 2 operator firmly established in the fast-growing sports-betting and iGaming market. We expect to be operational in around 20 states, representing 33% of the US adult population, over the next 12 months.
"Entain has a long runway for sustainable growth built into our core business. In addition, our unique powerful platform puts us at the heart of the convergence of media, entertainment and gaming, providing us with exciting opportunities in interactive entertainment that we believe will further power our growth for many years to come."
The Japanese Nikkei 225 index closed down 0.2%. In China, the Shanghai Composite was down 0.1%, while the Hang Seng index in Hong Kong was down 0.7%. The S&P/ASX 200 in Sydney closed down 0.1%.
China on Wednesday unveiled plans to tighten regulation across multiple sectors over the coming years, weeks after it hit stocks by cracking down on a range of industries including tech firms.
A statement said sectors including private tutoring, and food and drugs would see tougher legal enforcement, fuelling concerns officials were not finished with moves to tighten their grip on the economy.
"Asia markets have been slightly more reticent after China released a five-year plan outlining its roadmap for greater business regulation, as it steps up its oversight on certain sectors. This underperformance in Asia looks set to translate into a mixed European open," CMC Markets analyst Michael Hewson said.
In the US on Wednesday, Wall Street ended mostly higher, with the Dow Jones Industrial Average up 0.6% and S&P 500 up 0.3%, but the Nasdaq Composite closed down 0.2%. Both the Dow and S&P 500 finished at all-time highs again amid signs US inflation is starting to moderate.
The US consumer price index rose by 5.4% in July from a year before, the same pace as June's 13-year high, according to figures from the Department of Labor on Wednesday. The latest reading was slightly above market expectations, cited by FXStreet, of 5.3% inflation.
The news helped soothe lingering concerns of accelerating inflation, which could pressure the Federal Reserve to hasten its plan to tighten the accommodative monetary policies that have been key to driving a rally across world markets for more than a year.
The dollar was lower across the board. The pound was quoted at USD1.3867 early Thursday, up from USD1.3863 at the London equities close on Wednesday.
The UK economy rebounded sharply on an annual basis in June as the economy continued to reopen and the country pressed head with its mass-vaccination drive, the Office for National Statistics said on Thursday.
In the three months to June, UK gross domestic product grew 4.8% quarter-on-quarter, following a contraction of 1.6% in the first quarter of 2021. The print was in line with market forecasts, cited by FXStreet.
On an annual basis, the UK economy expanded 22% in the second quarter, rebounding significantly from the height-of-pandemic comparison, having shrank by 6.1% in the first quarter from a mostly pre-pandemic comparative period. The second-quarter reading was in line with the market estimate.
The euro was priced at USD1.1740, higher from USD1.1737. Against the Japanese yen, the dollar was trading at JPY110.40, down from JPY110.47.
Brent oil was quoted at USD71.38 early Thursday, up sharply from USD70.14 a barrel late Wednesday. Gold was trading at USD1,752.50 an ounce, higher against USD1,748.19.
Thursday's economic events calendar has EU industrial output numbers at 1000 BST, before US producer prices and the latest jobless claims at 1330 BST.
By Arvind Bhunjun; arvindbhunjun@alliancenews.com
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