(Alliance News) - Stock prices are seen opening lower on Friday after scares of a nuclear disaster in Ukraine following direct shelling of a nuclear power plant, while a business group has downgraded its expectations for UK economic growth this year.
In early corporate news in the UK, Hammerson's annual loss narrowed in 2021, while Morgan Advanced Materials was able to return to the black. Mitie noted the UK competition regulator is getting involved in the bidding process for two Immigration Removal Centres.
IG futures indicate the FTSE 100 index is to open 37.8 points lower at 7,196.2. The index closed 2.6% lower at 7,238.85 Wednesday.
In the US on Wednesday, Wall Street ended lower. The Dow Jones Industrial Average closed down 0.3%, S&P 500 down 0.5%, and Nasdaq Composite down 1.6%.
Fighting broke out between Russian and Ukrainian forces Friday near Europe's largest nuclear power plant, causing a blaze and raising alarm from global leaders of a potential massive disaster.
Emergency services in Ukraine said that they had extinguished the fire after Kyiv blamed Russian military shelling for the blaze.
"No country other than Russia has ever fired on nuclear power units," Ukrainian President Volodymyr Zelensky said in a video message released by his office. "This is the first time in our history. In the history of mankind. The terrorist state now resorted to nuclear terror."
He accused the Russian troops of knowingly firing on the nuclear facility.
"These are tanks equipped with thermal imagers, so they know where they are shooting," said Zelensky.
Analysts at Berenberg said: "Russia’s brutal invasion of Ukraine is the worst war in Europe since 1945 and the most severe threat to global security since the Cuban missile crisis of 1962. It changes the near-term outlook for growth and inflation in the advanced world and beyond. But short of highly unlikely tail risk scenarios, we expect solid economic fundamentals to reassert themselves and still deliver above-trend gains in nominal and real GDP for 2022 and 2023 as a whole on both sides of the Atlantic."
In London, property development and investment company Hammerson said it saw net rental income drop in 2021 as the firm continues to "realign" its portfolio.
For 2021, Hammerson recorded a pretax loss of GBP408.0 million , narrowed sharply from GBP1.74 billion in 2020.
The narrowed loss was aided by a GBP457.5 million revaluation loss on its managed properties, which had been GBP1.44 billion in 2020. Hammerson also recorded a GBP171.3 million loss from joint ventures in 2021, compared to a whopping GBP880.2 million loss in 2020.
Gross rental income fell to GBP241.6 million from GBP286.9 million.
It declared a final dividend of 0.2 pence, unchanged from the year before.
"Since the beginning of 2021, we have made fundamental changes in our business, realigning our portfolio with GBP623 million of disposals, significantly strengthening the balance sheet, re-setting our organisation and putting in place a clear strategy for value creation focused on our prime urban estates," Chief Executive Rita-Rose Gagne said.
Mitie Group said it is aware the UK competition regulator is looking into the firm's involvement in the procurement process run by the UK government for the contracts to supply certain services at Heathrow and Derwentside Immigration Removal Centres in the UK.
Mitie noted it withdrew from the Derwentside IRC tender process, without submitting a bid, but remains "engaged" in the Heathrow IRC tender process. It stepped aside from Derwentside due to the Home Office's "lotting conditions", which prevents a single bidder from winning both contracts.
"Mitie strongly condemns anti-competitive practices and is co-operating fully with the CMA and the investigation. Mitie is confident that it has no case to answer and will be fully exonerated," the company said.
Morgan Advanced Materials swung back to profit in 2021 despite a "challenging" year.
For 2021, pretax profit was GBP104.3 million, compared to the GBP1.8 million loss in 2020, on revenue that grew 4.4% to GBP950.5 million from GBP910.7 million.
Morgan Advanced declared a total annual shareholder payout of 9.1 pence, up from 5.5p in 2020.
Chief Executive Pete Raby said: "I am extremely proud of how our people have worked together this year, looking out for each other and delivering for our customers. We made further progress with the execution of our strategy, strengthening our capabilities and improving the sustainability of our business.
"In spite of the challenges, we have made good progress as a business, with further implementation of our strategy and progress against our long-term goals. This resulted in strong growth and saw margins at their highest point in more than 20 years."
discoverIE Group said it has completed the sale of its electronic component distribution business, Acal BFi, to H2 Equity Partners. The GBP50.0 million deal was first announced in early November.
It also noted the sale of Vertec SA to its management team, which was announced in October, completed in January.
discoverIE said the proceeds will be used to reduce its debt.
Meanwhile, a UK business group has downgraded its expectations for economic growth this year amid soaring inflation, tax rises and global shocks, including Russia's invasion of Ukraine.
The British Chambers of Commerce predicted growth of 3.6%, down from 4.2% in its previous forecast in December, warning the UK economy is forecast to run out of steam in the coming months.
The BCC said the downgrade largely reflects a deteriorating outlook for consumer spending and a weaker-than-expected rebound in business investment.
Consumer spending is forecast to grow at 4.4% this year, down from its previous forecast of 6.9%, reflecting the "historic squeeze" on real household incomes from high inflation, said the BCC.
Business investment is forecast to grow at 3.5%, down from the previous forecast of 5.1%, amid the expected weakening in investment intentions from rising cost pressures, higher taxes and falling confidence amid deteriorating UK and global outlooks, including the impact of Russia's invasion of Ukraine.
In the retail sector, UK retail footfall inched closer to pre-virus levels in February, figures on Friday showed, despite storms battering towns and cities up and down the country.
According to the latest British Retail Consortium-Sensormatic IQ monitor, retail footfall declined 15% on a two-year basis in February. The decline eased from a 17% fall in January.
"February saw an improving picture for the High Street as shopper traffic continued to recover. Total UK footfall reported the highest number of shopper counts seen since pre-pandemic levels in the last week of the month and the UK now leads the top 5 European markets' footfall recovery, suggesting a growing confidence among shoppers, with UK governments announcing the further easing and ending of covid restrictions," Sensormatic Solutions analyst Andy Sumpter commented.
On high streets alone, footfall was 19% below pre-virus levels in February. High street footfall was 22% lower on two years earlier in January. In retail parks, footfall was down 10% from two years earlier, narrowing a touch from 11% in January. Shopping centre footfall was 35% below pre-Covid levels in February, improving from 37% in January.
In Asia on Thursday, the Japanese Nikkei 225 index closed down 2.2%. In China, the Shanghai Composite ended down 1.0%, while the Hang Seng index in Hong Kong was 2.5% lower in late trade. The S&P/ASX 200 in Sydney closed down 0.6%.
The pound was quoted at USD1.3322 early Thursday, down from USD1.3341 at the London equities close Wednesday.
The euro was priced at USD1.1011, down from USD1.1047. Against the yen, the dollar was trading at JPY115.45, lower against JPY115.63.
Brent oil was quoted at USD111.24 on Thursday morning, down from USD119.84 late Wednesday.
Gold stood at USD1,936.70 an ounce, higher from USD1,928.05 late Wednesday.
Friday's economic calendar has EU retail trade at 1000 GMT and the US monthly jobs report at 1330 GMT.
By Paul McGowan; paulmcgowan@alliancenews.com
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