The FTSE 100 is called to open higher this morning although gains may be limited given the mixed overnight performances on Wall Street and in Asia with the Greek situation continuing to dominate investor sentiment. The economic diary today sees an emergency eurozone summit and eurogroup meetings as European leaders meet to try to find some sort of resolution with Greece. On the domestic economic front, both manufacturing and industrial production figures are due for release which will be followed at lunchtime in the US with trade balance data. Commodity prices are mixed and on the foreign exchanges, the dollar is slightly higher against the pound, euro and yen but all are within narrow trading ranges ahead of these data releases and eurozone meetings.
Company Announcements
Marks & Spencer
Q1 2015/16 Trading Update reports that group sales rose 1.8% led by strong food sales of +3.2% with lfl +0.3%. General Merchandise (GM) sales were 'broadly level' on last year with sales +0.2% and lfl -0.4% with GM on track to deliver the improvement in gross margin previously guided of +150 to 200bps. M&S.com sales were very strong, albeit against a soft post launch comparative with the international business showing 'modest growth' on a constant currency basis. It added that all full year guidance remains unchanged.
Stagecoach
It has been informed by the Department for Transport (DfT) that it is ending the discussions with its subsidiary South West Trains regarding the direct award of a new rail franchise. The current franchise is due to end in February 2017. Despite extensive negotiations, a significant difference has remained between the parties on the financial evaluation of new franchise proposals with the DfT now indicating it plans to invite tenders for a new long-term franchise to start sometime in 2017. Stagecoach notes as the incumbent operator with nearly 20 experience, it believes it is in a strong position to submit a bid, adding that it remains positive about opportunities in the UK rail market.
ASOS
Trading Statement for the 4 months to end June 2015 sees retail sales +20% (UK retail sales +27% and international sales +16%). Full year gross margin is expected to remain in line with last year and it anticipates that sales for the full year will be at the higher end of its guided 15%-20% growth range. It added that it expects EBIT margin to remain at the guided level of c. 4% and had 9.7m active customers at the end of June, a rise of 11% yoy.
Contributed by SVS Securities
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