LONDON MARKET PRE-OPEN: Aston Martin confirms ex-Ferrari boss as CEO

(Alliance News) - Stock prices in London are seen opening slightly lower on Wednesday as investors await what is expected to be the biggest US Federal Reserve interest rate hike in over two decades.

In early company news, gambling firm Flutter Entertainment enjoyed an upbeat first quarter. Luxury carmaker Aston Martin Lagonda confirmed a change in leadership in tandem with first-quarter results.

IG futures indicate the FTSE 100 index is to open 4.03 points lower at 7,557.30. The index ended up 16.78 points, or 0.2%, at 7,561.33 on Tuesday.

Flutter Entertainment reported a rise in first-quarter earnings as the gambling operator hailed the strength of its US business.

For the three months that ended March 31, revenue rose 5.4% to GBP1.57 billion from GBP1.49 billion in the first quarter last year. Average monthly players increased 15% to 8.9 million from 7.7 million.

In the US, Flutter's FanDuel business delivered another "excellent performance" with 2.4 million customers and revenue of USD574 million during the quarter. It remained the number one US sportsbook with a 37% online sports betting share, Flutter said.

The company said it launched its FanDuel sportsbook in New York and Louisiana in January and expanded into Ontario in April. It also beat FanDuel records in the quarter, with Super Bowl Sunday the single biggest day ever for new customers with 1.5 million active customers on the day.

In February, the Los Angeles Rams defeated the Cincinnati Bengals to win Super Bowl LVI, becoming the second NFL team to win the Super Bowl in its home stadium.

Chief Executive Officer Peter Jackson said: "Outside of the US, our business performed well, adapting to the evolving regulatory and trading environment and reflecting the benefits of our global diversification. In the UK and Ireland we launched several new products in the quarter. I look forward to the imminent release of the UK government's white paper on its review of the Gambling Act.

"In Australia, Sportsbet delivered good growth from ongoing customer driven momentum, with excellent retention of players acquired in 2021. Our International business benefited from strong performance in focus markets and we hope to complete the [online gaming firm] Sisal acquisition in the third quarter. With our enlarged recreational customer base, winning position in the US and ongoing focus on sustainable growth, our business remains well placed for the future."

Aston Martin Lagonda Global Holdings said its first-quarter performance was in line with expectations as the luxury carmaker confirmed the appointment of a new chief executive.

For the three months ended March 31, revenue was GBP232.7 million, up 3.7% from GBP224.4 million the year before. However, its pretax loss was GBP111.6 million, widened from GBP42.2 million in the first quarter last year.

The carmaker said the revenue increase was driven by "strong pricing dynamics" throughout its core portfolio and Aston Martin Valkyrie programme deliveries of 14 vehicles. The Valkyrie is a limited production hybrid sports car that comes with a price tag of GBP2.5 million.

Aston Martin said first-quarter wholesale volumes were 1,168, down 14% from 1,353 the year before. Aston Martin said wholesales were down as the company prepares for start of DBX707 production, as well as due to supply constraints. The DBX707, which Aston Martin touts as the world's most powerful luxury SUV, launched in February. The company said the DBX orderbook was up 60% on the prior year.

Looking ahead for 2022, Aston Martin still expects an 8% rise in core volumes and a 50% improvement in adjusted core earnings before interest, tax, depreciation, and amortisation. Promisingly, retail sales outpaced wholesales in the first quarter, the company said.

The Gaydon, Warwickshire-based firm also confirmed a report by the Financial Times that Chief Executive Officer Tobias Moers will leave the board immediately and the company at the end of July.

Aston Martin confirmed the appointment of ex-Ferrari boss Amedeo Felisa as its new CEO, with Executive Chair Lawrence Stroll saying the company needs to "enter a new phase of growth and development".

"We believe these changes will bring significant long-term benefits to everyone involved with Aston Martin. We are poised to deliver good growth in 2022 and remain extremely confident in the medium and long-term prospects for the company as we transform Aston Martin into the world's most desirable ultra-luxury British performance brand," said Stroll.

Moers's dual role of CEO and chief technology officer will be split, with another former Ferrari executive, Roberto Fedeli, brought in to be CTO.

National Grid's Western Power Distribution, the largest electricity distribution network operator in Great Britain, has agreed to make a voluntary redress payment of GBP14.9 million after failing vulnerable customers, UK regulator Ofgem said.

WPD accepted that it failed to meet its obligations after instances of failing to provide information, advice and services to customers on its Priority Services Register.

Cathryn Scott, director of enforcement and emerging issues at Ofgem, said: "WPD did not meet all of its obligations to provide additional support to some of its most vulnerable customers to safeguard their well-being. In our view it also took too long to put this right. This is totally unacceptable.

"Our enforcement against the company sends a strong message that when companies fail to provide the required services to their Priority Services Register customers, Ofgem will take action."

Calls for an apprehensive start in London come ahead of the Fed's rate decision.

The Federal Open Market Committee will conclude its two-day policy meeting on Wednesday and announce its decision at 1900 BST. This will be followed by a press conference with Fed Chair Jerome Powell at 1930 BST.

Following a quarter-point increase in the benchmark lending rate in March, Powell and other US central bankers have said a half-point increase could be announced. It would be the first time since 2000 that the Fed has raised rates by 50 basis points at one meeting.

"Today's Federal Reserve rate decision should be of no surprise to most people with a 50 basis points rate rise expected, which should take the upper bound of the Fed Funds rate to 1%. This is the least of market expectations, when it comes to what the Fed may well announce today, with an outside chance we might get some members push for a 75bps hike," said CMC Markets analyst Michael Hewson.

"The biggest question will be around the pace of its balance sheet reduction program along with the pace of subsequent rate hikes, with the potential for another 50bps hike to come in June," Hewson added.

The dollar was higher ahead of the Fed decision. The pound was quoted at USD1.2481 early Wednesday, down from USD1.2511 at the London equities close Tuesday.

The euro was priced at USD1.0515, lower against USD1.0535. Against the yen, the dollar was trading at JPY130.17, up from JPY129.97.

In Asia on Wednesday, the Hang Seng index in Hong Kong was down 1.0%. The S&P/ASX 200 in Sydney ended down 0.1%. Financial markets in Tokyo and Shanghai remained closed for public holidays on Wednesday.

Brent oil was trading at USD106.38 a barrel Wednesday morning, higher against USD106.12 late Tuesday. Gold stood at USD1,864.45 an ounce, down from USD1,873.30.

Wednesday's economic calendar has a raft of PMIs due from Germany at 0855 BST, the eurozone at 0900 BST and the US at 1445 BST.

By Arvind Bhunjun; arvindbhunjun@alliancenews.com

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