(Alliance News) - Stock prices in London are seen opening lower on Monday as investors look ahead to the resumption of high-level trade talks between the US and China this week.
In early UK company news, building products supplier SIG issued a profit warning and announced the sale of two of its businesses. Banknote printer De La Rue appointed a new chief executive. Audioboom reported an in-line third quarter.
IG futures indicate the FTSE 100 index will open down 12.08 points at 7,143.30. The blue-chip index closed up 77.74 points, or 1.1% at 7,155.38 on Friday.
SIG said it has seen a "deterioration in construction activity levels in key markets" since its interim results last month. The FTSE 250 company pointed to a number of key indicators showing further weakening of the macro-economic backdrop, notably in the UK and Germany.
SIG said this deterioration of trading conditions has accelerated over recent weeks, and political and macro-economic uncertainty has continued to increase. However, the company added that management is taking steps to remedy the situation.
"Further benefits from transformational initiatives and the group's normal seasonality are still expected to deliver a stronger second half. However, the recent further weakening of the trading backdrop as the group has entered its traditionally strongest trading months of the year means that the board is now anticipating, in both the specialist distribution and roofing merchanting businesses, significantly lower underlying profitability for the full year than its previous expectations," SIG said.
Separately, SIG said it has agreed to sell its Building Solutions business to Irish building materials company Kingspan for GBP37.5 million. In addition, SIG agreed to sell its Air Handling division to France Air Management for an enterprise value of EUR222.7 million. The company said a majority of the proceeds would be returned to shareholders.
Identification products firm De La Rue said it has appointed Clive Vacher as its new chief executive officer, effective immediately. Vacher replaced Martin Sutherland who has stood down as CEO after a handover.
Podcast platform operator Audioboom Group said trading in the third quarter was in line with management's expectations.
For the quarter ended September 30, revenue rose 86% to USD5.7 million from USD3.0 million last year. The company's cash position on September 30 was USD2.5 million, down from USD3.4 million on June 30.
"We're pleased to confirm another strong quarter of growth for Audioboom, cementing our position as one of the largest independent podcast companies in the world. New shows launched into our Audioboom Originals Network made a significant impact as we increased our commitment to creative bravery and solidified our marketing strategy. We continue to execute our strategy efficiently, proving our business model both in the US and the UK, and delivering dynamic growth across all our key performance markers," said interim CEO Stuart Last.
The US and China are expected to resume high-level trade talks this week in Washington with Chinese Vice Premier Lie He due to lead a Chinese delegation.
However, hopes of a resolution cooled after reports said China had cut back on the number of areas it is willing to discuss at the top-level trade talks with the US.
"US-China trade talks will resume this week, so traders will be paying close attention, as the trade spat between the two largest economies in the world has been a major source of volatility in the past year. Stocks in Asia largely traded lower overnight as traders aren't overly hopeful of a deal being struck. It was reported that China have narrowed the number of topics they are willing to discuss, which has suppressed investment sentiment. It is believed that China aren't willing to compromise on things like government subsidies or industrial policy - areas the US team are keen for them to reform," said CMC Markets analyst David Madden.
The pound was quoted at USD1.2312 early Monday, firm against USD1.2302 at the London equities close Friday.
UK Prime Minister Boris Johnson will attempt to save his Brexit plan this week after his French counterpart warned that the EU would decide within days whether an agreement would be possible.
The PM told France President Emmanuel Macron that Brussels should not be lured into the "mistaken belief" that Britain could extend its membership of the bloc beyond October 31.
But in a telephone call on Sunday, the French president reportedly informed Johnson that the EU will decide at the end of the week whether a deal is possible.
An Elysee official told the BBC: "The president told [Johnson] that the negotiations should continue swiftly with Michel Barnier's team in coming days, in order to evaluate at the end of the week whether a deal is possible that respects EU principles."
The Japanese Nikkei 225 index closed down 0.2% on Monday. Financial markets in Shanghai and Hong Kong are closed on Monday for public holidays and will reopen on Tuesday.
By Arvind Bhunjun; arvindbhunjun@alliancenews.com
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SIG (SHI)
De La Rue (DLAR)
Oneiro Energy (ONE)