London pre-open: Stocks seen lower as consumer confidence drops

(Sharecast News) - London stocks were set to fall at the open on Thursday as investors mulled a deterioration in consumer confidence. The FTSE 100 was called to open down around 35 points.

A survey released earlier showed that UK consumer sentiment has weakened to fresh lows, as the new year got off to a sluggish start.

According to the latest consumer sentiment monitor from the British Retail Consortium, expectations for the next three months have softened across a number of areas.

The personal finance situation dropped to -4 in January, down one point on December, while the state of the economy eased to -34 from -27.

Respondents also signalled they intended to spend less now the festive season was over. Personal spending on retail fell to -9 from -3, while spending overall declined to 4 from 11.

In contrast, expectations for personal saving in the current quarter increased to -3 from -5 a month earlier.

Helen Dickinson, chief executive of the BRC, said: "As the government warns of tough times ahead, it is little surprise that the public have caught the January blues.

"Concerns [are] most pronounced among older generations. Gen Z (18-to-27 year olds) remain the only group to expect the economy to improve, while two thirds of 60-to-78 year olds expect things to get worse.

"Expectations of retail spending and wider spending both fell significantly, though much of this is likely to be at the end of the Christmas period, as people tightened their belts for the new year."

In corporate news, clothing retailer Primark is now targeting low-single digit sales growth in fiscal 2025 after warmer autumn weather and cautious consumers dented UK revenues in the 16 weeks to January 4.

The company, owned by Associated British Foods, said it continued to expect adjusted operating profit margin to remain broadly in line with last year's level, as gross margins continued to improve and good cost management offset inflation and the step-up in investment.

In the UK, sales declined 4% with like-for-like sales down 6.4%.

Precision instruments supplier Spectris said it expects to beat market expectations with its 2024 results.

In a brief trading update, the company said its fourth-quarter performance was in line with expectations, but strong "operational execution" meant that adjusted operating profit for the year will be above the upper end of analysts' forecasts, which range from £183.3m to £201m, though still down from the £262.5m earned in 2023.

Harbour Energy reported significantly higher revenue of $6.1bn for 2024 in an update, driven by a 40% increase in production following the completion of the Wintershall Dea acquisition, although post-tax income was expected to be impacted by non-cash accounting charges related to changes in the UK fiscal regime.

For 2025, Harbour said it anticipated materially higher production of 450,000 to 475,000 barrels of oil equivalent per day and lower unit operating costs, with estimated free cash flow of $1bn based on current commodity price assumptions.