What to watch: Flutter profits up, Jackson Hole, Rolls-Royce woes, WPP pays out

Here are the top business, market, and economic stories you should be watching today in the UK, Europe, and around the world:

Flutter profits soar from online gaming and poker

Profits at gambling giant Flutter (FLTR.L) jumped 35% in the first half of the year, as soaring interest in online poker and gaming made up for cancelled sports events during lockdowns.

Flutter completed a merger with The Stars Group in May, taking on online poker site PokerStars, Sky Bet and Sky Vegas.

The betting giant, which owns Paddypower and Betfair, saw adjusted pre-tax earnings up by more than a third to £684m ($903.4m). Revenues rose 22% to £2.4bn, posting growth even between March and June as COVID-19 caused enormous disruption.

“Our poker and gaming offerings delivered substantial year-on-year growth, while the continuation of horse racing in both Australia and the US, coupled with a run of bookmaker friendly sports results, benefited our sportsbooks globally,” it said on Thursday.

Rolls-Royce loses £5.4bn in first half of 2020

Engine maker Rolls-Royce (RR.L) fell to a multi-billion pound loss in the first half of the year, the company said on Thursday.

The manufacturing giant made a pre-tax loss of £5.4bn ($7bn) in the six months to the end of June, hit by £1.1bn in write-offs and impairments, a £2.6bn loss on foreign exchange hedging contracts, and restructuring costs of £366m.

Rolls-Royce made an underlying operating loss of £1.7bn, compared to a profit of £203m in 2019. Revenue slumped 24% to £5.5bn.

Alongside results, Rolls-Royce announced its chief finance officer would also be leaving the business. Stephen Daintith is taking up the CFO role at Ocado (OCDO.L).

Shares slumped 6.5% in early trade in London.

Advertising giant WPP restarts dividend even as losses hit £2.5bn

WPP (WPP.L) said on Thursday that it would resume paying its shareholder dividend even as losses hit £2.5bn ($3.2bn) in the first half of its financial year, as the advertising giant concluded that the “toughest” phase of the coronavirus pandemic had now passed.

Losses at the London-listed firm, the world’s largest advertising company, ballooned during the period as it was forced to trim £2.7bn off the valuations of its subsidiaries due to the impact of the pandemic.

Though it is less than half the 22.7p that it paid during the same period last year, WPP’s decision to issue a 10p interim dividend took investors by surprise, since the company had warned that the crisis meant it would have to put shareholder payouts on hold.

“Assuming there is no second wave nor major lockdowns, the second quarter is expected to be the toughest period of the year, although we remain cautious on the speed of recovery,” WPP said on Thursday.

UK car production down by 20% in July

The collapse in global demand for new cars caused by the coronavirus pandemic continued to drag on the UK automotive sector in the month of July, with car production down 20.8% compared to July 2019.

The latest data released by the Society of Motor Manufacturers and Traders (SMMT) shows that 85,686 vehicles were manufactured last month.

While production lines at nearly all of the UK’s car plants were rolling again, severe economic uncertainty surrounding the pandemic and social distancing measures at dealerships put a dampener on demand.

“As key global markets continue to re-open and UK car plants gradually get back to business, these figures are a marked improvement on the previous three months, but the outlook remains deeply uncertain,” said SMMT chief executive Mike Hawes.

European stocks lower ahead of Jackson Hole summit

European stocks opened lower on Thursday, ahead of a major speech by the chair of the US Federal Reserve at a virtual Jackson Hole summit of central bankers.

Asian stocks also closed lower overnight, and US futures were pointing to a lower open after touching new record highs on Wednesday. It comes as chairman Jerome Powell prepares to set out a new strategy for the world’s most important central bank in the wake of the coronavirus crisis later on Thursday.

Powell is expected to give details of a loosening of policy by targeting an average inflation rate of 2% over time rather than a 2% target alone.

London’s FTSE 100 (^FTSE) opened 0.4% lower. The pan-European STOXX 600 index (^STOXX) and Germany’s DAX (^GDAXI) shed 0.2%, while France’s CAC 40 (^FCHI) lost 0.4% in early trading.

In Asia, Shanghai’s SSE Composite Index (^SSEC) gained 0.6% overnight, but the Hang Seng (^HSI) closed 0.9% lower and Japan’s Nikkei (^N225) lost 0.4%.

What to expect in the US

US futures were pointing to further declines on Thursday. Futures on the S&P 500 (ES=F), which had seen a fourth day of record highs on Wednesday, were down 0.2%. Dow Jones Industrial Average futures (YM=F) were down 0.3%. Futures on the Nasdaq (NQ=F) were down 0.2% at around 4am eastern time in the US.