FTSE 100 Live: Blue-chip index sets new record, Barratt green shoots

 (Evening Standard)
(Evening Standard)

London’s FTSE 100 index has set a fresh record after risk appetite was boosted by strong trading for US markets last night.

The blue-chip index opened 0.7% or 62 points higher at 7926, having hit an intra-day all-time high of 7906 on Friday.

In today’s corporate updates, Barratt Developments reported a 15.9% rise in half-year profits to £521.5 million and said there were some early signs of improvement in trading during January.

FTSE 100 Live Wednesday

  • BP leads FTSE 100 to new record

  • Barratt cheered by January trading

  • Virgin Money unveils sub-4% fixed rate mortgage

Issa brothers’ companies face fines for late accounts

Wednesday 8 February 2023 15:29 , Simon Hunt

Up-to-date accounts have not been filed at more than 20 companies belonging to the sprawling business empire of the billionaire Issa brothers, the Standard has found.

At least 23 businesses controlled by Zuber and Mohsin Issa, including forecourt chain Euro Garages, finance arm EG Finco and Leon Groceries, face fines from Companies House for failing to deliver their accounts by the statutory deadline. All 23 have missed the deadline by more than a month, with many of them more than four months overdue and at least one missing for over a year.

All told, the group of companies is on course to be hit by fines totalling over £20,000 for late filing, the Standard calculates, and the penalties could as much as triple if accounts are not filed within six months, triggering a maximum penalty.

read more here

CMA pours cold water on Microsoft Activision takeover

Wednesday 8 February 2023 12:28 , Simon Hunt

The UK competition regulator has poured cold water on the proposed acquisition of Call of Duty maker Activision by Microsoft, saying the deal could harm UK gamers.

The Competition and Markets Authority warned that restricting the access that other platforms have to Activision’s games could substantially reduce the competition between Xbox and PlayStation in the UK.

The watchdog said the move could alter the future of gaming, potentially harming UK gamers, particularly those who cannot afford or do not want to buy an expensive gaming console or gaming PC.

It follows a 5-month investigation into the deal by the CMA, in which it analysing over 3 million internal documents from the two businesses and commissioned an independent survey of UK gamers.

read more here

M&C Saatchi sets out plans to double profits by 2027

Wednesday 8 February 2023 10:30 , Daniel O'Boyle

PR firm M&C Saatchi has set out goals to more than double its profits by 2027, as it prepares to unveil a new high-margin

The business expects net revenue to reach £400m by 2027, from £271m in 2022.

It expects operating profit, meanwhile, to reach £74m, more than double the £35m anticipated for 2022.

The higher profit margins, M&C Saatchi said, would be due to a greater focus on its higher-margin divisions.

The group will lay out more details of its long-term strategy, which CEO Moray MacLennon says will be based on “targeted investments and a more efficient, streamlined operating model”, at a capital markets day today.

FTSE 100 at record, BP shares up another 3%

Wednesday 8 February 2023 10:18 , Graeme Evans

Oil giant BP drove the FTSE 100 index deeper into record territory today as the bullish mood of markets survived another warning over US rate hikes.

London’s top flight set a new all-time high of 7926 after Wall Street earlier shrugged off a speech by Federal Reserve boss Jerome Powell pointing out that monetary policy will be restrictive for some time.

Markets remain relaxed that US rates are near their peak, with investors relieved that Powell wasn’t more hawkish after the shock of Friday’s blockbuster jobs report.

In London, BP’s record results meant it topped the FTSE 100 for the second day in a row.

Shares jumped 3% or 16p to 532.4p, on top of the 8% increase seen on Tuesday, as Deutsche Bank lifted its target to 591p due to BP’s surprise 10% dividend hike.

Momentum also reflected the latest rise in Brent crude futures to above $84 a barrel, a move driven by a decline in US crude inventories.

The top flight, which later settled 53.23 points higher at 7917.94, was also helped by gains for domestic stocks after the National Institute of Economic and Social Research raised hopes that the UK may avoid recession.

The optimism lifted JD Sports Fashion by 3% or 5.95p to 185.4p, Frasers Group by 18.5p to 803.5p and Next by 134p to 6860p.

On the fallers board, shares in packaging firms halted their strong run following results by Smurfit Kappa.

The Dublin-based firm overcame unprecedented cost inflation to post a 42% rise in profits and increase its dividend by 12%, adding that 2023 has started well. Smurfit’s shares fell 10p to 3478p, DS Smith lost 7.2p to 357.5p and Mondi fell 13.5p to 1542.5p.

The UK optimism also buoyed the FTSE 250 index, which rallied 1.4% or 282.05 points to 20,471.05 after North Sea oil explorer Harbour Energy rose 5% and shopping centre owner Hammerson lifted 2%.

Geffen out of Liontrust

Wednesday 8 February 2023 10:11 , Simon English

CITY veteran Robin Geffen is being squeezed out of Liontrust Asset Management as it moves to shake-up its fund performance.

Geffen founded Neptune in 2002 and sold it to Liontrust in 2019 for £40 million. The Neptune brand disappeared.

Today Liontrust said he will “be leaving in due course”, with the Global Equity Investment Team now reporting to Tom Record.

Liontrust refused to discuss any pay off for Geffen, saying such matters are “confidential”.

Geffen is a keen racing fan and has owned several winning horses, notably GM Hopkins, which won the 2015 Royal Hunt Cup at Royal Ascot.

CEO John Ions said: "We want to thank Robin for his contribution and commitment to managing the funds for investors over the past four years at Liontrust after a long career. “

Geffen has previously run money for Eagle Star and Scottish Equitable.

Ions added: "Global equities are a core asset class for investors and we offer a strong proposition across our investment teams. Tom Record has a long track record, having been an investment manager of international equities since 2004.”

Ashmore bullish despite profit slump

Wednesday 8 February 2023 10:06 , Simon English

PROFITS halved at emerging markets fund giant Ashmore in the last six months, yet chief executive Mark Coombs remains bullish.

The group he founded in 1992 has seen clients pull out funds worth $7.6 billion in the half-year as they fretted about global turbulence and Ashmore’s own performance.

Profit was 54% lower at £54 million. Coombs told investors today that is all just a normal part off the investment cycle and that Ashmore will start to do much better soon.

He said: “The global macro environment in 2022 was complex, but the headwinds it produced are now receding and leading to an increase in investor risk appetite.”

Russia’s invasion of Ukraine and Chinese economic strains has caused jitters.

Ashmore clients are typically large institutions, pension funds and central banks looking to manage complex portfolios.

Ashmore’s own shares have been steady this year, down 0.4p today to 275p which leaves the business valued at just shy of £2 billion.

Barratt home reservation levels pick up

Wednesday 8 February 2023 08:49 , Joanna Bourke

Green shoots appeared in the housing market earlier as Barratt Developments recorded improved reservation levels, but the housebuilding giant cautioned that challenging conditions remain for buyers.

The UK’s largest housebuilder has seen demand hurt as customers grapple with rising mortgage rates and the cost of living crisis. Its forward sales order book stood at 10,854 homes valued at £2.7 billion at the end of January, a slump from the 15,736 and £4.1 billion recorded a year earlier.

But chief executive David Thomas pointed to “some early signs of improvement” in current trading during January.

The company said weekly reservation levels last month were 0.49, which is down 45.6% from a year earlier, but less severe than the 60-65% tumble recorded in the second quarter to December 31.

Read more HERE.

FirstGroup shares up 5% on Essex bus company acquisition

Wednesday 8 February 2023 08:38 , Daniel O'Boyle

Shares in transport giant FirstGroup are up 5% after it agreed to acquire Essex-based bus operator, renter and reseller Ensignbus.

Ensignbus operates regional routes in and near Thurrock, rents out vintage buses for private hire and refurbishes and sells out-of-service buses.

FirstGroup said the refurbishment and resale arm would be particularly significant as its most polluting diesel buses are taken out of service.

“The acquisition of Ensignbus, a long-established, high-performing business, will allow us not only to grow our B2B offering but to also enhance our operational footprint in Essex, and we look forward to welcoming Ensignbus employees to the group,” FirstGroup chief executive Graham Sutherland said.

“This is a strategically and financially accretive growth opportunity for us, and one that is fully aligned to our balanced capital allocation policy.”

FirstGroup shares are currently trading at 114.7p.

Virgin offers sub-4% five-year fix for new purchases

Wednesday 8 February 2023 08:21 , Daniel O'Boyle

Virgin Money has become the first lender to offer a five-year fixed-rate mortgage at below 4% for new purchases since Liz Truss and Kwasi Kwarteng’s mini-budget sent rates skyrocketing.

While HSBC launched a five-year fix at 3.99% yesterday, that deal was only available to those who are remortgaging or switching rates. Virgin’s offer will be the first sub-4% deal that applies to new mortgages since September 2022.

However, like HSBC’s deal, Virgin’s 3.95% rate will require a 40% deposit.

Lodestone Mortgages & Protection director Craig Fish said that while the deal wouldn’t make sense for most buyers, it is an important milestone for the overall state of the market.

“Admittedly these products are still only available to those with a chunk of equity or cash, but it’s all heading in the right direction,” he said.

Samuel Mather-Holgate, independent financial advisor at Mather and Murray Financial, noted that the move must mean banks expect interest rates to come down.

“It’s like the lenders know something the Bank of England doesn’t,” he said.

New record for FTSE 100

Wednesday 8 February 2023 08:18 , Graeme Evans

London’s FTSE 100 index has hit a fresh record, despite last night’s warning from Federal Reserve chair Jerome Powell highlighting the need for more US rate rises.

With Wall Street sentiment largely unmoved by Powell’s speech in Washington, the S&P 500 and other benchmarks finished deep into positive territory last night.

The FTSE 100 index responded by opening more than 0.7% or 62 points higher at 7926 before settling at 7907.

On Friday, the top flight beat the record high set in May 2018 but fell sharply on Monday after a bumper jobs market report in the United States stoked fears over the potential for further interest rate hikes.

JD Sports completes sale of fashion brands

Wednesday 8 February 2023 07:55 , Graeme Evans

JD Sports Fashion has completed the sale of the premium fashion brands Tessuti, Scotts, Choice, Giulio and Cricket to Sports Direct owner Frasers Group.

However, it said Rascal Clothing is no longer part of the transaction disclosed in December after one of the brand’s founders exercised a pre-emption right agreed when JD bought the business in February 2019.

JD and Frasers said the remaining transaction involving Topgrade Sportswear is expected to complete in due course.

New TV campaign helps reverse Imperial Leather revenue decline

Wednesday 8 February 2023 07:42 , Simon Hunt

The first TV campaign for Imperial Leather in seven years has helped revenues soar at its owner, PZ Cussons.

The firm reported sales for the six months to 3 December up 18.8% to £337 million -- but profit margins were squeezed just shy of 2% on the previous year.

In a statement Cussons said: “After a number of years of revenue decline, Imperial Leather was relaunched with its first TV campaign in seven years, reconnecting with the brand’s heritage and appeal to consumers as they seek an everyday indulgence.”

US markets shrug off Fed comments, FTSE 100 seen higher

Wednesday 8 February 2023 07:39 , Graeme Evans

US markets finished in positive territory last night, despite Federal Reserve chair Jerome Powell reiterating that more US rate rises are needed to combat inflation.

Powell also said monetary policy will be at a restricted level for some time, but his comments in Washington about disinflationary trends were taken positively by investors.

The speech was broadly in line with the remarks Powell made after the Federal Reserve increased interest rates by another 0.25% to a range of 4.5% to 4.75% last week. Since then, however, Friday’s bumper jobs report has fuelled expectations of more rate rises.

The S&P 500 index recovered from initial weakness to finish 1.3% higher, while the Nasdaq Composite continued its strong run by adding another 2%.

Wall Street’s performance means the FTSE 100 index is forecast by IG Index to open 0.6% or 48.5 points higher at 7913. The top flight rose 0.4% yesterday, lifted by a strong demand for BP shares after the oil giant record profit and dividend hike.