FTSE 100 Live: London shares finish week ahead after late climb, pound below $1.25

 (Evening Standard)
(Evening Standard)

London’s top flight is down today despite starting ahead, with GSK among the risers while yesterday’s top winner Melrose leads today’s fallers board.

That means the index appears set to close the week slightly ahead.

Lndon is also set to lose another listed company, with music rights fund Round Hill to be boguht by a US firm.

Elsewhere, London housebuilder Berkeley maintained its guidance despite the impact of interest rate rises, while a Deutsche Bank note hit Diageo shares.

FTSE 100 Live Friday

  • Berkeley resilient, calls for clarity on regulations

  • Music rights investor Round Hill in $469m buyout

  • Computacenter shares surge on results

FTSE closes at 7,478.19

16:40 , Simon Hunt

The FTSE 100 ended the week at 7,478.19, slightly ahead of where it started on Monday, after rising by 0.5%.

GSK, Entain and JD Sports were among the top risers, while Melrose and Smurfit Kappa were big fallers.

The index was down more than 35 points in the morning, before gaining more than 70 before the close.

Union chasing possible buyers for Wilko warehouses in bid to re-employ staff

15:59 , Daniel O'Boyle

A union representing thousands of Wilko staff has said there has been “some interest” from potential buyers to snap up the collapsed retailer’s warehouses.

About 1,300 people were thought to be employed at the warehouses, but hundreds of redundancies have already been announced.

The GMB Union, which has about 3,000 members who worked for the former retailer, said it was hoping a deal might mean staff can be re-employed.

Read more here

Stocks make gains on Wall Street

15:02 , Simon Hunt

Stocks have made gains in the opening minutes of trade on Wall Street.

Here’s a look at your key markets data:

Deutsche Bank backs beer, but not spirits

14:14 , Graeme Evans

“Get the beers in but stay off the spirits” was the pre-weekend message for investors today after a City firm revealed its favoured drinks companies.

Deutsche Bank believes brewers and soft drinks firms such as London-listed Britvic offer an attractive combination of resilient demand and cost tailwinds.

However, it warns that Diageo, Pernod Ricard and others in the spirits sector are exposed to greater cyclical risk, an inventory overhang and less input cost benefit.

The bank said: “After two years of material input cost headwinds we expect 2024 to be a year of input cost deflation and see this as a significant tailwind for brewers and soft drinks players if pricing holds — as it has in the past.” The bank has a “buy” recommendation on Carlsberg and has sweetened its price target on Britvic but Diageo is still rated at “sell”. The Guinness and Smirnoff maker today fell 6.5p to 3168.5p as the FTSE 100 index rounded off a lacklustre week down 30.19 points at 7411.53.

Fallers included Melrose Industries as the GKN Aerospace owner reversed the bounce from yesterday’s profits upgrade with a decline of 5% or 27.1p to 509.8p.

Retail was one of the few sectors in demand after JD Sports Fashion and Next were boosted by broker upgrades.

The sportswear chain took top spot in the FTSE 100, improving 3.55p to 137.8p as analysts at Berenberg nudged up their price target by 15p to 225p.

For high street fashion business Next, the sight of SocGen’s much-i-improved estimate of 8239p helped shares to rally 78p to 7070p.

The retailers were joined  on the way up by specialist insurers Hiscox and Beazley with gains of 1%.

Investors also had an eye on energy stocks after the Government announced funding for a significant number of solar power and onshore wind projects but said that its auction resulted in no bids for offshore wind farms.

The lack of interest followed warnings that such projects were not viable because the maximum price operators are allowed to charge failed to take into account soaring costs.

Shares in renewables giant SSE fell 4p to 1613.5p but British Gas owner Centrica lifted 0.3p to 159.6p.

Disappointment as Chiltern Railways scraps hybrid train plans

14:07 , Daniel O'Boyle

Chiltern Railways has quietly scrapped its plans to introduce hybrid trains from services in London after reports of “unacceptably poor” air quality in the area surrounding its Marylebone terminus, the Standard can reveal.

The Arriva-owned operator last year introduced trial rolling stock which used batteries in combination with a diesel engine in a bid to reduce emissions in city centres. But it has since abandoned the project with the train no longer in service at present. The firm said increased costs meant the project was no longer viable.

Liz Leffman, leader of Oxfordshire County Council, who had previously written to the Government citing health concerns over pollution caused by Chiltern’s diesel fleet, told the Standard she was “very disappointed” by the move.

Read more here

Costa Coffee recalls sandwiches and wraps amid fears they contain ‘small stones’

13:10 , Daniel O'Boyle

Costa Coffee is recalling a number of sandwiches and wraps from its shops over fears they could contain stones.

The coffee shop chain warned customers over four of its lunch products in a Food Standards Agency announcement.

The agency said that the items were being pulled from stores “because they may contain small stones”.

It added: “This may present a choking hazard and are unsafe to eat.”

The company said it is taking the issue “extremely seriously” and apologised to customers.

Read more here

FTSE 100 down slightly: lunchtime update

13:10 , Simon Hunt

Midway through the day’s trading session in London, the FTSE 100 is down slightly but the pound is up against the dollar. Here’s a look at your key markets data:

Average home insurance quote has jumped by 25.7% annually, say experts

12:57 , Daniel O'Boyle

The average quoted price of home insurance has surged by around a quarter (25.7%) annually, according to an index.

Data analytics firm Consumer Intelligence, which compiled the report, said this is the biggest jump it has seen in records going back to 2014.

The average premium quoted for a buildings and contents policy was £212 in July, it found, up from £168 in July 2022. The figures have been rounded off.

Read more here

Founder of Jack Ma-backed fintech WorldFirst hits back over risk management questions after board exodus

12:01 , Daniel O'Boyle

The founder of Jack Ma-owned London fintech WorldFirst has hit back at reports of a board exodus at the company after a whistleblower told the Standard he had raised questions over risk governance policies by its Chinese management.

Last year, as part of an internal overhaul dubbed the ‘Global Base Line’ project, a string of management, risk, and oversight functions at the firm were shifted from the UK to China.

A host of senior UK leaders have since left the firm, including its CEO, finance director, managing director, head of risk, chief information security officer, and group general counsel and compliance officer. Staff at the fintech’s parent company, Ant Financial, are among those brought in to replace them.

Founder Jonathan Quin is understood to have questioned the project at meetings of the firm’s risk committee.

Read more here

Crank up Van Halen, and jump

11:08 , Simon English

The stock market is moribund. There’s no flotation action.

The leveraged debt market is dead, moaned a banker the other day (I can sense your tears welling up).

As my colleague Jonathan Prynn said yesterday, this is hardly a golden age for the City. But it still could be.

At the small and medium end of the market the lack of activity is a serious problem. It’s not just that not much is happening, is that not much looks like happening. Job cuts, a veritable bonfire of the bankers, looms. It could be brutal.

At the top end, things are different.

Investment bankers at the big league firms are quietly getting optimistic, without wishing to say so publicly.

Clients are gearing up to do things — to float, to raise cash, to launch takeover bids.

What those clients need is a bit more clarity. Certainty of vision on interest rates. Clearer signs that inflation is whipped or at least tamed. A sense that the Government has at least some idea what it is doing.

Crucially, they need the US economy not to run too hot, lest the Federal Reserve raise interest rates again and again, forcing the European Central Bank and the Bank of England to ponder the same.

(It seems counter-intuitive that we should wish America to slow down, but it’s a runaway train passing through a slow station at the moment.)

What we need is someone to do what the City does — take a risk. Someone has to go first, to crank up the Van Halen and decide they might as well jump.

Once that first bet is placed, things might move quite quickly. Fees will trickle down to the lower leagues, bosses will hold off on job losses.

It may not go that way of course. But there is a growing sense that it might.

Plaudits to the people who figure that present conditions aren’t the worst that they’ve seen and do just that.

Battle over bonuses and salaries leads to TRG chairman’s exit

10:45 , Daniel O'Boyle

The chairman of The Restaurant Group announced his departure today, after a long period of pressure on the owner of Wagamama’s, not least over executive pay.

Ken Hanna said he would leave the job at The Restaurant Group, paying around £230,000 a year, “for personal reasons”.

He goes after a battle with activist investors, who hit out at salaries and bonuses at the loss-making firm. About 23% of investors were opposed to his reappointment at TRG’s last shareholder meeting in May.

Its pay plans were only narrowly approved, including a compensation package worth £792,000 for CEO Andy Hornby, the former leader of failed bank HBOS.

Wagamama’s takeaway sales fell by 8% in the six months to the start of July (Victoria Jones/PA) (PA Archive)
Wagamama’s takeaway sales fell by 8% in the six months to the start of July (Victoria Jones/PA) (PA Archive)

Computacenter shares surge as it sells down pandemic inventory

09:54 , Daniel O'Boyle

Shares in IT firm Computacenter surged today as the return of “normal supply conditions” allowed it to sell much of the inventory it had built up during the pandemic.

Profit grew by 13.9% to £122.8 million in the first half after a jump in revenue from sourcing tech for offices.

CEO Mike Norris said: “Due to the industry returning to normal supply conditions we have seen a significant generation of cash as our inventory has reduced in the first half of 2023.

“We expect this to continue in the second half which will leave Computacenter with a strong balance sheet by the end of the year.”

Shares are up 6.7% to 2,300p, valuing the firm at £2.82 billion.

Fintech Zopa borrows £75m as it sets sights on profit

09:32 , Daniel O'Boyle

London fintech Zopa has borrowed £75 million from a group of existing investors as it aims to turn its first profit in 2023, its 19th year of operation.

The London Bridge firm, which was founded in 2005 as a peer-to-peer lending business but now focuses on digital banking, says it is currently profitable, and expects to make a full-year profit this year after surpassing one million customers.

A Zopa spokesperson said opting for debt instead of equity funding allowed Zopa to expand “without diluting the equity position of its shareholders”.

Last month, the Standard revealed Zopa had returned to the peer-to-peer lending market, 18 months after selling off that arm amid a crackdown on the sector.

Berkeley angered by lack of regulatory clarity

09:19 , Graeme Evans

Berkeley shares held firm today after the South East-focused developer stuck to guidance for profits of at least £1.05 billion across the current and next financial years.

It told investors ahead of the company’s AGM that enquiries have stayed at similar levels over the last four months, but the value of underlying private sales reservations is some 35% below last year's rate.

Berkeley used the update to criticise the lack of clarity around regulatory changes in the UK, which it said had deterred investment in brownfield regeneration and across the housebuilding sector.

It added: "Consequently, Berkeley has not acquired any land in the period and will only invest very selectively in new opportunities."

Shares were 1p lower at 3971p.

Next lifted by City upgrade, Computacenter jumps 7%

08:51 , Graeme Evans

Shares in Next and JD Sports Fashion led the FTSE 100 index today after benefiting from positive City comment.

Next rose 120p to 7112p after SocGen analysts lifted their price target to 8239p from 7034p, while JD Sports Fashion also jumped 3.85p to 138.1p.

The wider FTSE 100 index rose 6.24 points to 7447.96, while the FTSE 250 index added 52.67 points at 18,436.52.

IT services firm Computacenter surged 7% or 156p to 2312p after interim results showed the company on track for a 19th consecutive year of earnings growth. Chief executive Mike Norris added: “We are as excited and optimistic about the future as we have ever been.”

Market snapshot as FTSE edges up

08:43 , Daniel O'Boyle

The FTSE 100 is very slightly higher this morning, while the pound remains below $1.25.

Take a look at all of our market data.

Music Rights investor Round Hill in $469m buyout

07:55 , Daniel O'Boyle

Music rights investor Round Hill, which owns songs by artists from Louis Armstrong to Whitesnake, is the latest listed company set to be taken off the London Stock exchange, as its board backs $468.8m takeover offer from private equity firm Concord.

Shareholders will receive $1.15 per share, a premium of almost 70% compared to Round Hill’s share price yesterday.

Artists in the Round Hill portfolio include  Alice In Chains, Bonnie Tyler, Bush, Bruno Mars, Céline Dion, Lady A, Louis Armstrong, The Offspring, Carrie Underwood, The Supremes, Wilson Pickett and Whitesnake.

 (Bettmann Archive)
(Bettmann Archive)

Robert Naylor, chairman of Round Hill, said: “The board is pleased to present this opportunity for liquidity at a premium to both the share price and the IPO price, as well as at a narrow discount to economic net asset value per share.

“The recommended offer represents excellent value for shareholders.”

Bob Valentine, CEO of Concord said: “Since its IPO, RHM has built an impressive portfolio of music rights which generate revenue across a variety of income streams and have demonstrated their ability to stand the test of time.”

Apple shares fall, Nikkei falls after Japan downgrade

07:21 , Graeme Evans

Stock markets continue to be driven by US interest rate speculation after yesterday’s better-than-expected weekly jobless claim figure of 216,000 added to the chances of a November hike.

The latest signs of strength in the US economy following a robust services sector report on Wednesday led to a cautious session on Wall Street.

The S&P 500 index dropped 0.3% and the Nasdaq Composite by 0.9%, with Apple shares were down another 3% on reports that China has banned government officials from using iPhones.

In Asia, the Nikkei 225 stood more than 1% lower after a downward revision to Japan’s second quarter growth figure from 1.5% to 1.2%.

CMC Markets expects the FTSE 100 index to end a disappointing week by opening seven points lower at 7434.

Chief market analyst Michael Hewson said: “The overall mood amongst investors does appear to be becoming gloomier, however despite recent price moves we’re still within the price ranges we’ve been in over the past six months.

“With some key central bank meetings looming in the next two weeks we might find the catalyst that breaks us out of these choppy ranges.”

Recap: Yesterday’s top stories

Thursday 7 September 2023 19:51 , Simon Hunt

Good morning. Here’s a summary of our top headlines from yesterday: