Yahoo Finance FTSE 100 Live 20 February: Barclays plans huge shareholder payouts, IHG profits up, shares lower
Barclays is to return at least £10 billion to shareholders over the next three years as part of plans unveiled by boss C.S. Venkatakrishnan today.
The dividend and buyback pledge came as the banking giant revealed that its profits fell 6% to £6.6 billion last year.
Hotels group IHG has also reported results today, while the focus for US investors will be on the earnings of retailers The Home Depot and Walmart.
FTSE 100 Live Tuesday
Barclays steps up investor returns
China cuts key lending rate
Bailey says summer rate cut bets 'not unreasonable'
Market snapshot: Pound higher
15:41 , Daniel O'Boyle
Take a look at today’s market snapshot with the pound up to $1.266
The Body Shop names central London stores set to shut
15:05 , Daniel O'Boyle
A restructuring plan for the The Body Shop UK has been outlined, with seven stores set to close today and more to follow, with some of the central London branches among the first to go.
The Body Shop appointed administrators for the UK business last week and measures to "secure the future" of the chain in Britain has been announced.
Investors cheer Barclays overhaul but concerns raised over further job losses
14:19 , Daniel O'Boyle
Barclays has delivered a boost to its shareholders, but raised concerns over further job losses after setting out plans to overhaul the bank.
It is aiming to save about £1 billion from making the bank more efficient this year, and targeting about £2 billion worth of savings in total by 2026.
The fresh cost-cutting drive will see Barclays simplify its structure by reorganising divisions and putting less emphasis on its weighty investment bank.
Huge immersive game based on TV's The Cube set to open in Canary Wharf
13:54 , Daniel O'Boyle
An immersive “competitive socialising” venue based on the TV game show The Cube is to open at Canary Wharf later this year.
Groups of four will have to grapple with challenges in 21 perspex cubes spread over four floors at the 23,000 sq ft space.
It will be the second The Cube attraction in the UK following the opening of the original Manchester site in 2022, which has already hosted 150,000 players.
The ITV show hosted by Phillip Schofield ran for 11 series from 2009 and 2021 with prize money that peaked at £1 million.
Probe launched into baby formula milk market amid concerns over high prices
12:58 , Daniel O'Boyle
A new probe into the supply of baby formula milk has been launched by Britain’s competition watchdog after it found that prices had soared by 25% in the past two years.
The Competition and Markets Authority (CMA) said it has begun a market study into formula supply following findings last November of an initial review into the sector.
It said last autumn that the baby formula market was highly concentrated, with just two companies accounting for 85% of sales.
Lloyds Bank creates new account aimed at budding Gen-Z investors
12:42 , Daniel O'Boyle
A new account aimed at Generation Z adults taking their first step into investing has been created by Lloyds Bank.
Invest Wise carries no admin fee for 18 to 25-year-olds and account holders can operate it alongside their everyday banking in the Lloyds Bank app.
From the age of 26, the admin fee is £40 per year.
Superdry shares rise as founder holds talks with US investor
11:59 , Daniel O'Boyle
Shares in Superdry shot higher on Tuesday morning amid reports a US investor is in talks about a deal to buy the troubled fashion chain.
New York investment management firm Davidson Kempner is in discussions with Superdry co-founder and chief Julian Dunkerton over potentially backing a deal to take the brand private, according to Sky News.
It is understood that talks are at a preliminary stage and there is no guarantee of an agreement between the parties.
GSK’s Julie Brown to join drinks giant Diageo’s board
10:59 , Daniel O'Boyle
Guinness and Smirnoff vodka maker Diageo has appointed Julie Brown as a non-executive director with effect from August 5.
On appointment, Brown, who has been chief financial officer and executive director of drugs giant GSK since May last year and prior to that worked at fashion brand Burberry Group as finance chief, will succeed Alan Stewart as chair of the audit committee.
Stewart will retire from the board immediately prior to the drinks giant’s AGM in September.
Bailey: Market bets on Summer rate cuts 'not unreasonable'
10:53 , Daniel O'Boyle
Andrew Bailey said current market expectations, for interest rate cuts to come in June or August, are ‘not unreasonable’.
Bailey said: “We don’t endorse the market curve. And the curve moves around. Sometimes it says the first cut is June, sometimes the first cut is August.
“I think you can tell from that profile, that it’s not unreasonable for markets to think that.”
Bailey pushes back on calls for timed guidance on rate cuts
10:52 , Daniel O'Boyle
Andrew Bailey pushed back on MPs’ calls to publish guidance on when the Bank expects to cut interest rates, resembling the US Federal Reserve’s ‘dot plot’ graphs.
He said: “The Federal Reserve publishes dot plots, but it changes the guidance and the dot plots. The European Central Bank has said it’s too soon to talk about rate cuts
We’ve changed our policy to make clear the question is now ‘for how long would we need to before we start rate cuts?’”
Bailey: Recession was a 'very weak' one
10:43 , Daniel O'Boyle
Andrew Bailey says the UK’s end-of-year recession was a ‘very weak’ one, and suggested that there was too much discussion of the slump given its relatively small size.
Bailey said: “There was a lot of emphasis on recession, and not a lot of emphasis on the fact there is a strong story on the labour market and household income.
“We have a very precise definition of a recession in this country: two successive quarters of negative GDP growth.
“The two successive quarters I think cumulatively add up to minus 0.5%. If you look at recessions going back to the 1970s, this is the weakest one.”
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BoE's Greene: Service sector showing signs of inflation slowdown
10:35 , Daniel O'Boyle
Megan Greene, the newest member of the Monetary Policy Committee, said she changed her vote from hike to hold at the last Bank of England meeting because she saw less signs of inflation persistence in the service sector.
She said: “I think we have learned something about persisitence. When you’re looking at services inflation, different measures of services, they’re all trending down except one, which is the most energy=intensive sector.
“I think we’ve learned enough for me to change my vote, but we know that there’s still risks around wages.
“There’s still expectations of wage growth around 5.4%, that’s higher than we’re forecasting.”
Bailey: Inflation does not need to be at 2% for Bank to start cutting rates
10:31 , Daniel O'Boyle
Bank of England Governor Andrew Bailey says that inflation does not need to be at the 2% target before the Bank cuts interest rates.
The comments helped drive gilt yields lower, with the 10-year yield falling to 4%.
The Governor of the Bank of England is currently speaking before the Treasury Committee.
He added that the UK economy is showing “distinct signs of uptourn” this year, after finishing 2023 in recession.
Mobico shares reverse amid results delay, miners impact FTSE 100
10:30 , Graeme Evans
Mobico shares are down sharply in the FTSE 250 after the National Express business delayed its 29 February results by up to a month so it can finish an accounting review of its recently-expanded German rail business.
It added that the division, which now spans seven routes in North Rhine-Westphalia, has been impacted by industry-wide driver shortages as well as lower energy cost recovery than previously anticipated.
Other businesses, including the UK coach service, have traded in line with expectations as Mobico continues to forecast 2023 underlying earnings of between £175 million and £185 million.
Shares fell 11% or 9.35p to 75p, down 40% in the past year after suspending its dividend in October alongside a downgrade to results guidance.
Elsewhere in the FTSE 250, trading platform Plus500 rose 33p to 1864p after it reported results ahead of City expectations and said it would return $175 million (£139 million) to shareholders through buybacks and dividends.
Domino’s Pizza benefited from a broker upgrade to lift 6% or 20.2p to 367.2p, but the wider FTSE 250 fell 66.92 points to 19,149.98.
Mining stocks weighed on the FTSE 100 Index, which fell 6.69 points to 7721.81 after closing at a year-to-date high last night.
Rio Tinto lost 129p to 5299p, Anglo American fell 41.8p to 1736.2p and Glencore retreated 7.85p to 387.55p ahead of results tomorrow.
Shares in Chile-based copper miner Antofagasta fell 2.5p to 1762.5p after it said that plans for a dividend equivalent to 50% of 2023 earnings showed its confidence in future prospects.
Work starts on new 50-storey South Bank resi tower
09:44 , Joanna Bourke
Construction has started on what will be the tallest new residential tower currently under development in prime central London.
The 50-storey South Bank block, comprising 250 flats, will sit within the large mixed-use Bankside Yards scheme next to Blackfriars station. Work on the latest block is due to complete in late. Read more HERE
Market snapshot: FTSE 100 edges into positive territory
09:18 , Daniel O'Boyle
The FSTE 100 could be in for another 2024-high close, as it edged into positive territory.
Take a look at today’s market snapshot:
Venkatakrishnan "optimistic" on UK
09:11 , Daniel O'Boyle
Barclays has handed £3 billion back to shareholders in the last year via dividends and share buybacks even though profits slipped from £7 billion to £6.6 billion.
The bank has just bought most of Tesco Bank to expand in the UK. Questions about its investment banking arm remain however, with some shareholders thinking it too much of a drain on capital.
The bank said today it aims to return £10 billion to shareholders by 2026 with cost cuts of £2 billion.
CEO C. S. Venkatakrishnan said the investment bank is "focused and competitive and will remain part of the bank, though it should be simpler and slimmed down.”
He is "optimistic" about the strength of the UK economy. There is an impairment charge of £1.9 billion however up from £1.2 billion last time, suggesting that some borrowers are struggling to keep up with loans.
Barclays jumps at top of FTSE 100, Plus500 higher on results cheer
08:29 , Graeme Evans
Shares in Barclays have jumped 6%, up 8.4p to 157.4p after the banking group’s results included a pledge to return £10 billion to shareholders up to 2026.
Among other blue-chip companies reporting today, Holiday Inn business IHG was 18p higher at 7928p and Antofagasta fell 25.5p to 1739.5p during a weaker session for the mining sector.
The FTSE 100 index was 10.60 points lower at 7717.90, while the FTSE 250 index fell 59.43 points to 19,157.47.
National Express owner Mobico slumped 17% or 14.6p to 69.75p at one point after it said its results will be delayed by an accounting review of its German rail business. The stock later recovered to stand 5% lower.
Trading platform Plus500 moved the other way, rising 3% or 57p to 1888p after posting robust annual results.
US credit card giants in $35 billion merger
08:02 , Daniel O'Boyle
US bank Capital One is to buy credit card giant Discover Financial to create the country’s biggest credit card company.
In the most valuable merger of 2024 so far, Capital One will pay $35 billion in stock for Discover, to create a business worth almost $90 billion.
Capital one boss Richard Fairbank said: “Our acquisition of Discover is a singular opportunity to bring together two very successful companies with complementary capabilities and franchises, and to build a payments network that can compete with the largest payments networks and payments companies.”
Plus500 results “significantly ahead of market expectations”
07:56 , Daniel O'Boyle
Stock trading app Plus500 appeared to weather the retail market slowdown last year, as it reported results “significantly ahead of market expectations”.
Profits before tax were down to $336.2 million, but much of the decline came in the first half of the year against more difficult comparatives. Profits rose in the second half.
Other trading businesses like CMC Markets and IG Group have taken much bigger hits.
The business announced a $100 million buyback and $75 million in dividends.
Plus500 bosses have previously suggested they are looking at listing the business in the US.
Boss David Zruia said: “During the period, we achieved a record high average deposit per active customer reflecting our on-going focus on higher value customers and the intuitive nature and reliability of our market-leading technology.”
Former Burberry finance chief Julie Brown to join Diageo board
07:54 , Joanna Bourke
Guinness and Smirnoff vodka maker Diageo has appointed Julie Brown as a non-executive director with effect from August 5.
On appointment, Brown, who has been CFO of GSK since May last year and prior to that worked at fashion brand Burberry Group, will succeed Alan Stewart as chair of the audit committee.
Stewart will retire from the board immediately prior to Diageo’s AGM in September.
The incoming NED has also previously worked at Smith & Nephew and AstraZeneca.
Lok'nStore makes progress on new self storage store pipeline
07:42 , Joanna Bourke
AIM-listed self storage company Lok'nStore has said it is delivering on its strategy of opening more new sites in the under supplied market.
The firm, which reported that self-storage revenue rose 4.9% and price per square foot gained 4% in the six months to January 31, operated at over 43 locations as at December.
Today it said recent new sites include in Basildon, Kettering, and upcoming ones are in Staines and Bromborough. It has also received formal planning permission for a new store in Barking.
IHG sees big profit growth as it announces huge buyback
07:28 , Daniel O'Boyle
Hotels giant IHG is targeting revenue and margin growth over the next five years, as it announced an $800 million buyback today.
The owner of the InterContinental, Kimpton and Holiday Inn brands announced the buyback as profits rose to $1.01 billion. That was partly driven by the continued rebound in travel demand, especially in Asia where the post-pandemic recovery had previously been lagging, but an improvement in margins also helped.
IHG says it thinks revenue could rise by a “mid-to-high single-digit” percentage annually in the medium-to-long term, and margins will continue to get better by about 1-1.5 percentage points a year, which would suggest profits growing by about 60% to $1.6 billion within five years.
Today’s buyback, meanwhile, means the business has now returned $1 billion to shareholders this year.
CEO Elie Maalouf, who took over last year, said: "I was honoured to take over as IHG's group CEO in July and would like to thank our teams for delivering an excellent set of results. Travel demand was strong across all markets, with RevPAR up 16% on last year and 11% ahead of the 2019 pre-pandemic peak.
“As we look ahead, our evolved strategic priorities and clear plans will further reinforce IHG Hotels & Resorts as the hotel company of choice for guests and owners. The travel industry has attractive, long-term drivers of demand, and the strength of our brand portfolio and enterprise platform will continue to boost our RevPAR and system size growth. Combined with our scale and cost base efficiencies, this will further expand fee margin.
“IHG's strong cash generation supports investment in growth initiatives, sustainably increasing our ordinary dividend and the regular return of surplus capital such as through buybacks. We look forward to an important next chapter of growth for IHG that creates long-term sustainable value for our shareholders and benefits our employees, hotel owners and communities."
FTSE 100 steady as China cuts key lending rate, US retail giants in focus
07:17 , Graeme Evans
China’s efforts to stimulate its economy continued today when the country’s central bank cut a key lending rate by more than expected.
The five-year loan prime rate, which is used as a reference in mortgage pricing, was cut by a quarter percentage point to 3.95%.
However, there was disappointment that the one-year rate used in pricing corporate loans was unchanged at 3.45%.
Stock markets in Hong Kong and mainland China recovered from an earlier dip to stand slightly higher, led by a rise of 0.4% for the Shanghai Composite.
The FTSE 100 index closed at its highest level of the year last night and is set for a steady session today after IG Index forecast a decline of just seven points to 7720.
US markets were closed yesterday for a public holiday, with the main interest of today’s session likely to be the earnings of retail giants Home Depot and Walmart before the opening bell.
Barclays 2023 profit falls 6% to £6.6 billion, launches new £1 billion share buyback
07:14 , Michael Hunter
Barclays kicked off a busy week of earnings news from UK banks this week with a 6% fall in annual profit for 2023 of £6.6 billion.
The high street lender’s total income for the year rose 2% to £25.4 billion.
Bad loans rose to £1.9 billion from £1.2 billion, with the credit impairment charge for the UK steady at £0.3 billion.
There was also a payday for shareholders, with total returns to investors of £3 billion in the year, up 37%.
It also announced a fresh £1 billion share buyback ahead of full details later of a new three-year plan to overhaul the business, designed to cut costs.
C. S. Venkatakrishnan, chief executive, said: “Our new three-year plan, which we will be announcing at the Investor Update today, is designed to further improve Barclays' operational and financial performance, driving higher returns, and predictable, attractive shareholder distributions".
Recap: Yesterday's top stories
06:56 , Daniel O'Boyle
Good morning from the Evening Standard’s City desk.
It is a starkly contrasting tale of two city property surveys this morning. So is it the best of times, or the worst of times, for London’s property market?
According to agents Benham and Reeves, which have picked the bones of the latest Land Registry data, prices fell 5.7% in the capital last year, more than any other region in the land, and painfully more than the 1% average across the UK as a whole.
But the picture could not be more different this month, according to the latest data on asking prices from Rightmove. It sees a 2.8% monthly increase in January, suggesting that the bounce back in London is stronger than virtually anywhere else in the UK.
It is no great surprise that London is more geared to changes in mortgage rates than anywhere else in the country.
Buyers have to raise colossal sums to get on the property ladder so when rates go up, as they did dramatically in the year from the summer of 2022, the market is disproportionately hit. But over the past three months lenders have been falling over themselves to cut rates, easing the pressure on London first time buyers who have to stump up an average of almost a third of a million pounds.
If the anecdotal stories from estate agents are to be believed this could turn out to be a spectacularly busy spring buying season.
There are still some headwinds — thousands of existing mortgage holders on fixed deals have yet to be exposed to the pain of remortgaging.
But by the summer the bulk of those deals will have been done, certainly all the old two-year fixes on legacy rates dating back to the era of virtually free money.
How long this resurgence in demand lasts and whether it will flow through to a sustained bounce in actual sale prices later in 2024 remains to be seen.
Here are the rest of yesterday’s top stories:
US investment group Elliot confirms considering making an £800 million offer for Currys opening up a possible buidding war for high street chain
Hipgnosis legal row could reach the High Court
Southend Airport owner mulls deal to lose majority stake in Essex hub
UK’s largest nightclub operator reportedly Rekom bought out of administration
Moneysupermarket.com profits rise amid greater insurance switching
