Yahoo Finance FTSE 100 Live: New boss at BT, Pearson results, UK mortgage approvals, shares flat
BT Group today named Allison Kirkby as chief executive when current incumbent Philip Jansen steps down by early next year.
She has been president and chief executive of Telia Company since 2020 and already serves on the BT board as a non-executive director.
Coursework publisher Pearson has also posted results in a session when the FTSE 100 index is set for a downbeat start to the week.
FTSE 100 Live Monday
BT hires insider Allison Kirkby as CEO
North Sea plans boost energy stocks
Pearson boss backs AI potential
FTSE 100 closes at 7,699.41
16:37 , Daniel O'Boyle
The FTSE 100 closed at 7,699.41 today, up slightly despite starting the day lower.
Shares got off to a poor start but picked up on the back of stronger-than-expected EU GDP figures.
British AIrways owner IAG continued to climb, as the top riser today. Shares are now up 14.2% in the past four days.
Ocado returned to the fallers board, losing 3.8%, but that still leaves it up more than 50% in the past month and 170% in the last two months.
Man behind the miniliths has plans for a more Legible world
16:32 , Daniel O'Boyle
Most entrepreneurs worry about rivals nicking their ideas. Many employ lawyers to keep competitors at bay. Not Tim Fendley. The creator of the 1500 yellow and black wayfaring signs throughout London says “we will share how it’s done with anyone who asks. If you want to know, call us now.”
The main aim of Applied Information Group, the firm Fendley founded in 2003, “is to help cities be more sustainable, healthier, more vibrant. We think this is an idea worth sharing,” he adds. “We want every other city to benefit from the structure and system of Legible London. There are many copies around the world now. All the manuals and methods are published.”
The capital’s system — clear maps with landmarks, streets, and circles indicating five-minute and 15-minute walk distances — was conceived in 2004. Transport for London had put out a small tender for a study to look at walking signs. “We responded with a big idea for one, predictable system for the whole of London, that allows everyone to implement in a consistent way.”
Deadline nears for final CMA decision on blockbuster Microsoft-Activision merger
13:42 , Simon Hunt
A deadline for the end of August has been set by UK competition regulator for its final decision over the blockbuster Microsoft-Activision merger.
Microsoft’s bid to acquire the Call of Duty maker has been approved in most major jurisdictions including the EU, leaving the UK’s Competition and Markets Authority out on its own over its decision to provisionally block the deal.
The CMA today published Microsoft’s arguments explaining why the deal should be re-evaluated. It is calling for comments over Microsoft’s plans by the end of this week with a final decision to be made by August 29.
Microsoft argues that its commitment to working with rivals Sony and NVIDIA should ease competition concerns.
Consumers to see ‘biggest single alcohol duty increase in almost 50 years’
13:18
Drinkers face significant price hikes from Tuesday when tax increases will see the duty on a bottle of wine rise by as much as 20%.
First set out by then chancellor Rishi Sunak in 2021, the new system aims to encourage consumers to cut back by taxing all alcohol based on its strength, rather than the previous categories of wine, beer, spirits, and ciders.
Mr Sunak described the overhaul as “the most radical simplification of alcohol duties for over 140 years”, enabled by Britain’s exit from the EU.
Market snapshot with shares flat
12:57 , Daniel O'Boyle
Take a look at the latest market snapshot
WANdisco asks for money back from former execs
12:33 , Simon Hunt
WANdisco has asked its former execs to hand repay over half a million pounds in bonuses after the value of the troubled tech firm collapsed.
The Sheffield-based software business has written to former chief executive David Richards and former finance chief Erik Miller demanding that they give back £647,000 that was handed to them prior to the discovery of fraud by a sales employee.
A WANdisco spokesperson said: “In line with shareholder sentiment, and as simply the right thing to do, the Board of WANdisco confirms that it has written to former executives of the Company requesting that bonuses paid for FY 2022 are returned.
“It is clear that the bonuses paid are significantly at odds with the realities the company has faced.”
Pearson eyes AI revenue growth but concedes it imports its own tools from ChatGPT
12:19 , Simon Hunt
The boss of Pearson has touted the explosion in AI development as a huge earner for the education giant, but it today conceded that much of its existing technology was imported from ChatGPT.
Chief product officer Tony Prentice said the firm’s ‘Pearson+’ software, which uses a chatbot to summarise lessons and create revision questions for students, is based on the Microsoft-owned tool and is operated by Microsoft servers.
“We do have our own machine learning team but…we’re actually using ChatGPT behind the scenes,” he said.
Action plan to ensure savers are offered fair value drawn up by regulator
11:24 , Daniel O'Boyle
A 14-point action plan to make sure banks and building societies are passing on interest rate rises appropriately to savers has been set out by the City regulator.
Firms offering the lowest savings rates will be required to justify by the end of August how those rates offer fair value – and the Financial Conduct Authority (FCA) said it will take action if they are unable to do so.
The regulator wants to make sure savings providers are passing on rate increases and that they are communicating with customers much more effectively and offering them better deals.
North Sea plans lift Ithaca and Harbour Energy, FTSE 100 flat
10:22 , Graeme Evans
North Sea-focused oil and gas stocks rallied today as investors welcomed Rishi Sunak’s plans for hundreds of new production licences.
Beneficiaries included FTSE 250-listed Ithaca Energy, which has stakes in six of the ten largest fields in the UK North Sea and two of largest three prospective developments.
Its shares jumped 6% or 9.45p to 173.85p, their highest level since March, as the prime minister pledged to make the UK more energy independent through hundreds more oil and gas licensing rounds.
Harbour Energy, which last year delivered about 15% of the UK's domestic gas supplies, improved 9p to 261.8p as the Government confirmed support for its Humber-based Viking carbon capture storage project being developed with BP.
The FTSE 250 company recently said that some investment opportunities were on hold or no longer being progressed after 2022 profits were hit by the UK windfall tax.
Among the minnows, Jersey Oil & Gas jumped 12% or 20.9p to 199.9p as it holds a significant position within the Central North Sea including the Buchan oil field.
Investor interest in the sector has also been lifted by the rebound in oil price, with Brent Crude today above $84 a barrel after its strongest month since January 2022.
An improved demand outlook and supply cuts by major producers Saudi Arabia and Russia have sent the price up 17% since the last week of June.
Blue-chip risers from the energy sector included Centrica after a gain of 2.75p to 136.95p but the FTSE 100 index overall stood 13.71 points lower at 7680.56.
In the FTSE 250 index, Dr Martens jumped 5% or 7.1p to 143.2p after Sky News reported that activist investor Sparta Capital had built a top ten stake following this year’s sharp fall in the footwear company’s valuation.
On AIM, shares in Harland & Wolff rose 1.1p to 12.5p after the company received a letter of intent for a major vessel refurbishment project at its Belfast dry dock with a potential contract value of up £70 million.
Market snapshot with FTSE 100 down slightly
09:37 , Daniel O'Boyle
Take a look at today’s market snapshot as the FTSE 100 recovered some of its early losses but is still slightly down for the day.
Mortgage mayhem could be easing as rates hold steady
09:30 , Daniel O'Boyle
Mortgage rates appear to be stabilising, albeit at levels not seen for 15 years for some products, as new data from Moneyfacts today showed no change in average rates.
The average two-year fixed-rate deal remained at 6.81%, while the average five-year deal was unchanged at 6.34%. Buy-to-let mortgage rates were also unchanged.
But as most homeowners are still on fixed deals agreed at much lower rates, much of the impact of the recent wave of price rises has not yet been felt.
That may be a sign that markets are settling following months of increases. Lower-than-expected inflation data in June finally put an end to the daily rise in prices, but homeowners will still fear that they could rise again if July inflation is higher than feared.
The Bank of England is set to raise its interest rates for the 14th consecutive meeting on Thursday, though the impact of this hike should be mostly priced into new mortgage rates already.
Italy’s economy surprisingly shrinks
09:25 , Daniel O'Boyle
Italy’s economy surprisingly shrank in Q2, sparking fears of a recession in the world’s eighth largest economy.
GDP was down by 0.3%, worse than economists’ expectations of stagnation, with much of the decline due to domestic demand falling.
Italy appears to be experiencing the worst of both worlds as the European Central Bank hikes interest rates to bring inflation down. At the same time as its economy is shrinking, its inflation rate remains above the Eurozone average at 6.4%.
BT dials up new staff
09:21 , Simon English
BT moved quickly today to replace the departing CEO Philip Jansen, hiring company insider Allison Kirkby to take on one of the most demanding jobs in corporate Britain.
Kirby is the boss of Sweden’s Telia company and has been on the board of BT since 2019.
She will be paid a basic salary of £1.1 million, a bonus of up to twice that, and other share awards that will make her total pay among the most lucrative in the FTSE 100.
Running BT is unlike almost any other top business job, since the success of the business has such an impact on the whole UK economy.
Jansen has worked, in his words, to “build like fury”, laying out the ultra-fast fibre optic cable network that should ensure the UK has one of the best internet networks in Europe.
Completing this task is hugely expensive and disruptive, with shareholders questioning whether they will ever get a return on the investment and politicians regarding its success as vital.
The switch to AI means BT plans to cut up to 50,000 of its 130,000 workforce by 2030. Kirkby will be one of only nine female leaders of FTSE 100 companies,
Jansen, a cricket lover who arrived at BT as CEO in February 2019, earnt about £50 million from the sale of Worldpay in 2015.
He had to handle tough strikes with BT staff, some of whom branded him “Foodbank Phil” given the disparity between his wealth and their pay, as they saw it.
He caught coronavirus in March 2020 but seemed to recover quickly.
He will stay as CEO until the end of January, will offer support after that, but then says he intends to quit executive life.
While regarded as a highly effective CEO, the BT share price has been stubborn. It is down 47% over five years. Today it was steady at 123p, which values the business at £12 billion.
Kirkby has been CEO of Telia, based in Sweden, since 2020 after roles at Virgin Media, Procter & Gamble and Guinness.
Chairman Adam Crozier said: “She is a proven leader, with deep sector experience and a history of having transformed businesses. I look forward to supporting her as we drive our long-term strategy to transform BT Group, ensuring it delivers for all our stakeholders.”
Kirkby said: “BT is such an important company for the UK, and our many customers both in the UK and internationally and is uniquely placed to help everyone benefit from the rapid advances in digitalisation. Our products and services have never been more important to how our customers live and work, and thanks to the significant investment BT is putting into digital infrastructure and in the modernisation of its services.”
Some shareholders had already complained that she holds too many non-executive roles to give enough attention to BT.
Pearson says AI will be a big money-maker
09:19 , Simon Hunt
The boss of Pearson has touted the explosion in AI development as a huge earner for the education giant.
Andy Pearson said several artificial intelligence businesses had already expressed interest in using Pearson’s educational content to train their large language models. But he had so far rejected their offers.
He said: “We have been approached by many large language model companies to license our content and to date we have not signed any deals because we believe that over time the value of our datasets and IP is only going to increase.”
Bird said Pearson had made strides in the development of its in-house AI technology, but warned of the difficulties of bringing new products to market – including the appearance of hallucinations, an industry term describing AI’s tendency to make up plausible-sounding facts.
“Generative AI is a phenomenal creation but it does come with a health warning around hallucinations…the challenges of maintaining accuracy and doing this well is really really hard,” he said.
Pre-tax profits for the first half of the year came in above City expectations, rising 28% tp £236 million, led by a more than doubling of members of its online ‘Pearson+’ subscription service to 938,000. But Bird said full-year guidance wouldn’t be revised up “to maintain a level of flexibility.”
Higher prices turn drinkers off Heineken
09:04 , Daniel O'Boyle
Heineken’s profits fell in the first half of the year as drinkers were put off by higher prices.
Profits fell by 8.6% to €1.16 billion, which the brewing giant said was because it was among the first to hike its prices. On average, its prices were up by 11.8%, with the most significant increases in Europe where inflation is highest.
“This year, we front-loaded significant price increases, often leading the market, to offset unprecedented levels of commodity and energy inflation, which impacted consumer off-take,” it said.
The brewing giant sold 12 billion litres of beer in the first six months, 5.6% less than a year earlier, but still enough to cover the City of London to a depth of 15 feet.
Shares are down 5% to €92.00.
Oil stocks higher but FTSE 100 under pressure
08:56 , Graeme Evans
London shares have made a subdued start to the week, with the FTSE 100 index down 13.73 points to 7680.54 and the FTSE 250 index off 22.46 points to 19,101.68.
Oil and gas stocks were among those on the front foot after prime minister Rishi Sunak pledged a wave of new North Sea licences in order to secure future UK energy reserves.
Shares in Harbour Energy and Ithaca Energy both rose 2% in the FTSE 250 index.
Among top flight stocks, BT shares fell 1.2p to 122.95p following the appointment of Allison Kirkby as chief executive. Education publisher Pearson initially rallied 3% on the back of half-year results before shares later retreated towards their opening mark.
AIM-listed Harland & Wolff jumped 8% or 0.9p to 12.3p after announcing it had received a letter of intent for a major vessel refurbishment project at its Belfast dry dock with a potential contract value of up £70 million.
Capita names Amazon’s Adolfo Hernandez as new CEO
08:05 , Michael Hunter
Outsourcing group Capita has named Adolfo Hernandez as its new chief executive, who will replace Jon Lewis.
Lewis will step down toward the end of the year and will stay on at the company until July next year to ensure a smooth transition. He delayed his retirement last year after Capita was hit by a cyber attack.
Hernandez will join Capita from Amazon Web Services, where he is currently vice president, global telecommunications.
Capita administers a range of essential services for a range of institutions including the NHS and the military, as well as the Congestion Charge and the Ultra Low Emission Zone in London.
Lewis said: “It has been a privilege to lead the turnaround of Capita over the past five years. I remain fully committed to delivering the Group’s strategy and enabling a smooth transition to Adolfo as the new CEO over the coming months.
“I remain indebted to the 50,000 colleagues across Capita for their hard work, commitment and professionalism during my time as CEO.
Hernandez said: “I am very excited to be joining Capita. The Group is in strong financial health and well positioned for accelerated revenue growth in both its public service and customer experience markets, with a healthy pipeline of future opportunities.
Marshalls to cut 250 jobs as lack of new builds hits sales
08:02 , Daniel O'Boyle
Landscaping business Marshalls will cut around 250 jobs as a slowdown in housebuilding has led to a slowdown in demand for its services.
The business will shut its factory in Carluke in Scotland, after like-for-like revenue fell by 13% for the first six months of the year. It is expected that the closure will save Marshalls £9 million.
The job cuts will come on top of 150 layoffs announced last year.
It said this was due to “persistent weakness” in new build housing and home renovations. It expects this weakness to continue as high interest rates continue to discourage house building.
“Whilst previously anticipating a recovery in market conditions in the second half of the year, the board is now of the view that an improvement in the second half performance is unlikely given the macro-economic backdrop,” the group said.
In recent months, new builds have fallen at rates only seen during the pandemic and the aftermath of the global financial crisis, as fast-rising interest rates discourage new starts.
Brent Crude at $84 after strongest month in over a year
07:39 , Graeme Evans
An improved demand outlook and China’s recent pledge to boost stimulus means oil prices are on track for their biggest monthly gain since January 2022.
Brent Crude futures today stood at $84 a barrel, having surged 12% in July and by more than 17% when including the last week of June.
Supply cuts by major producers Saudi Arabia and Russia have also impacted the price, which fell as far as $70 a barrel in June from around $100 last August.
On Friday, Brent Crude rose for a fifth week in a row after recording a gain of 0.9%.
Wall Street run continues, FTSE 100 seen lower
07:16 , Graeme Evans
Hopes of a soft landing for the US economy meant Wall Street markets closed higher for the third week in a row on Friday.
The Dow Jones Industrial Average, the S&P 500 and the Nasdaq 100 all posted their highest weekly closes since January 2022.
Key events in the US this week include the closely-watched non farm payrolls report on Friday, as well as earnings figures from Apple and Amazon.
In the UK, traders are braced for the Bank of England to announce an interest rate hike of 0.25% on Thursday with a chance of a 0.5% move.
CMC Markets expects the FTSE 100 index to open today’s session 30 points lower at 7,664.
Morning refresh: what you need to know to start the day
Sunday 30 July 2023 23:47 , Simon Hunt
Good morning from the City desk of the Evening Standard.
Last week was a torrid week for banks. After the furore surrounding the closure of Nigel Farage’s Coutts account, both the CEO of Coutts and the CEO of its parent company NatWest stood down amid suggestions from government that further rules could be on the away to make it more difficult for banks to close customer accounts. Our finance editor Simon English gives his take on NatWest boss Dame Alison Rose’s exit here.
Amid all the noise, though, banks have quietly been making a lot of money. Lloyds posted a 23% rise in profits while NatWest profits soared by £1 billion.
Here’s a look back at some of our other headlines from last week:
Company insolvencies hit the highest level since 2009.
Wealth manager WH Ireland warned it was on the brink of collapse without further support.
The Bank of England has called in the former Federal Reserve boss to find out why its forecasts are wrong.
Financial freesheet City AM was sold to e-commerce firm THG after nearing entering insolvency.
Hot chocolate chain Knoops has secured a £6 million loan from wealthy aristocrats to fuel a global expansion.
Today we’re expecting results from education business Pearson and consumer products firm Haleon. Later in the morning we’ll get data on UK mortgage approvals and consumer credit.
