Yahoo Finance FTSE 100 Live: IMF upgrades UK prospects, shares edge up, pound slips again, Unilever ‘peak inflation’ hopes
Consumer goods giant Unilever, caterer Compass and Games Workshop are among the UK-listed companies reporting today.
Corporate earnings have already boosted shares in the US, where the Dow Jones Industrial Average is on its best run since 2017.
Most Asian markets were sharply higher today following China’s pledge of further action to support the country’s faltering economy.
FTSE 100 Live Tuesday
Unilever sees end to “peak inflation”
Stimulus pledge boosts China stocks
Compass revenues up over a fifth
FTSE 100 closes at 7,691.80
17:01 , Daniel O'Boyle
The FTSE 100 closed up slightly at 7,691.80 with miners among the top risers.
Antofagasta was the biggest riser, up 6.6%, while Anglo American was also up more than 5%.
Caterer Compass was the biggest faller after publishing its results today.
US shares steady
15:51 , Daniel O'Boyle
Shares on Wall Street are close to flat this morning as this week’s Federal Reserve decision on interest rates gets closer.
The S&P 500 is up 0.2% to 4,561.85, while the Dow Jones is up 0.1% to 35,437.34. The Nasdaq, however, is up 0.4% to 14,116.38/
Top risers include General Electric and 3M, while defense firm Raytheon and a number of airlines were among the big fallers.
The Standard View: Labour knows the City that likes to back a winner
15:30 , Daniel O'Boyle
The prawns have been defrosted, the Marie Rose sauce decanted and the lettuce shredded: Labour is once again wooing big businesses. Sir Keir Starmer and Rachel Reeves have stepped up their efforts to win over the City, with one lobbyist revealing he had been invited to breakfast with shadow business secretary Jonathan Reynolds “about a dozen times in the past few months”.
Of course, meetings are one thing, cash is another matter. Labour raised less than half as much as the Tories in the first quarter of this year, but it did include £500,000 from Gary Lubner, the former boss of Autoglass. It will hope for more to fund its general election campaign.
UK to be second worst economy in the G7 in 2023 despite upgrade, says IMF
14:38 , Daniel O'Boyle
The UK is expected to be the second slowest-growing economy in the G7 this year, the International Monetary Fund has said, despite a major upgrade to the country’s prospects.
A new IMF forecast expects the UK’s output to grow by 0.4% during 2023, faster than Germany, but slower than any other country in the Group of 7 (G7).
It is an upgrade by 0.7 percentage points compared to the IMF’s previous forecast. Consumption was stronger than expected and Brexit uncertainty had reduced, the IMF said.
Chris Blackhurst: The City liked what it saw with Labour in ’97. It’s the same now
14:37 , Daniel O'Boyle
The City seeks winners. It likes to get in early, ahead of everyone else, and reap the extra reward.
That’s what is occurring with the growing love-in between the Square Mile and Labour. The polls suggest Sir Keir Starmer is going to sweep to election victory. So, the banks, law firms, accountants, insurers want to cosy up, to ensure their concerns over policy and regulation are heard. Of course this is not going to lead to a love marriage, but it could herald a relationship in which, for a period at least, they maintain a healthy respect for each other. Ideologically, they are poles apart, always will be, no matter how much Starmer and Rachel Reeves go out of their way to stress they’re sensible, okay people really.
No matter, too, how lavish the wine and food laid on for them in top floors of executive dining rooms.
How Labour wooed the City: Keir Starmer’s offensive is working on business
13:33 , Daniel O'Boyle
Labour is wooing businesses and bankers as it readies itself for office in a repeat of the “prawn cocktail offensive” by Sir Tony Blair and Gordon Brown to get finance on side before their 1997 victory.
Business leaders say Sir Keir Starmer and his shadow chancellor Rachel Reeves have stepped up their efforts to win over the City, in private talks with bankers and chief executives. One City lobbyist said: “Labour leaders have spent many more hours with business than they have in schools and hospitals. I’ve been invited to breakfast with Jonathan Reynolds (shadow business secretary) about a dozen times in the last few months.”
While Chancellor Jeremy Hunt was giving his Mansion House speech, Labour was hosting the venture capital sector at a private dinner. Ed Miliband emailed City bosses seeking an audience to discuss energy policy. Many business leaders say they have mostly been impressed, and are reassured that a Labour government will not attempt radical regulation.
City comment: ‘Right’ to work from home will be hard to protect
13:25 , Daniel O'Boyle
Another law firm, Osborne Clarke, has said regular attendance in the office is a requirement to be considered for a bonus.
Specifically staff will have to be at their desks “more often than not” say the big cheeses at the firm — interpreted as an average of at least three days a week, according to the lawyer website Legal Cheek. It follows a similar move by US giant Skadden Arps earlier this year. There will be more.
The comments underneath the story offer an insight into how such less than subtle financial carrots to encourage presenteeism are likely to go down. One, under the giveaway nom de plume “OK Boomer”, suggests that such a “paltry bonus” will barely cover the cost of the extra commuting and the policy will trigger a wave of “quiet quitting”. It is clear to see battle lines being drawn up here.
HSBC cuts mortgage rates
11:27 , Daniel O'Boyle
HSBC has become the first high-street lender to cut its mortgage rates, in the clearest sign yet that mortgage mayhem appears to be coming to an end.
The banking giant is to cut its rates across the spectrum of residential products it offers. Currently a five-year deal with a 90% LTV is priced at 6.04%.
HSBC did not reveal the size of the decreases, which will come into effect tomorrow.
Games Workshop holds recent gains, China-focused stocks rally
10:33 , Graeme Evans
Shares in Games Workshop. the £3.7 billion-valued hobby firm, today held firm after a record set of annual results.
The Nottingham-based company, whose Warhammer fantasy miniatures are sold in over 5,000 stores worldwide, is worth more than British Land and easyJet as one of the biggest stocks in the FTSE 250 index.
Chief executive Kevin Rountree said both the business and hobby “are in great shape” amid the highest sales and profit figures in three decades as a stock market company.
Revenues increased 13.5% to £470.8 million and pre-tax profits by 9% to £170.6 million, while £136.5 million of “truly surplus cash” has been handed to shareholders.
The next dividend will see 145p a share paid in September, up from 90p the year before. Staff have also benefited from the success, getting £4,000 each in a profit share scheme.
Shares are almost double last autumn’s level and remain in sight of their 2021 record after falling by just 50p to 11,260p today. Analysts at Peel Hunt have a price target of 12,000p.
The robust performance mirrored the wider FTSE 250 index, which stood 9.13 points lower at 19,135.85.
London’s top flight rose 14.09 points to 7692.68 thanks to gains of 3% and more by mining stocks including Rio Tinto, Anglo American and Antofagasta.
Their strong performance came after China’s Politburo pledged further policy action in support of the country’s faltering economy. It also dropped a previous statement that “houses are meant for living in, not speculation”.
UBS Global Wealth Management said: “The language from the official readout falls short of “bazooka” level stimulus but in our view the message is still clearly positive.”
Hong Kong’s Hang Seng index closed almost 4% higher on the back of the developments, with property and domestic-focused stocks particularly strong.
In London, Prudential shares rose 25p to 1078.5p and Burberry improved 31p to 2213p, while Fidelity China Special Situations lifted 5p to 217p as one of the best performing stocks in the FTSE 250 index.
SThree weighs risk of AI in recruitment
09:58 , Simon Hunt
Recruitment firm SThree has begun a review into the “emerging risk” posed by AI as the technology plays a growing role in employers’ hiring decisions.
The Bank-based business, which specialises in tech recruitment, said its board had “agreed that artificial intelligence, as well as being an opportunity, should be monitored as an emerging risk for the Group as the risk has the potential to impact across different areas of the business.”
CEO Timo Lehne told the Standard: “We must be mature enough to see there is always a risk when technology like this comes into an industry.
“We know it is already a big investment field that is going to increase much further and faster. There’s just the question of how we can take advantage.”
The company reported a 6.9% rise in revenues to £825 million in the six months to the end of May, as a drop-off in life sciences recruitment amid an unwinding of Covid-related hires was offset by a 23% rise in engineering recruitment, fuelled by growth in renewable energy infrastructure developments. Shares rose 3.7% to 362p.
Meal deal sandwiches fly off shelves
09:24 , Simon English
SUPERMARKET sandwich meal deals are a “foodie phenomenon” as cash-strapped consumers look to stretch the pennies, said Greencore today.
The UK’s biggest maker of sandwiches and supplier to leading grocers says such deals are now more than half of all sandwich sales at supermarket chains.
Former Morrisons man Dalton Philips said: “The food to go category remains hugely relevant to consumers as they contend with the cost-of living crisis, and it is particularly notable that 52% of supermarket sandwiches are now bought as part of a meal deal, up from 46% this time last year.
"We are delighted that our core category is playing such a key role in feeding the UK, and in a way that represents such good value.”
In the third quarter sales rose 9.3% to £495 million.
There is also soaring demand for “premium” meal deals which include more luxurious items such as premium sandwiches, salads and sushi.
The company’s manufacturing site in Leeds prepares a range of Greencore’s frozen Yorkshire puddings. It also has a base in Selby, which prepares the company’s cooking sauces, pickles and other ambient grocery lines and Kiveton, on the outskirts of Sheffield, which makes the company’s quiche and chilled soups ranges.”
Greencore shares rose 2p to 87p, which leaves the business valued at £424 million.
Unite Students raises £300 million for new developments as CEO warns again of supply crisis
09:18 , Daniel O'Boyle
Student housing provider Unite has raised £300 million for two new developments, including one in Stratford, as its CEO warned students may not be able to find properties in the areas they would like as its accommodation fills up.
The group raised funds for a 952-bed property in Stratford, set to open in 2027, and a 614-bed property in Bristol. CEO Richard Smith hopes those developments can help ease a shortage of student housing caused by HMO landlords exiting the sector, which he has repeatedly warned of.
Today, he told the Standard that with Unite’s properties full for the 2023-24 academic year, some students might find themselves living much further away from their universities than they had planned.
“There will be cases where students will not be able to find a property they can live in in the locations they would like,” he said. “There were some reports last year of students having to secure housing in the next town over, and we think there’ll be more of that”.
Unite shares are down 15p, or 1.6%, to 930p.
Unilever shares rally, Compass and Unite under pressure
08:38 , Graeme Evans
Unilever shares have risen 5% or 200p to 4218.5p after half-year underlying sales growth of 9.1% came in ahead of City forecasts.
Anglo American, Rio Tinto and Antofagasta also rose 2% after leaders in China pledged more support for the country’s economy.
Other stocks doing well included Prudential and Burberry, with the FTSE 100 index up 6.69 points to 7685.28.
Auto Trader is the biggest faller, down 20.4p to 629.6p after JPMorgan cut the car portal to “underweight” with a price target of 555p.
Updates by caterer Compass and student accommodation provider Unite left their shares 58p lower at 2068p and 15p cheaper at 930p respectively.
The FTSE 250 index dropped 52.17 points to 19,092.81, with Games Workshop among the fallers. Its results were the best since the company’s flotation 29 years ago, but shares fell back 270p to 11,040p after a strong recent run.
WANdisco shares tank 96% after re-admission to reading
08:20 , Simon Hunt
Shares in beleaguered tech company WANdisco plummeted 96% in the opening minutes of trade as the scandal-hit tech company’s stock was re-admitted to trading for the first time in months.
In March, WANdisco revealed it had uncovered potentially fraudulent sales, and as a result its bookings would be much lower than previously reported. It later revealed that its bookings should have been $11.4 million rather than $127 million.
The scandal led WANdisco to suspend its shares and to co-founder and CEO David Richards and finance boss Erik Miller stepping down from the business. The firm said the fraudulent accounts were the work of a single sales employee.
Peak inflation has passed, says Unilever
08:14 , Simon English
UNILEVER delivered a sharp blow to government hopes that inflation will halve by the end of the year as it admitted costs of its staple of consumer goods will keep rising.
The Anglo-Dutch giant behind Dove soap, Domestos and Hellmann’s Mayonnaise says soaring prices of oil and grain leave it with little choice but to put up prices.
That will increase the pressure on the Bank of England to go for a 0.5 percent poise rise in interest rates when its Monetary Policy Committee meets next year.
But Unilever does hope that “peak inflation” has passed, so price rises may at least be lower from here.
Prices rose 9.4% in the first half, compared to 13.3% in the fourth quarter of 2022.
Unilever’s quarterly sales beat City estimates – the shares jumped 192p to 4210p.
New CEO Hein Schumacher said: “My early immersion in the business has confirmed my belief in Unilever’s strong fundamentals. The task ahead is to leverage these core strengths - supported by our simplified operating model - to drive improved performance and competitiveness.”
Sales in the first half jumped 9.1%. Operating profit rose 3.3% to e5.2 billion (£4.3 billion).
Unilever has so much spare cash it is spending up to e3 billion on buying back its own shares. It said today it has done e750 million of that so far.
The company noted it is working in a “volatile and high-cost environment” though it hopes price growth will “moderate through the year”.
888 takes shot at former CEO candidate Alexander as it picks Widerström as new boss
08:13 , Daniel O'Boyle
Betting giant 888 took an apparent swipe at shareholder Kenny Alexander and the investment group that wished to make him CEO today as it finally ended its six-month search for a new boss.
The William Hill owner picked Per Widerström, who until last year was CEO of Eastern European gambling group Fortuna, to fill the void left by Itai Pazner. Pazner quit in the wake of an investigation into how 888 performed money laundering checks for Middle Eastern high-rollers.
While 888 hunted for a new boss, investment group FS Gaming built a stake in the business. FS Gaming is led by a group of former Entain executives, including ex-boss Kenny Alexander, who they hoped to see replace Pazner. Alexander was ousted from Entain, which was then known as GVC, amid an HMRC investigation into a Turkish business that Alexander reportedly still had links to.
However, those plans fell apart when the Gambling Commission launched a review into the group, and left 888 with the conclusion it would lose its licence if Alexander was appointed. 888 said it ended talks with FS over the CEO position because of the watchdog’s review.
In announcing Widerstrom as the new boss, 888 CEO Lord Mendelsohn appeared to take a shot at Alexander’s past controversies, highlighting Widerström’s cleaner record.
“Per not only understands the power and exciting potential of the business, but the board is also very pleased with his strong record and reputation on governance and compliance,” he said.
Reach blames Facebook as pageviews and profits fall
07:40 , Daniel O'Boyle
Daily Mirror and Express publisher Reach blamed falling revenue and profit on “Facebook’s deprioritisation of news content” as online page views fell in the first half of the year.
Page views across Reach’s portfolio fell by 16% to 1.4 billion, with Reach CEO Jim Mullen saying most of the drop was due to Facebook’s changes. The social media giant’s relationship with news publishers has been tense of late, as it threatened to withdraw all news content in Canada, while new Twitter rival Threads - owned by Facebook parent Meta - opted not to promote “politics and hard news”.
Given the drop in pageviews, Reach is looking for revenue streams “less dependent on direct customer volumes”, such as affiliate marketing and the launch of paywalled newsletters.
On the print side, circulation revenue was down by 2%, but ad revenue dropped by more than 20%.
Reach also continues to look into AI, after announcing earlier this year that robots were already writing some of its articles.
Compass revenue up over a fifth as sports crowds and staff canteens continue to fill up
07:31 , Michael Hunter
Compass, the courtside-to-canteen caterer, reported a revenue rise of over a fifth for the third quarter of its financial year, as it continues to benefit from the return of workers to offices and crowds to sporting events
The FTSE 100 multinational, which feeds spectators at the Wimbledon tennis championships and serves 5.5 billion meals a year across 55,000 sites, said organic revenue growth over the year-to-date was 21%.
Canteen food has been a feature used by employers to tempt people back to the office after the end of Covid lockdowns. Compass, which has previously pointed to a rise in “first time outsources” offering staff restaurants, said today that “outsourcing trends remain strong and are contributing to an exciting pipeline of new business opportunities across all our regions.”
Growth was led by a 25% rise in revenue from its “rest of the world” region, with Europe up 24% and north America up 20% on an organic basis. It stoodby its revenue guidance for 2023, which predicts a 30% rise in operating profit.
It said rising input prices remained a factor: “Whilst inflation remains elevated, we are making margin progress by mitigating cost pressures, pricing appropriately and benefiting from operational leverage.”
Net income at Compass neared £26 billion for 2022. It will report in US dollars from October this year, which the bulk of its business now down in north America, but told The Standard when it announced the change that it has no plans to move its share listing to New York.
Asia stocks jump, Dow Jones on best run since 2017
07:25 , Graeme Evans
Hong Kong’s Hang Seng index has surged 3.5% after China pledged further policy action in support of the country’s faltering economy.
Property and domestic-focused stocks led the gains as a meeting of China’s Politburo focused on the “new difficulties and challenges” facing the economy.
The Shanghai Composite also lifted 2% but pressure on Tokyo-listed technology stocks meant the Nikkei 225 stood slightly lower. Brent Crude futures also traded above $83 a barrel this morning on hopes of stronger China demand.
The FTSE 100 index is expected to open near to its opening mark, having risen by 15 points to 7678 yesterday.
It comes after another positive session on Wall Street as the Dow Jones Industrial Average rose for the 11th day in a row, representing its best performance since early 2017.
The Dow’s rise of 0.5% beat the gains for the S&P 500 index and Nasdaq Composite as sentiment continues to be underpinned by robust corporate earnings updates.
Attention now turns to tomorrow’s Federal Reserve interest rates announcement, when policymakers may say there’s no guarantee that the latest 0.25% rise is the last of the cycle.
Recap: Yesterday’s top stories
06:52 , Simon Hunt
Good morning. Here’s a summary of our top headlines from yesterday:
Profits at Ryanair topped £500 million in the first quarter powered by strong demand for overseas travel at Easter.
Vodafone said it was on the cusp of filing a proposal for its blockbuster merger with Three as it announced a new CFO.
The CEO of M&C Saatchi has quit after a three year turnaround of the business.
Customers on squeezed incomes switching insurance plans drove up sales at MoneySupermarket.
Today we’re expecting results and trading updates from:
Unilever
Reach
Unite Students
Sage Group
Compass Group
Games Workshop
