FTSE 100 Live 04 October: JD Wetherspoon dividend returns as sales top £2bn, US jobs report in focus
FTSE 100 Live Friday
JD Wetherspoon dividend returns
Watches of Switzerland acquires Hodinkee
US jobs report keeps markets on edge
Market update: Stocks struggle ahead of US jobs report, Rolls-Royce down 2%
09:56 , Graeme Evans
The surge in oil prices and imminent release of closely-watched US jobs figures today curbed risk appetite during a downbeat end to the London trading week.
Brent Crude stood above $78 a barrel after jumping 5% yesterday on speculation over potential Israeli strikes against Iran’s oil infrastructure. The benchmark is up 9% this week, although the price had been close to $90 in April.
BP shares added another 4p to 413p on the back of the developments, extending its recovery to 8% since touching a two-year low at the end of last week.
Lloyds Banking Group and NatWest also rose but their progress was offset by weakness elsewhere as the FTSE 100 drifted 16.55 points to 8265.97.
The performance reflected cautious positioning ahead of today’s US jobs report, particularly given that the last two releases led to falls of more than 1.5% for the S&P 500 index.
Deutsche Bank’s US economists are looking for September’s nonfarm payrolls figure to be in the region of 150,000, compared with the addition of 142,000 jobs the previous month.
Strong figures from the services sector yesterday cast doubt over how quickly the Federal Reserve will be able to cut interest rates after September’s initial 0.5% reduction.
On the FTSE 100 fallers board, Rolls-Royce dropped 2% or 9.6p to 523.8p and AstraZeneca weakened 104p to 11.860p.
Renewables firm SSE fell 22p to 1868.5p after analysts at Jefferies removed their Buy recommendation in the wake of yesterday’s in-line trading update.
The FTSE 250 index rose by 0.5% or 101.67 points to 20,841.73, with heavily-sold Burberry and Aston Martin Lagonda both showing signs of recovery with gains of more than 2%.
The resumption of dividend payments alongside robust annual results failed to inspire a rally for JD Wetherspoon, which stood broadly unchanged at 725p.
Annual sales topped £2 billion for the first time and pre-tax profits before one-off items lifted 73.5% to £73.9 million. It will distribute 12p a share on 28 November. the same as the dividend payment in the year before the pandemic.
JD Wetherspoon backed to gain market share
08:58 , Graeme Evans
JD Wetherspoon shares are broadly flat at 725p, representing a fall of 10% this year despite the profits upturn and today’s resumption of dividend payments.
Analysts at City bank Jefferies have a price target of 1000p, pointing out that the company’s valuation remains undemanding relative to history.
They added: “We argue that Wetherspoon's low relative price positioning and well-located and well-invested premises will gain market share and benefit from trading down.”
Like-for-like sales increased 4.9% in the first nine weeks of the new financial year, compared with 5.8% for the 10 weeks to 7 July.
Jefferies said the weaker sales momentum was due to the improved inflationary environment reducing the need for price rises.
SSE shares lower in flat FTSE 100, JD Wetherspoon shares rise
08:29
The FTSE 100 index is 4.32 points lower at 8278.20, with renewables firm SSE and savings and retirement business Phoenix among the worst performing stocks.
SSE dropped 25.5p to 1865p after analysts at Jefferies removed their Buy recommendation in the wake of yesterday’s in-line trading update. A similar downgrade by UBS meant Phoenix fell 3p to 520.5p.
BP rose 4.4p to 413.4p as the energy sector continued to benefit from the rebound in oil price, with Brent Crude this morning at $77.97 a barrel.
The FTSE 250 index is 0.3% or 70.37 points higher at 20,810.43.
JD Wetherspoon rose 6p to 730.5p after reinstating dividend payments alongside annual results, while Watches of Switzerland rose 9.2p to 465.6p after unveiling the acquisition of New York-based content creator Hodinkee.
Wetherspoon brings back dividend as conditions improve
07:56 , Graeme Evans
Dividends are back on the menu for JD Wetherspoon investors after the pub chain revealed it will distribute 12p a share on 28 November.
This is the same as 2019’s payment, reflecting the company’s improved trading and financial position after a long period of pandemic disruption.
Wealth Club’s Charlie Huggins said: “Wetherspoons has enjoyed a good year, reporting a significant recovery in sales and profits and a return to the dividend register.
“With many pub and restaurant companies struggling in the current environment, this is an impressive performance.”
Wall Street on edge ahead of US jobs report
07:48 , Graeme Evans
The monthly US jobs report is out later, a potential market moving event after the last two releases led to falls of more than 1.5% for the S&P 500 index.
Deutsche Bank’s US economists are looking for September’s non-farm payrolls figure to be in the region of 150,000, compared with the addition of 142,000 jobs the previous month.
The unemployment rate is seen rounding up to 4.3% from 4.2% previously.
Strong figures from the services sector yesterday cast doubt over how quickly the Federal Reserve will be able to cut interest rates after September’s initial 0.5% reduction.
Watches of Switzerland acquires Hodinkee
07:35 , Graeme Evans
Watches of Switzerland has bought Hodinkee, the New York City-based creator of print, digital and video content for luxury watch enthusiasts.
Hodinkee, which began as a watch blog in 2008, has 22.2 million annual unique visitors to its website and over one million social media followers.
Its founder Ben Clymer will return to lead the operations of Hodinkee for the first time since he ceded his role as chief executive in December 2020.
Watches of Switzerland chief executive Brian Duffy said: “We have been avid followers of Hodinkee for many years and have long-respected Ben and his team’s success in creating the undisputed destination for luxury watch enthusiasts.”
He said the acquisition will support his company’s e-commerce business, helping to drive traffic and brand awareness across its markets.
FTSE 250-listed Watches of Switzerland is the UK’s largest retailer for Rolex, OMEGA and Cartier watches. It trades under the UK brands Mappin & Webb and Goldsmiths and Mayors and Betteridge in the United States.
Wetherspoon profits up 73% as sales hit £2 billion
07:20 , Graeme Evans
Annual sales at JD Wetherspoon have topped £2 billion for the first time after the pub chain reported a 5.7% increase for the year to 28 July.
On a like-for-like basis, bar sales rose by 8.9% on a year earlier and food sales by 5.6%.
Pre-tax profits before one-off items lifted 73.5% to £73.9 million, having recorded a loss of £30 million in the 2022 financial year.
The company said sales continued to improve into the new financial year after a 4.9% increase in like-for-like sales in the nine weeks to 29 September.
It currently trades from about 800 pubs, although it believes there’s potential to grow this figure to around 1,000. Recent openings have included The Captain Flinders near Euston Station and The Grand Assembly in Marlow.
Brent Crude above $77 a barrel, FTSE 100 seen lower
07:05 , Graeme Evans
Brent Crude this morning stood at $77.47 a barrel after surging yesterday on speculation that Israel might strike against Iran’s oil facilities.
The benchmark rose 5% by last night’s close, leaving it at its highest level in four weeks and on course for the strongest week in more than a year.
The Middle East developments also impacted Wall Street trading as the Dow Jones Industrial Average fell 0.4% and the S&P 500 index by 0.2%.
The FTSE 100 index closed eight points lower yesterday and is forecast to begin today’s session with a decline of 11 points to 8271.
Sterling is trading at $1.313 after an earlier decline caused by Bank of England governor Andrew Bailey signalling a potential faster pace of interest rate cuts.