AstraZeneca today announced plans to achieve “modest profitability” on new orders of its Covid-19 vaccine, having so far delivered 1.5 billion doses at cost price.
The update came as Astra reported third quarter sales ahead of expectations, although shares fell 5% after the earnings figure came in short of hopes and chief executive Pascal Soriot left the pharmaceutical giant's full-year guidance unchanged.
Meanwhile, record sales figures from China's version of Black Friday, known as Singles Day, offered some encouragement to Asia markets overnight. The momentum failed to benefit the FTSE 100 index, which fell back from its 20-month high near 7400.
FTSE 100 Live Friday
AstraZeneca shares fall after results
Johnson & Johnson to split
Sales slow on China’s Singles Day
FTSE 100 slips from 20-month high
Avon Protection shares crash 40%
FTSE on track to close lower
Friday 12 November 2021 15:46 , Oscar Williams-Grut
With around 45 minutes left of the trading day, it looks like the FTSE 100 is going to close lower.
The bluechip index is currently down 39 points at 7345. It’s being dragged down AstraZeneca, its biggest company, which is down 6.6% after missing forecasts on third quarter adjusted earnings.
Chuka Umunna on switching politics for ethical banking
Friday 12 November 2021 15:16 , Oscar Williams-Grut
Chuka Umunna, the former Labour Party rising star, has spoken exclusively to the Standard about his new career as an ESG banker at JPMorgan.
Umunna, who was MP for Streatham from 2010 to 2019, now spends most of his days advising big companies on how to make sure they are green, well governed, and treating people well.
He’s also charged with making sure JPMorgan is practising what it preaches. It’s a big job: ESG was already hot but COP26 has supercharged interest in ethical and sustainable business.
DJ Khaled’s dark kitchen
Friday 12 November 2021 14:25 , Oscar Williams-Grut
A lighter story this Friday afternoon: award-winning producer DJ Khaled has teamed up with “dark kitchen“ giant Reef Technology to launch a delivery-only chicken wing chain simultaneously across three continents.
Miami-based Reef was founded in 2013 as a car park management tech company but has since expanded to become an innovative operator of disused or underused urban space.
The company leases space like car parks and rooftops and sets up things like health clinics and ‘dark kitchens’ for takeaway services. It has signed a deal in Miami to develop an urban air taxi runway on top of one of its sites.
Reef, which raised $1 billion in November, works with the likes of Deliveroo, UberEats, and Wendy’s in the US. It is backed by Japanese tech investment giant SoftBank.
P&O Ferries faces competition probe
Friday 12 November 2021 14:00 , Oscar Williams-Grut
The Competition and Markets Authority (CMA) said it was investigating whether the arrangement between P&O and DFDS “has potential to prevent, restrict or distort competition within the UK.”
The two ferry operators entered a mutual space charter agreement in May to try and shorten freight customers’ waiting times and improve the flow of traffic on the trade route between the UK and EU.
Rip off the Band Aid
Friday 12 November 2021 13:44 , Simon Freeman
JOHNSON & Johnson today announced plans to follow peers like GSK, Pfizer and Merck by breaking its vast healthcare empire into two standalone companies.
The US giant will spin off its consumer arm, whose mass-market products include Band-Aids plasters and Johnson’s Baby Powder bring in stable annual revenues of $15 billion a year.
The move over the next two years will leave its riskier but higher-margin prescription drugs and medical devices divisions - which account for $85billion in annual sales - as a separate entity.
Avon Protection sinks on issues with body armour
Friday 12 November 2021 13:33 , Oscar Williams-Grut
Avon Protection shares have crashed more than 40% after it revealed faults with its body armour plates intended for the US Army.
The military engineering company, which has been around since 1885, said the plates “encountered a failure” in testing which will “significantly delay the likely approval timetable for this product”.
It has also seen delays in approval for a second set of body armour, and has now launched a “strategic review” of the business. The company says its respiratory protection and helmet products are not affected.
City analysts had generally been bullish about the stock until today, with at least three buy recommendations from brokers. Today the stock fell 805p to 1102p, leaving the business valued at £342 million.
That continues a miserable run for the shares which have tumbled from more than 4000p a year ago. Investec says the shares are a sell, though it had put on a price target of 1907p.
The full-year results planned for November 23 will now be delayed until December when the outcome of the review should be known. The group’s revenue guidance had included around $40 million of body armour revenue. This contribution is now expected to be “significantly reduced”, with the ultimate impact, including any associated cost savings, depending on the outcome of the review process.
Peel Hunt was notably downbeat. It told clients in a note: “With full resolution possibly taking a further nine months or more, but with the business carrying a cost base commensurate with full rate production of both contracts, management is placing the body armour business under strategic review.”
The broker added: “We place our numbers, recommendation and target price under review until further notice.” It had previously been advising clients to buy the shares.
Peel said the failure of the product is a “huge disappointment” noting the “high degree of confidence of success going into the lab”.
In The Style founder Adam Frisby to step back as CEO
Friday 12 November 2021 13:12 , Oscar Williams-Grut
Shares in In The Style are lower this afternoon after its founder announced plans to step back as CEO.
In a surprise move, the founder today announced he has decided to now work in a newly-created, board-level role of chief brand officer.
Astra starts to profit from Covid jab
Friday 12 November 2021 11:37 , Simon Freeman
The FTSE 100 giant committed to selling the shots “at cost” for the duration of the pandemic and expects the shift to generate “modest profitability.”
It has supplied 145 million doses to low-income countries through the World Health Organisation’s Covax programme preventing an estimated five million Covid cases and saving more than one million lives.
Buying trend for M&S shares continues
Friday 12 November 2021 10:33 , Graeme Evans
The fashion for owning Marks & Spencer shares continued today as the once troubled retailer ends a spectacular week at its highest level since May 2019.
Shares put on another 2% and have risen by more than a fifth to as much as 238p after Wednesday's results showed momentum in the retailer's long-awaited recovery.
Retail analysts at broker Peel Hunt yesterday swung behind M&S with a new target price of 260p. They added: “M&S may never again scale the heights it enjoyed years ago, but that does not mean it cannot be a very worthwhile investment.”
M&S hasn't been alone in posting big share price gains this week, with the hectic diary of trading updates also delivering rich rewards at ITV and Halfords among others.
Precious metal miners also surged after the gold price hit a 20-week high at $1850-an-ounce to reflect inflation hedging after a big jump in US consumer prices to 6.2% for October.
FTSE 100-listed Polymetal International today fell back 14p to 1495p but the Russian miner stands 9% higher across the week. Egypt-focused Centamin has also risen 11% since Monday, despite easing back 1.45p to 103.9p in the FTSE 250 index today.
The FTSE 100 index slipped 37.26 points to 7346.92 after a results-day fall of 3% for its largest stock, AstraZeneca. However, there was some encouragement for Burberry and Johnson Matthey as they recovered 3% and 1% after their shares took a pounding yesterday.
Highlights in the FTSE 250 index included a rise of 2% for Redrow as it became the latest housebuilder to report favourable trading. Shares added 14.6p to 642.2p after it revealed 2.1% growth in net private reservations for the past 19 weeks to £672 million.
Among the FTSE 250 fallers, Molten Ventures slid 7% at the end of a week in which the venture capital firm changed its name from Draper Esprit.
Wood Group dropped 5% despite the Aberdeen-based engineer announcing a strategic review looking into how to realise value from its consultancy operations focused on the built-environment.
Its update also showed improved revenue and earnings in the second half of 2021, but shares fell 8.65p to 192.35p as Wood said the rate of recovery in its projects arm has been slower than anticipated.
Landsec sells Canary Wharf block for £200 million
Friday 12 November 2021 09:35 , Oscar Williams-Grut
BlackStone’s European Property Income Fund (BEPIF) has paid £196.5 million for the property, representing a net yield of 4% for Land Securities.
Singles Day sales growth slows
Friday 12 November 2021 09:21 , Oscar Williams-Grut
Sales growth has slowed for Singles’ Day, one of the biggest annual online shopping events in the world.
Alibaba, the Chinese e-commerce giant that created the event in 2009, said it sold $84.54 billion worth of goods on its platform over the 11 day event, which culminated on Thursday.
The total was a record high for the event and 8.5% above last year’s haul. However, it was the first time Singles Day has failed to register double digit percentage growth since Alibaba set it up.
Alibaba’s Yang Guang said the company “delivered steady and quality growth.”
Singles Day is China’s answer to Black Friday. Alibaba established the event as a way to boost sales. It is pitched as an alternative to Valentine’s Day, with singletons encourages to buy themselves discounted goods during the event.
The slowdown in growth comes amid a crackdown on tech giants like Alibaba by authorities in China. That crackdown has touched upon Alibaba and its founder Jack Ma, with Chinese authorities forcing Ma to pull the float of his business Ant Financial last year.
TheWorks optimistic despite supply chain pressure
Friday 12 November 2021 09:19 , Graeme Evans
TheWorks.co.uk, which sells arts, crafts, toys, books and stationery, has reported two-year sales growth of 17.9% for the 26 weeks to October 31.
The better-than-expected performance reflects growth in stores and the online business trading at double pre-pandemic levels, aided by families taking staycations this summer as well as a strong back-to-school period.
The company said early indications for Christmas sales are positive, although it has incurred significant additional costs in order to minimise the impact of supply chain pressures. Shares fell 2p to 55p.
Astra drives FTSE 100 weakness
Friday 12 November 2021 08:49 , Graeme Evans
As the biggest company in the FTSE 100 index, AstraZeneca's 3% results-day slide has meant a downbeat end to London’s week.
Astra fell 321p to 9123p, although the decline only took the stock back to where it was at the start of the month. Rival GlaxoSmithKline, meanwhile, built on its recent improvement by adding 5.8p to 1595.6p.
The FTSE 100 index weakened 21.9 points to 7362.28, with other stocks in the red including Ladbrokes owner Entain and oil giant Royal Dutch Shell after falls of more than 1%.
Johnson Matthey shares steadied following yesterday's pummelling for the speciality chemcials firm, while fashion house Burberry improved 2% having also fallen sharply in the previous session.
The FTSE 250 index dropped 39.16 points to 23,534.89. Fallers included Molten Ventures, which was down 6% at the end of a week in which the venture capital firm changed its name from Draper Esprit.
Astra sees “modest profit” for Covid jab
Friday 12 November 2021 08:07 , Graeme Evans
AstraZeneca has said its expects the Covid-19 vaccine developed with the University of Oxford to achieve “modest profitability” as new orders are received.
The jab has so far been rolled out on a not-for-profit basis, with the majority of sales in the current quarter set to come from those existing pandemic agreements. Pfizer and other drugmakers already sell their Covid vaccines on commercial terms.
Excluding the vaccine, Astra's total revenues increased 21% in the year to date to $23.2 billion (£17.3 billion) and by 34% in the quarter to $8.8 billion (£6.6 billion).
The company, which completed the addition of US-based rare diseases specialist Alexion in the period, reported a 14% rise in core earnings to $1.08 per share.
FTSE 100 consolidates at 20-month high
Friday 12 November 2021 07:41 , Graeme Evans
A solid week for European markets is finishing with the FTSE 100 index within sight of the 7,400 mark for the first time in 20 months.
London's resolute performance follows more strong earnings updates, while investors have also shrugged off this week's shock 6.2% inflation figure in the United States.
The relaxed mood of stock markets reflects hopes that price pressures are starting to ease after the Baltic Dry Index, which tracks global shipping rates, fell back from its three-decades high seen last month.
The fallout from the inflation figure has benefited dollar earning stocks in the FTSE 100, with expectations for earlier-than-expected rises in US interest rates lifting the greenback to its best level against a basket of currencies since July 2020.
The pound remained below $1.34 this morning at its lowest level this year, having been put under further pressure yesterday by the UK’s sluggish GDP figures for the third quarter.
Chinese markets enjoyed a strong session overnight after record sales in their own version of Black Friday, called Singles Day, although sales grew at the slowest rate since the event started more than a decade ago.
E-commerce giant Alibaba and rival JD.com are reported to have generated sales of more than £100 billion between them as consumers snapped up electric appliances, electronics and personal care goods during the event.
In Japan, the Nikkei 225 closed more than 1% higher on the back of a tech-led rally fuelled by strong trading on Wall Street on Thursday. The FTSE 100 index is set to open broadly unchanged at 7387.
Gold has also consolidated its recent gains above $1,850 an ounce, driven by inflation hedging following the surge in US consumer prices.