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FTSE 100 Live: Drahi’s BT stake under scrutiny, Johnson Matthey and Auto Trader results

·5-min read
 (Evening Standard)
(Evening Standard)

An 18% stake held in BT by French billionaire Patrick Drahi’s Altice business was today called in for scrutiny under the National Security and Investment Act.

The referral by Business Secretary Kwasi Kwarteng comes after last December’s move by Altice to increase its holding in the UK telecoms business from 12.1% to 18%.

In other London corporate news, there are annual results from Auto Trader and clean air business Johnson Matthey has published its full-year results alongside a strategy update.

FTSE 100 Live Thursday

  • Altice’s BT stake called in for security review

  • New Johnson Matthey boss unveils strategy

BT shares fall 5%, FTSE 100 steady

10:28 , Graeme Evans

A national security review of the 18% BT stake built by French telecoms tycoon Patrick Drahi left the FTSE 100 group facing another bout of uncertainty today.

Shares slid 5% as business secretary Kwasi Kwarteng used powers under the new National Security and Investment Act to examine the shareholding held by Drahi’s investment vehicle Altice.

The government has 30 working days, extendable by a further 45 days, to carry out the assessment. The move comes less than a month before Altice is due to be released from Takeover Panel rules preventing it from making a full offer for BT.

When Altice took its stake from 12.1% to 18% in December, it backed BT’s management and said it had no intention of making a full takeover offer.

Quilter Cheviot analyst Ben Barringer called the timing interesting: “The fact he has been raising his stake in the company has been well known and is not news, so the fact the government has decided to act now shows it may want to be seen to flex its muscle on key national infrastructure.”

Today’s share price fall unpicks some of BT’s recent momentum after it announced the joint venture of BT Sport with Discovery and reported further progress on its fibre roll-out.

Barringer added: “Focus is likely to be diverted for the time being and until Drahi’s full intentions are made clear.”

BT shares were 8.75p lower at 181.5p, which wipes out gains seen over the past week. Other fallers in the top flight included United Utilities after full-year results highlighted the impact of higher finance costs on its bottom-line performance.

The North West-based water supplier reported a 1.3% rise in operating profits to £610 million but shares fell 8% or 90.5p to 1022p. SSE and National Grid were 2% weaker.

The FTSE 100 index held firm at 7517.84, following a drop of 4.91 points. JD Sports Fashion fell another 0.8p to 111.2p after yesterday’s abrupt departure of long-serving boss Peter Cowgill.

As executive chairman, Cowgill turned Bury-based JD into a transatlantic retail powerhouse whose valuation jumped by 1,450% over seven years to a peak of 234p in November.

UBS, which has a buy recommendation and price target of 210p, said shares could remain under pressure until after June’s annual results and appointment of a new chief executive.

Auto Trader upbeat after strong year

08:35 , Graeme Evans

Auto Trader shares are more than 2% higher after the car listings portal reported the best financial performance in its history, with annual profits 91% higher at £301 million.

Revenues per retailer, a key metric for the business, were up £886 to £2,210 on average per month with the company expecting further growth this year. Excluding Covid discounts in the prior year, the figure for 2021 increased by £247 per month.

Chief executive Nathan Coe said: “We are well placed to continue growing our core business while establishing the products that retailers will need to shift more of the car buying journey online.

"Despite the current high levels of economic uncertainty and industry change, we enter the year with good reason for both confidence and optimism."

Shares lifted 10.8p to 576.8p.

New boss sets out Johnson Matthey vision

08:18 , Graeme Evans

Johnson Matthey has a “pivotal role” to play as a global leader in sustainable technologies, its new boss said today after a strategy review ruled out a break up of the group.

Liam Condon pledged to focus on the company’s core strengths in clean air, catalyst technologies, hydrogen technologies and services in platinum group metals.

He said: “By helping our automotive, chemical and energy industry customers to decarbonise, we will unlock tremendous growth potential for Johnson Matthey.”

The update came as the company reported a 13% drop in annual pre-tax profits to £195 million, a decline largely reflecting last year’s decision to pull out of the battery materials sector.

Australia headquartered EV Metals said today it is buying the battery materials business in a deal worth £50 million.

Nvidia guidance sends shares lower, FTSE 100 flat

07:47 , Graeme Evans

Disappointing guidance from chipmaker Nvidia in an update after Wall Street’s closing bell means US markets are set to lose momentum from yesterday’s strong session.

Nvidia’s shares were 7% lower in after-hours dealings, while data platform business Snowflake also fell sharply as its margin guidance disappointed investors.

Trading during regular hours was positive, with the S&P 500 up 1% after the release of minutes from the US Federal Reserve’s May meeting contained no surprises.

Markets are looking for further half point rises in June and July, along with the possibility that rates will move beyond their “neutral” level to help constrain above target inflation.

Michael Hewson, chief market analyst at CMC Markets, said: “Market pricing of where the Fed funds rate is likely to be at year end is 2.5%, which could well be where the neutral rate is. However various policymakers have differed about where the real level actually is.”

Hewson expects the FTSE 100 index to open unchanged at 7522.

The price of Brent crude, meanwhile, continues to see upward pressure after edging up another 0.6% to close to $115 a barrel.

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