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FTSE 100 Live: FTSE closes at 7484, French bank raids, Next buys Cath Kidston

 (Evening Standard)
(Evening Standard)

London’s main share index rose in morning trade, with banks once again keeping prominent slots on the leaderboard. However, much of the rally fizzled out as the day went on amid tax raids of a number of French banks, leaving the FTSE around where it started the day.

Elsewhere, Bank of England Governor Andrew Bailey appeared before MPs on the rescue of the UK arm of Silicon Valley Bank.

Investors were absorbing trading updates from Ocado, as well as full-year results from housebuilder Bellway and Irn Bru maker AG Bell.

But there were signs that inflation may yet to have peaked from shop price data from the British Retail Consortium.

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17:23 , Simon English

Top City PR firm sold for £20m

CAMARCO, a City PR firm behind some of the top names in finance and politics, is being sold to American giant APCO Worldwide.

No fee has been disclosed but the deal is likely to be worth around £20 million, with the three founding partners the biggest beneficiaries.

They are Geoffrey Pelham-Lane, Billy Clegg and Ed Gascoigne-Pees, who all came from FTI Consulting.

Insiders were keen to stress that all 40 staff have stakes in the business and will get a pay-out.

APCO is one of the biggest PR firms in the US with 1100 staff in 32 offices across the world.

Camarco’s clients include Lord Peter Cruddas, the founder of CMC Markets, and activist investor Elliott Investment Management.

This is just the latest deal of several in the UK PR industry that has seen big players take over smaller firms as clients demand a wider, more global perspective.

Camarco CEO Geoffrey Pelham-Lane said: “APCO and Camarco share a host of common values, including our client-centric commitment  and belief in the power of highly collaborative teams.”

He added: “We have pursued the principle of employee ownership right from the start, and equity was widely distributed with every member of the Camarco team benefiting.”

Next buys Cath Kidston brand in rescue deal, but will close remaining shops

17:11 , Daniel O'Boyle

Clothing giant Next has bought the brand, website and intellectual property of Cath Kidston after it was placed in administration, but it will close the remainder of the vintage-themed homeware company’s shops.

Administrators Zelf Hussain and Rachael Wilkinson of PWC arranged the sale of the homewares and lifestyle brand, which is known for its floral designs.

Hussain said the pandemic and cost-of-living crisis were both major challenges for Cath Kidston to navigate.

Read more here

FTSE closes at 7484

16:36 , Daniel O'Boyle

The FTSE 100 finished the day at 7484.25, representing modest gains for the day after much of its early-morning improvement was wiped out.

The index of blue-chip companies started strong, quickly rising to 7521 after opening. However, a rally fizzled out as the day went on, and the FTSE dropped back to where it started the day soon after reports authorities raiding a number of French banks.

Despite dipping into negative territory in the early afternoon, the index did pick up slightly late in the day, finishing at 7484.25.

Despite shares initially rising on the back of a trading update, Ocado ended up as the day’s biggest faller, with shares down 2.5%.

British Airways owner IAG was the top riser, gaining 3p to 140.3p.

S&P 500 and Nasdaq down, but Dow steady

16:01 , Daniel O'Boyle

Most US shares have declined this morning, but the very largest New York-listed firms have been faring better.

While the S&P 500 is down 0.3% to 3964, the Dow Jones has ticked up by 13 points since opening, at 32,445. The Nasdaq, meanwhile, is down 0.9% to 11662.

Cruise businesses Carnival and Royal Caribbean have been among the top gainers so far today, but it’s been a tougher day for microchip manufacturers Qualcomm and AMD.

Sunak: UK ‘can’t be complacent about inflation'

15:55 , Daniel O'Boyle

Rishi Sunak is being questioned by senior MPs on a number of subjects including the economy.

On his plan for inflation, he says: “We are making progress but particularly with combatting inflation we can’t be complacent.

“It’s important we stick to the plan and if we do so then we will bring inflation down. You must have fiscal discipline and act on the supply side of the economy to ease some of those inflationary pressures.

Read more here

Strong demand for Christmas beauty products drives Boots sales higher

15:50 , Daniel O'Boyle

Strong demand for beauty products over Christmas helped Boots record a jump in sales over the past quarter.

The pharmacy and retail business revealed that overall sales rose by around 11% in the UK over the three months to February 28, driven by its retail arm.

It came as US parent firm Walgreens Boots Alliance saw its quarterly profit slide by more than 20%, largely due to a sharp drop in volumes of Covid-19 vaccines and tests.

The answer to London’s listing woes? Founders will always follow the money

14:33 , Daniel O'Boyle

For all Jeremy Hunt’s Budget day promise to “make the London Stock Exchange a more attractive place” to go public it is impossible to legislate against one giant block on progress: founders simply don’t want to list their companies here.

Streamline prospectuses, crank up voting rights, soften governance rules, bring back independent equity research - none of that matters unless the culture changes, upwardly mobile entrepreneurs say.

If they must lift the veil of private finance, they look straight past Paternoster Square to the bright lights of Wall Street, where the microchip designer Arm will hunt for fresh backers later this year. Early-stage UK tech investors even describe their portfolio companies as “Nasdaq-ready” when the time comes to widen the share register.

Unable to source the growth capital from unadventurous pension funds at home, founders are fleeing stateside, where the media is easily moulded, analysts all have brilliant minds and market optimism is indefatigable.

Except that isn’t exactly right...

Read more here

US shares to open slightly lower

14:11 , Daniel O'Boyle

US shares are set to open slightly lower today, after a rebound in European shares fizzled this morning.

Dow Jones futures are down 0.1% at 32587, while S&P 500 futures dipped by 0.2% to 3999.75. Nasdaq index futures are down 0.2% to 12766.

Among the biggest premarket fallers are tech retailer Best Buy and natural gas business the Williams Companies.

New female chief at Diageo

13:47 , Simon English

THE number of female bosses in the FTSE 100 is soon to hit double figures for the first time.

Today Diageo said Sir Ivan Menezes will stand down as CEO after a decade at the helm of the drinks giant behind Guinness, Smirnoff, Baileys and Johnnie Walker.

He will be replaced on July 1 by his chief operating officer Debra Crew, a graduate of the University of Denver, who holds an MBA from the University of Chicago Booth School of Business, and previously served as an officer in the United States Army.

Crew has previously worked at Kraft Foods, Mars and Pepsi.

She said: “Diageo in a very strong position for future growth and I look forward to working with our teams around the world to capture the opportunities ahead.”

When she takes over she will be the 10th FTSE 100 female boss. The other nine are Milena Mondini-de-Focatiis of the Admiral Group, Amanda Blanc of Aviva, Alison Rose of NatWest Group, Anne Farlow of Pershing Square Holdings, Liv Garfield of Severn Trent, Emma Walmsley of GlaxoSmithKline, Linda Cook of Harbour Energy. Jennie Daly of Taylor Wimpey’s Jennie Daly and Jette Nygaard-Andersen, boss of Ladbrokes owner Entain.

Read more here

French banks fall amid tax raids

12:20 , Daniel O’Boyle

Shares in a number of French banks fell following reports that the country’s financial prosecutor is searching

Société Générale, HSBC, BNP Paribas, Exane and and Natixis are being searched as part of a tax fraud probe, according to the National Financial Prosecutor’s Office.

Having started the day strongly before the news broke, shares in Société Générale are now down 1% to €19.78 and BNP Paribas shares are down 0.4% to €51.59. HSBC shares are still up for the day, but are down 2p since the report of the raid.

FTSE 100 falls to the flatline with US futures trade pointing to opening losses in New York

12:03 , Michael Hunter

London’s main stock index hit the flatline for the day into afternoon trade, as falls for real estate stocks knocked the market and the wider mood became more cautions into the start of US trade.

With Wall Street futures pointing to modest opening losses in New York, the FTSE 100 cooled, to stand unchanged for the day at 7471.16, losing momentum from an earlier rally led by banks.

Housebuilders fell after news of a dip in profits at Bellway Homes. Real estate investment trusts were also weaker, with Segro down 13p at 704p and British Land Company fell 3p to 363p.

There was an eye-catching fall for Ocado after the online retailer and e-commerce platform’s trading update. Its shares were down 22p to 430p, which left it down almost 5% in the single biggest drop of the morning.

Team17 shares plunge as long-time boss Bestwick departs

11:42 , Daniel O'Boyle

Shares in video game developer Team17 plunged today as long-time chief executive Debbie Bestwick announced her departure.

Bestwick served as CEO of the developer - best known for the Worms series - since leading a management buyout from then-parent company Microbyte.

“This has probably been the hardest decision I've made, but I wouldn't have made it if I wasn't confident in the succession plans and the leadership team's ability to deliver the clear and focused strategy regarding our collective goals and ambitions,” Bestwick said. “Ultimately, I want to spend more time with my children who have made sacrifices many times during my career and specifically to spend more time with my youngest before he goes to university.”

The business also announced its 2022 financial results today, with profit rising by 53% to £69.6 million.

Team17 shares are down 8.7% to 405.25p.

FTSE 100’s rally eases as investor hoist the for-sale sign over house builders

11:08 , Michael Hunter

London’s FTSE 100 stayed positive in late-morning trade, but pressure on housebuilders after news of falling profits in the sector knocked its stocks.

Bellway Homes, a member of the FTSE 250 rather than the top-tier index, reported a 5% drop in underlying profit of £312 million and said it would increase the proportion of affordable homes it builds. Its stock fell 20p to 2019p, even after it also pledged to return cash to investors via a £100 million share buyback.

Fellow housebuilders on the blue-chip index moved lower after Bellway’s updarte, adding to to the limits on the FTSE 100’s overall gain. Barratt Developments slipped 4.5p to 445p. Taylor Wimpey lost 1p to 116p. Rightmove, the online estate agency, was 8.2p weaker at 543p.

Overall, the main London stock index stayed 12 points higher, at 7,483.82, lent support by a recovery in the financial sector and among oil majors.

The mid-cap FTSE 250 fell overall, by 120 points to 18409.15, a drop of 0.7%.

Bailey: HSBC was only reasonable bidder for Silicon Valley Bank UK

11:05 , Daniel O'Boyle

Bank of England governor Andrew Bailey said HSBC was effectively the only bidder remaining for failed lender Silicon Valley Bank’s UK arm once the sale process got fully underway.

The Bank boss faced questions from the Treasury Committee today after tech-focused Silicon Valley Bank collapsed in the US earlier this month, which then led to the collapse of its UK arm before HSBC ultimately acquired it for £1.

The governor said that once the actual selling process got underway, HSBC had the only viable bid. Other prospective bidders, he said, either never submitted a firm offer or attached terms and conditions that the Bank couldn’t agree to.

Read more here

Andrew Bailey: Bank of England only became certain of SVB UK sale hours before announcement

10:16 , Daniel O'Boyle

Bank of England governor Andrew Bailey said that the Bank of England only became certain that a sale of Silicon Valley Bank would happen three hours before it was announced.

Bailey is currently facing questions from the Treasury Committee about the collapse of Silicon Valley Bank UK. When asked why the Bank said it was set to place SVB UK into insolvency first before later announcing a sale to HSBC, he said he only became sure a sale could occur at the very last minute.

“We could not guarantee that a sale would take place until about 4am going into Monday,” he said.

Home reservations slump for Bellway, but buyers adjust to higher rates in 2023

09:39 , Daniel O'Boyle

Housebuilder Bellway saw private home reservation rates slump by more than 40% in 2022, but its CEO said trading has picked back up in 2023 as buyers get used to a new normal for mortgage rates.

Profit dipped by 2.1%, partly due to what CEO Jason Honeyman called “challenging operating and trading conditions in the period”.

Bellway’s reservation rate was down by 31.7%, with the rate for private homes falling even faster, at 43.8%, prompting the company to accelerate the building of social housing instead. This, it said, was mostly due to “elevated mortgage rates” immediately after Kwasi Kwarteng’s devastating mini-Budget, as well as the end of help-to-buy schemes.

Read more here

Rampant inflation still hurting margins, says Irn Bru maker Barr

09:37 , Simon Hunt

AG Barr today sounded a note of caution over continued threat posed by inflation after the Irn Bru maker saw its profit margins squeezed.

The North Lanarkshire-based business said it had seen “rampant inflation” in the year to the end of January which caused its operating margins to fall 1.3 percentage points to 13.6%.

Barr boss Roger White said: “We’re definitely still seeing inflationary pressure, whether that’s in the cost of materials or food. It’s not just our teams that are seeing it but also our supply base.

“It’s pretty much as we had assumed – we called it last year that the impact of inflation would last longer than some were anticipating.”

It comes as hopes inflation had peaked were dealt a blow by fresh figures out from the British Retail Consortium after food inflation in February hit 15% in March, up from 14.5% a month earlier.

Barr posted an 18% jump in sales over the year to £318 million, while pre-tax profits rose 5.2% to £44.4 million.

Revenue growth was led by a 20% jump in sales of fruity pop drink Rubicon, while sales of the iconic Irn Bru brand rose 6%, including a 15% climb in demand for in energy drinks.

Oat milk brand Moma bucked the broader decline in demand for plant-based products with a 40% jump in sales, while turnover at take-home cocktail brand Funkin climbed 16%.

The company also bid goodbye to 85-year-old Robin Barr, who announced his departure from the board after a 58-year stint, one of the longest in FTSE history. He will be replaced by daughter Julie Barr, who currently serves as the company secretary.

AG Barr shares dipped 1.5% to 534p.

 (Barr)
(Barr)

Tui shares hit again as cut-price rights issue keeps taking a toll; Carnival heads south after update

08:41 , Michael Hunter

London-listed shares in the German tour operator Tui stayed under heavy pressure after the heavily discounted rights issue being held to repay Covid-era government aid continued to knock the stock.

It was down a further 22p on Tuesday to 708p, taking the stock to its lowest since December 2022. It was the biggest single faller on the FTSE 100, which was rising overall.

Fellow tourist stock Carnival also headed south after the London stock in US cruise operator sounded a downbeat tone for the second quarter alongside results issued in New York yesterday. Its shares were 13p lower at 639p.

Utilities and defensive stocks take a hit as FTSE 100 pushes ahead overall

08:26 , Michael Hunter

Stocks with defensive properties were taking a hit as London’s stock market rose overall and investors continued to buy back into financial and retail stocks.

United Utilities fell 19p to 1017p, with Centrica, the owner of British Gas, down over 1p to 102p. Severn Trent dropped 7p to 2800p. Silver miner Fresnillo fell 6p to 716p.

FTSE 100 opens higher as banks lend support for a second consecutive session; Ocado rallies

08:10 , Michael Hunter

London’s main share index set course for a second consecutive dat of gains, as the relief rally held in the banking sector.

Barclays. NatWest, Lloyds Banking Group and HSBC all made further gains, of between 1% and 2% apiece.

Overall, the FTSE 100 added 52 points to 7523.60, a rise of 0.7%.

Ocado made the best single gain, up 21p to 475p after it posted a 3.4% rise in retail revenue to £584 million.

Shop prices on a ‘sugar high’ and yet to peak says British Retail Consortium

07:40 , Michael Hunter

Hopes that inflation may have peaked in the UK have been dealt a blow by fresh figures out from the British Retail Consortium.

The industry group said prices were on a “sugar high” and had yet to peak, not least because of the rising cost of sweet treats into Easter.

Helen Dickinson, the BRCs chief executive, said: “As Easter approaches, the rising cost of sugar coupled with high manufacturing costs left some customers with a sour taste, as price rises for chocolate, sweets and fizzy drinks increased in March.”

Overall, food inflation in February hit 15% in March, up from 14.5% a month earlier, while the figure for fresh food hit a record 17%, up from 16.3%.

Dickinson added: “Shop price inflation has yet to peak,” but predicted that “food prices will likely ease in the coming months particularly as we enter the UK growing season, but wider inflation is expected to remain high.”

Baskets get smaller at Ocado

07:30 , Simon Hunt

Shopping baskets are getting smaller at Ocado as customers pare back their online order budgets amid steep price rises.

Average basket sizes fell 7.5% in the first 13 weeks of 2023 amid an 8.3% rise in the average selling price of items bought, but shoppers appear not to have abandoned online grocery ordering after the pandemic, with active customer numbers rising 13.8% over the period. The firm posted a 3.4% rise in retail revenue to £584 million.

Hannah Gibson, Ocado Retail’s Chief Executive Officer, said: “While the trading environment remains challenging, we expect to build momentum through the second half of the year, as we improve our proposition, grow our customer base, and no longer lap Covid shopping behaviours [which] will enable us to return to sales growth and profitability.”

William Hill to pay record penalty for social responsibility failings

07:16 , Daniel O'Boyle

Three gambling businesses owned by William Hill will pay a total of £19.2 million for “widespread and alarming” social responsibility and anti-money laundering failures, the Gambling Commission has announced.

The “settlement” is the largest penalty in the Gambling Commission’s history.

WHG (International) Limited, which runs williamhill.com, will pay £12.5 million; Mr Green Limited, which runs mrgreen.com, will pay £3.7 million; and William Hill Organisation Limited, which operates 1,344 gambling premises across Britain, will pay £3 million.

Williamm Hill was acquired by 888 last year for £1.95 billion. The price had been £2.2 billion, but was renegotiated after it was revealed that the bookmaker was the subject of a Gambling Commission investigation.

Read more here

Diageo CEO quits after 10 years

07:14 , Simon Hunt

The boss of Diageo is to quit after a decade at the helm of one of the world’s biggest spirit-makers.

Sir Ivan Menezes, who joined the Jameson and Tanqueray maker through the merger of Guinness plc and Grand Metropolitan plc in 1997, is to be replaced by Chief Operating Officer Debra Crew, a graduate of the University of Denver, who holds an MBA from the University of Chicago Booth School of Business, and previously served as an officer in the United States Army.

Crew said: “I am delighted to be appointed Chief Executive Officer of Diageo. Ivan leaves Diageo in a very strong position for future growth and I look forward to working with our teams around the world to capture the opportunities ahead.”

Relief rally has further to run with FTSE 100 on course for opening gains

07:07 , Michael Hunter

London’s FTSE 100 and its continental European peers are on course for opening gains, with the relief rally led by financial stocks looking like it has further to run according to spread betting companies.

According to CMC Markets, the main London stock index will rise by around 30 points to 7501, with a rise of 54 points to 15181 on the cards in Frankfurt for the Xetra Dax 30. Paris’s CAC 40 is expected to add 27 points to 7105.

Overnight in the US, the S&P 500 rallied for the third straight session, while the tech-heavy Nasdaq Composite slipped overall.

Attention will move back to the recent turbulence in the banking sector when Andrew Bailey, the governor of the Bank of England, appears before the Treasury Select Committee in West Minister to give evidence on the recent rescue of Silicon Valley Bank.

The collapsed US lender’s UK arm was bought by HSBC after a dramatic weekend intervention from regulators and the government.

Recap: Yesterday’s top stories

06:53 , Simon Hunt

Good morning. Here’s a summary of our top stories from yesterday.

  1. Failed technology financier Silicon Valley Bank was taken over by First Citizens in a deal that will cost about $20 billion but offered hope that the crisis of confidence in the global banking system could be easing.

  2. Changpeng Zhao, the CEO of crypto company Binance, has been sued by US regulators over alleged breaches of trading rules.

  3. Bank of England Governor Andrew Bailey said the impact when the UK came out of the Covid-19 pandemic was “different” to what many experts had predicted ahead of time.

Today we’re expecting results from:

  • Bellway

  • Barr

  • Darktrace

  • Softcat

  • Team17