Yahoo Finance FTSE 100 Live: Lloyds profits grow, shares slightly higher
The FTSE 100 is slightly higher today, but the FTSE 250 is still down close to 1%, having lost more than 10% since mid-February.
It comes as banks including Lloyds reported results, with the UK's biggest lender reporting a big rise in profits.
London-listed AI firm rallies on stock market debut
Wednesday 25 October 2023 16:35 , Michael Hunter
There was a sharp rally on the stock market debut of the latest AI company to list in London.
Cykel AI – a natural language processing specialist – raised gross proceeds of £1.75 million when it went public on the Aquis Exchange in the City this morning with a market value of £6.2 million.
Its shares were up 200% on day one, taking its market cap to around £20 million, in a sign of the demand from investors for firms that can help business use the latest tech, including machine learning, to handle back office tasks from filling in spreadsheets to booking meeting rooms.
City Voices: Bankers need bigger bonuses: Sunak is right to scrap the cap
Wednesday 25 October 2023 15:58 , Simon Hunt
There is only one group less popular than politicians: bankers. So the decision by Rishi Sunak to scrap the banker bonus cap is certainly a bold one. But it is also the right one.
Scrapping the cap will be good news for the City. While this is a difficult sell to the general public, banking and finance is one of the country’s most important services industries. It creates and supports high-paid jobs, attracts investment into the country, and raises a significant amount of revenue for the Treasury to spend on essential public services.
Moreover, it provides the necessary capital and expertise to help both large and small businesses all over the country. As such, it is right that politicians support the City rather than penalise it in order to score political points.
One in four of us use loans to cover day-to-day spending
Wednesday 25 October 2023 15:47 , Daniel O'Boyle
One in four Brits are rely on credit to cover essential spending, new research shows, in a worrying sign for the consumer economy.
And one in 10 customers admit they have exaggerated their income in a desperate search for new loans.
Tink, the open banking data group, says a survey of 1000 UK borrowers - those who hold either a mortgage or loan - suggest that a significant number of Brits today need to find a way to bridge the gap between income and expenditure each month.
Nearly one in three (29%) respondents run out of money before the end of each month, many are using credit (25%), instalment or delayed payment options (23%), and loans (16%) to cover essential costs.
Frasers cuts ASOS stake
Wednesday 25 October 2023 15:12 , Daniel O'Boyle
Mike Ashley’s Frasers Group has cut its stake in online fast fashion retailer ASOS from 23% to 19%, after having repeatedly increased its shareholding in recent months.
Frasers bought ASOS shares at a low price after they tumbled in May, but they failed to pick back up as the fashion sector was hit by unseasonal weather.
Yesterday, ASOS pushed its results back by a week to allow auditors at PwC more time “to complete its planned testing”,
ASOS shares are down 1.8p to 390.9p today. They’re down 2.6.6% for the year and more than 90% since 2021.
Frasers also revealed this morning that it had increased its stake in ASOS rival Boohoo again.
US market snapshot: Stocks fall
Wednesday 25 October 2023 15:06 , Daniel O'Boyle
The S&P 500 is down 1% and the Nasdaq 1.5%, with Google among the big fallers after its results last night.
Take a look at our full Wall Street snapshot.
Which shops are coming back? Paperchase in Tesco and HMV reopens in Oxford Street
Wednesday 25 October 2023 13:33 , Daniel O'Boyle
A few high-street retailers have failed to keep a presence on the high street in recent months but it's all about to change for some of the most loved names.
Sephora recently re-entered the UK market, following a 17-year hiatus during which supporters waited in seven-hour lines to see the new Westfield London store.
The beauty retailer has already announced the opening of a second store in Westfield Stratford City.
Which other retailers are going to take the same steps as Sephora in upcoming months?
Market snapshot: FTSE 100 slightly higher
Wednesday 25 October 2023 12:20 , Daniel O'Boyle
Take a look at today's market snapshot with shares now slightly higher for the day.
Poundland plans 75 store openings or relocations in bumper quarter
Wednesday 25 October 2023 11:50 , Daniel O'Boyle
Discount store chain Poundland has said it will have its largest ever three-month growth programme, with 75 shops either opening or relocating.
The plans between late September to the end of December cover both its existing pipeline of new shops, and the former Wilko branches it has already opened, or plans to open, as new Poundland sites.
Austin Cooke, Poundland’s managing director said: “We’re working at this pace because we’re on a mission –ambitious to grow, create jobs and serve new communities by opening shops customers and communities can be proud of.”
The company was one of a handful of retail businesses to acquire part of the Wilko estate following the homeware retallier entering administration in August.
Poundland, part of Pepco Group, currently has over 800 stores in the UK and the Republic of Ireland.
Essentra adds to FTSE 250 weakness, FTSE 100 steady
Wednesday 25 October 2023 10:29 , Graeme Evans
London’s underperforming FTSE 250 index today fell another 1% or 166.50 points, meaning it is down 11% since mid-September at 16,827.60.
In contrast, the FTSE 100 index index is less than 4% lower over the same period as heavyweight stocks including Rio Tinto, AstraZeneca and BAE Systems today helped the top flight rise 1.94 points to 7391.64.
The slide in the FTSE 250 follows a confidence-sapping run of profit warnings, with shareholders of building firm Vistry and newly-listed money transfer business CAB Payments this week’s casualties.
Components firm Essentra delivered today’s biggest fall, dropping 8% or 11.8p to 135.8p after forecasting 2023 profits towards the lower end of expectations.
The UK-based company, which supplies the vehicle, electronic and medical industries among others, said third quarter like-for-like revenues fell 7.1% in the third quarter as market conditions softened in Europe and the Middle East.
Broker Peel Hunt called it a resilient performance and said it retained confidence in medium-term prospects after backing shares to recover to 300p.
Other stocks on the FTSE 250 fallers board included Aston Martin Lagonda, with today’s drop of 9p to 210.2p meaning the luxury car maker has reversed 20% in a month.
Magazine publisher Future also retreated 35p to 843.5p, while CAB Payments fell another 6% or 3.6p on top of yesterday’s 72% slump to trade at 57.2p. It floated in July at 335p.
One bright spot came from Microsoft reseller Bytes Technology, which rallied 3% or 15.6p to 469.6p after reporting a 14% rise in half-year operating profits to £33.9 million.
Despite the economic backdrop, Bytes continues to see strong demand from corporate and public sector customers for security, cloud adoption and digital transformation services. Analysts at Jefferies described the update as reassuring as they highlighted a price target of 560p.
Lloyds ups forecasts for UK economy
Wednesday 25 October 2023 10:06 , Simon English
LLOYDS BANK doubled its forecast for UK economic growththis year and insisted that consumers remain resilient in the face of gloomypredictions for the jobs market and global political strife.
Britain’s biggest high street bank thinks the economy willgrow by 0.4% this year and by 0.5% next, up from earlier predictions of 0.2%and 0.3%.
While that is, as Lloyds chief financial officer WilliamChalmers admitted, a “pretty modest set of adjustments” they will be welcomedby the government and the Bank of England given the bank’s market power – it isseen as a barometer for the UK economy.
That uplift comes as Lloyds made profit of £4.3 billion forthe first nine months of the year, up 46%.
There is an impairment charge of £849 million which hintsat consumer distress levels, but Chalmers insists customers are managing theirfinances well, moving swiftly to better savings and loans deals when theybecome available.
It claims to save customers £200 a month on average bymoving them to better mortgage rates.
It also admitted, as the owner of the biggest mortgagelender Halifax, that UK house prices are likely to keep falling this year andnext before recovering in 2025
Lloyds’ predictions and figures don’t entirely tally withother reports. The latest figures from the Office for National Statistics indicatethat job vacancies are down, while unemployment and redundancies are up.
IG Design Group toasts profit growth but sees lower Christmas order levels
Wednesday 25 October 2023 10:05 , Joanna Hodgson
A manufacturer of wrapping paper, christmas crackers and cards stocked on scores of UK supermarket and high street shelves, today warned retailers have put in lower order levels for the festive period.
AIM-listed IG Design Group, which also makes gifts and hobby craft kits, said the reduced order quantities has been guided by “lower customer expectations”.
That, coupled with factors such as more normal ordering conditions compared with the pandemic years when supply chain disruption forced retail clients to buy products much earlier, contributed to first half sales being lower than the same period in 2022.
But shares in the group which sells goods globally leapt 15%, or 16.9p to 129.4p, after IG Design Group said efforts to improve operational efficiency have progressed and it saw “significant” growth in profit and margin in the six months to September 30.
In addition, net debt is significantly lower than a year ago. Full year results to March 2024 remain in line with expectations.
Worldline shares collapse after firm slashes forecasts
Wednesday 25 October 2023 09:50 , Simon Hunt
Worldline has become the latest payments firm to see its share price tumble after it missed estimates and pared back its earnings forecast.
The French firm, which operates much of the TfL payments operations in London, saw its shares tank almost 60% after it slashed its full-year targets and said it had cut ties with some merchants to reduce the risk of cybercrime.
Analysts at JPMorgan said: "Worldline missed sales estimates in every division...These results are a disappointment in terms of the full-year miss and also that long-term targets have been discarded."
It comes after London payments firm CAB slashed its earnings forecasts yesterday as it warned of a drop-off in demand, causing its shares to tumble more than 70%.
Santander UK warns over hit to borrowers from higher-for-longer rates
Wednesday 25 October 2023 09:42 , Daniel O'Boyle
High street lender Santander UK has cautioned that higher-for-longer interest rates will take their toll on households and businesses as it revealed increases in some borrower arrears.
The Spanish-owned group said that while arrears overall remain at low levels, it had seen a slight uptick across mortgages, unsecured personal loans and overdrafts in recent quarters.
It cautioned that house prices are expected to fall by 7% this year and 2% in 2024, with mortgage applications down after a flurry of interest rate hikes and falling property values.
Banking stocks continue to struggle, FTSE 250 down 0.7%
Wednesday 25 October 2023 08:47 , Graeme Evans
Lloyds Banking Group shares have fallen below the 40p threshold, despite the lender reiterating full-year guidance in today’s third quarter update.
The widely-held stock retreated another 2% or 0.7p to 39.9p, having fallen yesterday on the back of Barclays trimming net interest margin guidance in the UK. The latest selling for Lloyds followed disappointment in the City at the lack of share buybacks alongside today’s figures.
Barclays lost another 1% or 1.5p to 133.2p, while NatWest fell 1.8p to 206p ahead of its trading update on Friday.
The wider FTSE 100 index returned to the red with a fall of 15.99 points to 7373.71, with Reckitt Benckiser down 134p to 5782p despite launching a £1 billion share buyback.
The blue-chip risers board is topped by Rio Tinto after a gain of 72p to 5132p, while accounting software firm Sage added 9p to 959.8p.
In the FTSE 250 index, which has fallen another 0.7% or 119.06 points to 16,875.04, components firm Essentra and brickmaker Ibstock retreated 8% and 3% respectively following their trading updates.
Lloyds Bank says UK economy improving slightly - on course to avoid recession
Wednesday 25 October 2023 08:34 , Daniel O'Boyle
Lloyds Bank, Britain’s biggest high street bank, thinks the UK’s economic position is modestly improving and that the nation remains on track to avoid a recession.
It thinks the economy will grow by 0.4% this year and by 0.5% next, up from earlier predictions of 0.2% and 0.3%.
While that is, as Lloyds chief financial officer William Chalmers admitted, a “pretty modest set of adjustments” they will be welcomed by the government and the Bank of England given the bank’s market power.
For the first nine months of the year Lloyds made profit of £4.3 billion, up 46%. There is an impairment charge of £849 million which hints at consumer distress levels, but Chalmers insists customers are managing their finances well, moving swiftly to better savings and loans deals when they become available.
Brick firm Ibstock: Resi construction market set to remain subdued
Wednesday 25 October 2023 08:22 , Joanna Hodgson
Brick maker Ibstock today cautioned residential construction markets are expected to remain subdued in the near term.
The building products manufacturer sells goods to builders merchants and housebuilders, and a number of these customers are impacted by the UK housing market slowdown.
Ibstock reported sales volumes in the third quarter were below what was achieved in the prior three months.
However, it added that cost reduction action combined with stable pricing resulted in margins for the quarter remaining robust.
Chief executive Joe Hudson said: “The group delivered a resilient performance in the third quarter despite a very challenging market backdrop.”
Hudson added: “As macroeconomic conditions stabilise, we expect a recovery in market activity, reflecting the significant underlying demand for new build housing in the UK. Whilst we are taking a cautious view around the pace and timing of this recovery, we remain confident in our ability to continue to respond to market conditions, taking the action necessary to protect performance, while ensuring the business remains well-positioned for an increase in activity.”
Heineken sales fall as prices rise
Wednesday 25 October 2023 08:19 , Daniel O'Boyle
Heineken sold less beer in the UK in the third quarter of the year, but higher prices meant that revenue remained steady.
The brewing giant, which also owns Birra Moretti and Desperados, said it pushed prices up by a “high single digit” percentage in Britain, which made up for a fall in sales volumes.
Globally, Heineken’s volume of beer sold fell by 4.2% to 6.32 billion litres , but prices were up by 9.5%. That meant revenue ticked up by 2% but profit fell by 13% to €1.9 billion (£1.7 billion).
CEO and chair Dolf van den Brink said: “Whilst inflation-led pricing is tapering, we observe a slowdown of consumer demand in various markets facing challenging macro-economic conditions. In this context, we will stay the course on executing our strategy, remain vigilant on costs and focus on rebalancing our growth.”
Reckitt Benckiser to launch £1 billion share buyback
Wednesday 25 October 2023 07:48 , Michael Hunter
FTSE 100 consumer goods giant Reckitt Benckiser today announced plans to return £1 billion to shareholders.
Its new CEO, Kris Licht, pointed to "strong cashflows and a healthy balance sheet" as he outlined the plans alongside third-quarter results.
Revenue in the period was £3.6 billion at the maker of Cillit Bang cleaning products and Nurofen painkillers, down 3.6% and narrowly under City expectations.
Sales at its nutrition unit, which makes Nutramigen and Enfamil baby food, fell by over 15% to £571 million.
But the Slough-based multinational stood by its forecasts for the full year.
Licht said:
""We are firmly on track to deliver our full year targets, despite some tough prior year comparatives that we continue to face in our US Nutrition business and across our ... portfolio in the fourth quarter."
Big moves for tech heavyweights, FTSE 100 holds firm
Wednesday 25 October 2023 07:21 , Graeme Evans
Tech giants Microsoft and the Google business Alphabet are set for contrasting moves when their shares resume trading on Wall Street later.
Microsoft rose 4% in dealings after the closing bell as the software company said first quarter revenues rose by a bigger-than-expected 13% to $56.5 billion.
In contrast, Alphabet fell 6% as lower-than-forecast cloud division revenues offset an otherwise robust earnings performance in the rest of the business in the third quarter.
Overall, Wall Street futures are pointing lower after US markets last night ended a five session losing run with the help of strong figures by Coca-Cola and social media platform Snap.
European markets also found positive territory yesterday as weaker-than-expected PMI figures dampened expectations of a further eurozone interest rate rise.
The FTSE 100 index closed 14.87 points higher and is forecast by CMC Markets to add another five points at 7394 this morning. Oil prices, meanwhile, have eased from their recent highs to stand at $87.54 a barrel.
Profitability turns sour at Virgin Wines
Wednesday 25 October 2023 07:21 , Simon Hunt
Virgin Wines swung to a loss in the year to the end of June as the drinks delivery service was hit by a slump in demand amid a return to pre-Covid shopping habits.
The Norwich-based business posted a loss of £0.7 million, down from a profit of £5.1 million in the previous year. Sales fell 15% to £59 million.
CEO Jay Wright said the company "has been a year affected by a number of challenges, from well-documented macroeconomic headwinds to a number of one-off, exceptional issues."
Recap: Yesterday's top stories
Tuesday 24 October 2023 22:18 , Simon Hunt
Good morning. Here's a summary of our top headlines from yesterday:
Barclays sees investment banking income fall but credit card division profits
Unemployment rate unchanged at 4.2% as labour market remains remarkably resilient in face of rate rises
Shares in fintech firm CAB payments plummet as it cuts revenue outlook by 17% amid sudden market downturn
Hipgnosis says it has received no better offers for its songs fund as it seeks to placate shareholders
Sofa maker ScS bought by Italian furniture brand Poltronesofa for £99 million
And...why Bitcoin prices have doubled since the start of the year.
