Homeserve interim profits rise, Severn Trent reports 'robust' first half
London open
The FTSE 100 is expected to open 19 points higher on Tuesday, having closed down 0.12% on Monday at 7,376.85.
Stocks to watch
Home repairs provider Homeserve reported a rise in interim profits despite the cost-of-living crisis. The company, which is about to be taken over by assert manager Brookfield in a £4bn deal, posted a 19% rise in pre-tax profit to £22.4m.
Severn Trent reported a “robust” first half on Tuesday, with group profit before tax and interest up 2.4% year-on-year to £261.7m, after a £103.6m rise in turnover to £1.06bn. The FTSE 100 water company hiked its property PBIT guidance by a further £50m, with planned PBIT from sales of surplus land now £150m between 2017 and 2032. Adjusted basic earnings per share fell to 29.9p for the six months ended 30 September, however, from 54p, as a result of its PBIT growth being offset by the impact of inflation on index-linked debt. Basic earnings per share were 31.4p, swinging from a loss of 73p.
Newspaper round-up
Penguin Random House, the world’s largest book publisher, and rival Simon & Schuster have scrapped a $2.2bn deal to merge, Penguin’s owner said in a statement on Monday. Bertelsmann, a German media group which owns Penguin, initially said it would appeal a US judge’s decision that said its purchase of Simon & Schuster would be illegal because it would hit authors’ pay. – Guardian
UK restaurants are going bust at a faster rate than during the Covid crisis owing to a “toxic mix” of surging energy costs, staff shortages and falling bookings. Closures in the sector rose by 60%, with 1,567 insolvencies over 2021-22, up from 984 during 2020-21, according to a study by the advisory firm Mazars. The figure includes 453 over the past three months, up from 395 in the previous quarter. – Guardian
Shell is reviewing plans to invest £25bn in Britain’s energy system after Jeremy Hunt raided the industry for £55bn in windfall taxes. David Bunch, Shell’s UK chairman, said the expanded levy announced in the Chancellor’s Autumn Statement is forcing the company to re-examine a slew of projects in the pipeline, from North Sea investments to renewable energy schemes. – Telegraph
Waitrose is putting heat pumps in all its supermarkets as it brings forward net-zero plans in an effort to tackle spiralling energy prices. The company said it was replacing the gas boilers that have been heating its 332 stores with electric heat pumps. These require less electricity to run, and work by extracting heat from the air outside. – Telegraph
The Bank of England has delayed plans to move hundreds of staff from London to Leeds as the wider economic turmoil slows the institution’s plans to expand its operations outside the capital. Plans to strengthen Threadneedle Street’s northern hub have been delayed by at least a year as the central bank scales back ambitions to increase its presence across the UK. – The Times
US close
Wall Street stocks were in the red at the close of trading on Monday as fears that the Chinese government may reintroduce Covid-19 containment measures saw the holiday-shortened trading week kick off with losses.
At the close, the Dow Jones Industrial Average was down 0.13% at 33,700.28, while the S&P 500 lost 0.39% to 3,949.94 and the Nasdaq Composite saw out the session 1.09% weaker at 11,024.51.
The Dow closed 45.41 points higher on Monday, taking a modest bite out of gains recorded in the previous session.
News that China had reported its first mainland Covid deaths since May over the weekend also weighed on sentiment, prompting fears that the Asian superpower may again reintroduce restrictions aimed at stemming the spread of the virus.
Retail earnings will again be in focus this week, with Best Buy, Nordstrom, Dick's Sporting Goods, and Dollar Tree all set to report before the end of the week.