Future warns of mixed trading conditions, Severn Trent raising £1bn for investment
London open
The FTSE 100 is expected to open 21 points higher on Friday, having closed up 0.11% on Thursday at 7,601.85.
Stocks to watch
Specialist media firm Future held annual earnings guidance on Friday despite volatile markets, but warned that trading conditions remain mixed. Audience numbers stabilised in the second-half and the group had positive month-on-month momentum in the final quarter, Future said in a trading update for the year to September 30, 2023. As a result, adjusted operating profit is expected to be in line with the company's own compiled forecasts of £254.1m, "delivering a resilient performance despite continued macroeconomic volatility impacting our sector".
Severn Trent unveiled its business plan for the next regulatory period on Friday, from 1 April 2025 to 31 March 2030, committing to a record £12.9bn in total expenditure. The FTSE 100 water firm said it aimed to address environmental and customer concerns, targeting a 30% reduction in storm overflow spills and pollution, and a 16% decrease in leakage. It launched a £1bn equity placing at the same time to support the investment.
Rathbones chief financial officer Jennifer Mathias is stepping down at the end of the year to become group chief of staff to support the integration of Investec Wealth & Investment Limited (IW&I), the company said on Friday. The board said it had appointed Iain Hooley as Mathias's successor, subject to regulatory approval. Hooley was finance director of IW&I UK for more than a decade and was appointed CEO of IW&I UK in February this year and these responsibilities will continue during the integration period.
Newspaper round-up
UK households are facing an average tax rise of £3,500 a year by the next election, the country’s leading economics think tank has said – the biggest increase over a parliament on records dating back more than 70 years. The Institute for Fiscal Studies (IFS) said that on current forecasts the Conservatives were on track to raise £100bn more annually by 2024 than if taxes as a share of national income had stayed the same as in 2019. – Guardian
The average income of Deloitte’s more than 640 equity partners in the UK rose to £1.1m this year, despite a recent slowdown in spending and company deals. Deloitte UK said revenue grew 14% to £5.6bn in the year to May, as buoyant markets in the first six months of its financial year bolstered demand for audit and advisory work. It helped offset the “increased caution” among more cash-strapped clients and a slowdown in merger and acquisition activity in the months that followed. – Guardian
Thousands of Apple customers have complained the company’s “aerospace grade” titanium-clad iPhone 15 Pro handsets are overheating, just days after they bought them. Buyers of Apple’s iPhone 15 Pro, which starts at £999, and the larger iPhone 15 Pro Max, which costs £1,119, have complained on customer forums, Twitter and Reddit that the devices are getting too hot to hold when conducting video calls, playing games or listening to music. – Telegraph
BNP Paribas has told staff that it is using data from entry-gate swipes and logins to its computer network to track whether they are hitting targets on working from the office. The French bank told its staff in London that the policy was “not a question of trust”, but that changes would allow it to identify and support workers who were finding it difficult to meet on-site working requirements. – The Times
The chairman of Hipgnosis Songs Fund is to step down as the music investment company seeks to shore up shareholder support ahead of critical votes to determine its future. Andrew Sutch, the chairman since 2018, plans to retire amid attempts to win investor backing to continue the company. Another non-executive also intends to go. – The Times
US close
US stocks put in decent gains on Thursday despite a mixed bag of economic data, as bond yields fell back from their recent highs.
The Dow Jones Industrial Average rose 0.4%, while the S&P 500 gained 0.6% and the Nasdaq increased 0.8%.
The 10-year US Treasury yield eased to 4.596% on Thursday, down from an earlier high of 4.647% – a fresh 16-year high on the back of recent resilient economic data and expectations that inflation may remain sticky for some time yet.
A sell-off in government bonds has weighed heavily on stocks in recent weeks – the S&P 500 has fallen by 5% so far this month – as yield levels come worryingly close to forward earnings yields on equity markets.
The forward earnings yield on the S&P 500 is around 5.5%, which leaves just 0.9 percentage points between that and current 10-year Treasury yields – the lowest spread since the early-2000s.