AB Foods returning £500m to shareholders, Beazley flags robust profit

London open

The FTSE 100 is expected to open 14 points lower on Tuesday, having closed up just 0.0004% on Monday at 7,417.76.

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Food, ingredients and retail conglomerate Associated British Foods is returning another £500m to shareholders as it reported double-digit growth on both the top and bottom lines in the last financial year. The Primark owner also proposed a final dividend of 33.1p per share and a special dividend of 12.7p, taking the full-year payout to 60p – up 37% year-on-year. Looking ahead, the company said that inflationary pressures have eased and there is "less volatility than there was 12 months ago".

Beazley said in an update on Tuesday that it expects to achieve a robust year-end profit, after insurance written premiums increased by 9% to $4.325bn and net insurance written premiums grew 26% to $3.532bn for the nine months ended 30 September. Notably, property insurance written premiums surged 63%, and premium rates for renewal business increased 5%. The company also reported a positive investment income of $202m year to date, and its combined ratio guidance for 2023 remained in the low 80s, while growth guidance for the year stayed s in the mid-20s on a net basis and in line with year-to-date performance on a gross basis.

Newspaper round-up

Royal Mail is to lose its 360-year-old monopoly on delivering parcels from Post Office branches, after concerns about poor quality of service persuaded the postal service to sign deals with rivals Evri and DPD in the run-up to Christmas. The two couriers would be added to the options available at the counter from later this month, the Post Office said, with customers given a choice for the first time. – Guardian

Rishi Sunak’s plan to boost energy security by issuing new North Sea licences every year has been cast into doubt by claims Britain will be unable to handle the crude oil. Up to half of the oil produced in the North Sea will be incompatible with UK refineries by 2035, campaigners have warned. Britain’s refineries are geared up to handle what is known as light oil, rather than heavy crude. – Telegraph

Britain faces record shortages of medicines amid a row between drug makers and the NHS over payments. Patients face issues getting hold of drugs for epilepsy and ADHD, as well as hormone replacement therapy (HRT) for the menopause. A total of 111 drugs are currently facing supply issues, according to the British Generic Manufacturers Association (BGMA). – Telegraph

More than 100 UK companies have admitted breaching sanctions against Russia since its full-scale invasion of Ukraine last year. The Office of Financial Sanctions Implementation (OFSI) recorded that 127 businesses had voluntarily reported sanctions violations as of May 17. After the invasion in February 2022, the UK government added hundreds of individuals and organisations linked to Russia to its sanctions list. There are now 1,637 individuals and 239 entities on that list, according to Pinsent Masons, a law firm that obtained the figures on sanctions breaches after it made a freedom of information request to the OFSI. The Treasury body, which oversees sanction enforcement, did not name the companies in its response. – The Times

One of the world’s fastest-growing fast-fashion groups has taken a shine to the Topshop brand. Shein has formally registered its interest in making an offer with Asos, the struggling online retailer that bought Topshop for £330 million in 2021 from Sir Philip Green’s Arcadia retail empire. It would represent Shein’s second acquisition of a British fashion brand after it bought Missguided and intellectual property rights from Frasers Group last week for an undisclosed sum. – The Times

US close

US stock markets finished with small gains on Monday with investors choosing not to take on too much risk after the strongest weekly rally for markets in about a year.

Markets were trading within a tight range for most of the session, with the Dow Jones Industrial Average finishing 0.1% higher, the S&P 500 gaining 0.2% while the Nasdaq rose 0.3%.

Last week, the Dow rose 5.07% for its biggest weekly gain since October 2022. The S&P 500 advanced 5.85% and the Nasdaq jumped 6.6% for both indices' best weeks since November 2022.

The week ahead will be light on both economic data and company earnings, though Vertex Pharmaceuticals, Uber and Walt Disney the only major blue chips to be reporting in the coming days.

Earnings season is starting to slow down with 81% of the S&P 500 having now released earnings. According to Factset data, 82% and 62% of those who have reported have beaten expectations on earnings and revenues, respectively.