RS Group annual profit drops, SSE posts solid earnings
London open
The FTSE 100 is expected to open 28 points lower on Wednesday, having closed down 0.09% on Tuesday at 8,416.45.
Stocks to watch
RS Group saw annual profits drop by a quarter, which the industrial and electrical products provider blamed on weakness in global industrial production and the unwinding of unusual post-pandemic trading tailwinds. Adjusted operating profit slumped by 25% on a like-for-like basis to £312m in the 12 months to 31 March, as LFL revenues fell 8% to £2.94bn and the adjusted operating profit margin fell to 10.6% from 13.5%. Looking ahead, the company said that demand was stabilising but remains subdued, with limited short-term visibility – though indicators suggest some market improvement in the second half of 2024/25.
SSE reported adjusted earnings per share of 158.5p in its preliminary results on Wednesday, reflecting a strong operational performance, and reported earnings per share of 156.7p, impacted by impairments and fair value movements on derivatives. Increased profits in SSEN Transmission were driven by higher investment, while profitability in Renewables rose due to higher hedged prices and Seagreen offshore wind farm reaching full power. The company issued £1.1bn of long-term debt, with adjusted net debt and hybrid capital at £9.4bn, maintaining a net debt to EBITDA ratio of 3x, within a strong investment-grade credit rating.
Newspaper round-up
Ministers have earmarked north Wales as the site of a large-scale nuclear power plant, which is part of plans to resuscitate Britain’s nuclear power ambitions. Wylfa on Anglesey (Ynys Môn) has been named as the preferred site for the UK’s third major nuclear power plant in a generation, coming after EDF’s Hinkley Point C nuclear plant, which is under construction in Somerset, and its Sizewell C nuclear project planned for Suffolk. – Guardian
Hybrid and electric cars are more likely to strike pedestrians than petrol or diesel vehicles, particularly in towns and cities, according to an analysis of British road traffic accidents. Data from 32bn miles of battery-powered car travel and 3tn miles of petrol and diesel car trips showed that mile-for-mile electric and hybrid cars were twice as likely to hit pedestrians than fossil fuel-powered cars, and three times more likely to do so in urban areas. – Guardian
A bank boss who earns £3.3m a year has admitted he only took the job on condition that he was allowed to work from home. Mike Regnier, the chief executive of Britain’s fifth-largest lender Santander UK, said he was convinced to accept the role after the bank allowed him to work out of the office most of the time. The 52-year-old spends up to two days a week working in the bank’s main offices in Milton Keynes and London, and the rest of the week from his home in Harrogate, North Yorkshire, or travelling the country. – Telegraph
Eurostar passengers at St Pancras station will be forced to negotiate a five-step check-in process under strict new EU rules, providing their fingerprints and a mugshot twice and answering a series of questions on the nature of their trip. People planning to travel through the Channel Tunnel will be sent a guide to the new system as soon as they book, including a flow chart and checklist detailing each stage of the process and explaining why it is being implemented. – Telegraph
The seaside resorts of Bournemouth, Sidmouth and Bexhill-on-Sea have been identified as among the fastest-growing engines of small-scale British enterprise. Traditionally better known for their holidays and beaches, the towns are attracting a new generation of entrepreneurs. Analysis of digital data by GoDaddy, the website hosting company, found that Suffolk Coastal, which includes Felixstowe, saw the density of microbusinesses increase by 54 per cent in the 12 months until April. That is more than ten times the average UK growth rate of 5 per cent. – The Times
US close
US stocks edged higher on Tuesday, with the S&P 500 and Nasdaq both reaching new heights, though gains were modest as investors showed caution ahead of Nvidia's blockbuster earnings and minutes from the latest Federal Reserve policy meeting.
Despite a subdued start, the S&P 500 rose 0.25% to a new high of 5,321.41 – its 24th record close of the year so far – while the Nasdaq Composite gained 0.22% to a fresh peak of 16,832.62.
Meanwhile, the Dow finished 0.17% higher at 39,872.99.
The index pulled back the previous session after closing above the 40,000 mark for the first time last Friday.
On the macro front, Federal Reserve governor Christopher Waller said he needs to see "several more months" of good inflation data before even considering backing interest rate cuts, while Atlanta Fed president Raphael Bostic said he expects to see inflation continuing to ease but cautioned that the central bank must be careful when it comes to its first rate move.