Dunelm buys Irish chain Homefocus, Sage Group reports full-year growth

London open

The FTSE 100 is expected to open three points lower on Wednesday, having closed down 0.13% on Tuesday at 8,099.02.

Stocks to watch

Homewares retailer Dunelm on Wednesday said it had bought Irish soft furnishing chain Homefocus for an undisclosed sum. Homefocus trades under the 'Home Focus at Hickeys' brand, with 13 physical stores across Ireland and an online operation.

Sage Group reported a 9% increase in full-year underlying total revenue to £2.33bn on Wednesday, driven by strong subscription-based recurring revenue growth. The FTSE 100 firm said underlying operating profit rose 21% to £529m, supported by disciplined cost management, while free cash flow surged 30% to £524m, enabling a £400m share buyback and a 6% increase in the full-year dividend. It noted an 11% rise in annualised recurring revenue, strong adoption of the Sage Business Cloud product, and advancements in AI-powered solutions like Sage Copilot, positioning it for continued growth.

Newspaper round-up

One of the UK’s biggest pension funds has lost more than £350m on a series of “calamitous” investments in incinerator power plants that are expected to go bust in the coming days. The Guardian understands that Aviva Investors will put three incinerators into administration this week after pouring millions of pounds into what has been described as the country’s “dirtiest form of power generation”. – Guardian

HSBC is to launch its first UK “wealth centre” in London’s upmarket Mayfair district, offering more personalised banking services and exclusive events such as wine tastings as part of a drive to win more rich customers. The lender will take up two floors of the 16-storey Smithson Tower at 25 St James’s Street – close to the Ritz Hotel and Fortnum & Mason department store – as part of a wider revamp of HSBC’s premier-tier bank service. Aimed at the sought-after “mass affluent” market, premier is a tier below private-banking clients and targets customers with £100,000 to £2m in income, assets or deposits. – Guardian

Treasury officials called retailers to make the case for Rachel Reeves’s tax raid ahead of a public letter that warned over changes announced in her maiden Budget. Retailers are understood to have been contacted by the Treasury last week to find out whether they planned on giving their support to the letter, which criticised the Chancellor’s decision to impose extra costs on the industry. – Telegraph

Britain’s official labour market statistics may be underestimating the number of people in employment by almost 1 million and overstating the extent of the country’s inactive workforce problem. The Resolution Foundation, a think tank, has calculated that official measures of the state of the labour market produced by the Office for National Statistics have undercounted the levels of employment by 930,000 since the pandemic. – The Times

A mounting scandal over mis-sold motor finance could leave lenders footing a compensation bill of as much as £30 billion, a leading credit rating agency has warned. Moody’s estimate is the highest so far and will fuel speculation that the scandal facing banks and other car loan providers will mirror the payment protection insurance debacle, which ultimately resulted in firms absorbing about £50 billion in redress costs. – The Times

US close

US stocks finished mixed again on Tuesday with the Dow falling for the fourth straight day but the Nasdaq rising more than 1%, helped by gains from chip giant Nvidia.

The Dow declined 0.3% to a two-week low of 43,268.94, having now fallen 1.6% over the past four trading sessions and 2.3% since hitting a fresh record high of 44,293.13 on 11 November.

Meanwhile, the S&P 500 rose 0.4% to 5,916.98 and the Nasdaq climbed 1.0% to 18,987.47.

Escalating tensions between Russia and Ukraine were also drawing an amount of investor attention at the open, with Russian president Vladimir Putin warning the US that the threshold for the use of nuclear weapons has now been lowered after Joe Biden allowed Ukraine to use US weapons to strike inside Russia.

Under the new doctrine, Russia will consider using nuclear weapons if it, or its allies, were met with the use of "conventional weapons that created a critical threat to their sovereignty and (or) their territorial integrity".