Weekly review

The FTSE 100 ended the week up 0.87%, or 68.45 points, closing at 7,947.11 on Friday.

Equity view

Property portal Rightmove posted a rise in full-year operating profit on Friday as it highlighted "resilient traffic despite a significantly less frenetic property market than 2021".m In the year to the end of December 2022, operating profit was up 7% at £241.3m, with revenues 9% higher at £332.6m. Rightmove said customers continued to upgrade their packages and to increase their use of digital products.

Engineering group IMI reported a rise in full-year profits and revenue on Friday and hiked its dividend as it said all three divisions had achieved organic revenue growth. In the year to the end of December 2022, adjusted pre-tax profit was 13% higher at £346m, while revenue was up 10% at £2bn. Operating profit grew 14% to £364m.

Premium chocolatier Hotel Chocolat has begun a formal redundancy consultation, putting jobs at risk as it plans to take the business in a "leaner and more competitive direction". According to a leaked letter seen by Grocery Gazette, the official consultancy process began on 21 February when staff were told their roles were at risk due to the process which "may lead to changes or to them leaving the business".

Investment vehicle HICL Infrastructure reported an updated net asset value of 165.8p as at 31 December on Friday, representing a 1.5p increase from the prior quarter. The FTSE 250 firm put the increase down to actual inflation rates and deposit rates, as well as adjustments to asset-specific discount rates.

Taylor Wimpey warned on Thursday completions were likely to fall this year, the latest housebuilder to see higher mortgage rates and the cost-of-living crisis knock buyer confidence. The blue chip said revenues for the year to 31 December had jumped 3% to £4.42bn, while operating profits rose 11% to £923.4m. Pre-tax profits jumped 22% to £827.9m.

Insurer Beazley reported a drop in full-year profit on Thursday as it took a hit from investment losses. In the year to the end of December 2022, pre-tax profit fell 48% to $191m.

UK defence and commercial engineer Melrose Industries said 2022 profits came in higher than expected and forecast a significantly stronger performance from its aerospace unit this year. Adjusted full-year pre-tax profit came in at £384m, compared with £194m in 2021.

Molten metal flow engineer Vesuvius hailed record full-year results on Thursday despite "tough" markets and inflationary pressures. In the year to 31 December 2022, pre-tax profit rose 62% to £207m, with revenues up 25% at £2bn. Trading profit was 60% higher at £227m and the company delivered a return on sales of 11.1%, up from 8.7% a year earlier.

Persimmon warned on profits on Wednesday, after the housebuilder was knocked by the spike in mortgage rates. The FTSE 250 firm said it had delivered a “very strong performance” in 2022, with 14,868 new home completions, compared to 14,551 a year previously.

Aston Martin Lagonda posted a sharp jump in full-year revenues amid increasing output and record total average selling prices. “Despite the operating environment, we ended the year with significantly improved growth, margin enhancement and positive free cash flow in Q4, exiting 2022 with the strongest order book in many years," executive chairman Lawrence Stroll said.

Nichols swung back into the black last year, the soft drinks specialist said on Wednesday, despite mounting inflationary pressures. Revenues for the year to 31 December were £164.9m, a 14% improvement on 2021. Within that, the owner of Vimto, Feel Good and Sunkist, among others, said UK revenues had strengthened 14% to £127m and international sales had increased 16% at £38m.

Rathbones reported a big drop in full-year profits and a reduction in funds under management and administration, although net inflows held up. Commenting on the results, chief executive officer, Paul Stockton, said that the UK wealth and asset management sector remained "fundamentally attractive" thanks to the underlying long-term trends.

UK asset manager Abrdn swung to a full-year loss citing volatile markets and surging investments in what the company called “one of the hardest investing years in living memory”. The company on Tuesday reported a full-year pre-tax loss of £651m for the 12 months to December 31, compared with a profit of £1.1bn a year earlier.

UK online grocer and technology company Ocado Group posted wider losses as the cost of living crisis and return to normal shopping habits after the Covid pandemic hammered its joint venture with Marks & Spencer. The group on Tuesday posted a pre-tax loss of £501m for the year to November 27, 2022 compared with a loss of £179m a year earlier and worse than analyst forecasts of a £399m loss.

UK builders merchant Travis Perkins on Tuesday reported a fall in annual profit due to a tougher housing market and restructuring costs, which offset a rise in sales. The company reported adjusted operating profit of £295m, down 16.4%, hit by a £15m restructuring charge. Revenue grew 9% to £4.9bn.

Outsourcer Serco hiked its dividend on Tuesday as it reported a rise in full-year profit and revenue despite a decline in Covid-related work. In the year to the end of December 2022, underlying trading profit was up 4% at £237m. Revenues were ahead 2% at £4.5bn. Serco said this was despite Covid-related revenues reducing by £480m. Excluding Covid and currency, revenue grew 11%.

Octopus Renewables Infrastructure Trust on Monday said it had refinanced and increased its multi-currency revolving credit facility. The committed £270.8m RCF - which was previously £150m committed - has a three-year term to February 24, 2026 and can be drawn in British pounds, euros, Australian and US dollars.

Exploration and development firm Capricorn Energy said on Monday that full-year overall production had come in lower than original guidance but within its revised range of 33,000-36,000 barrels of oil per day. Capricorn Energy stated overall annual production hit roughly 34,200 barrels of oil per day in 2022, dropping from initial guidance due to its joint venture drilling fewer development wells than originally planned and targeting oil versus higher rate, lower value gas.

Refractory products group RHI Magnesita said on Monday that both revenues and adjusted earnings had risen in the twelve months ended 31 December. RHI Magnesita stated full-year revenues were said full-year revenues had grown 22% to €3.31bn, while adjusted underlying earnings had risen 21% to €384.0m. Adjusted EBITDA margins improved 60 basis points to 11.6%.

Begbies Traynor said on Monday that it was on track to meet market expectations for the year after its third-quarter performance was in line with the first half. Market expectations are for revenue of £117.7 to £121.4m and adjusted pre-tax profit of £19.7m to £20.6m.

Economic news

Chancellor Jeremy Hunt is reportedly set to extend the government’s £2,500 energy price guarantee for a further three months. According to The Times, Hunt will retain the guarantee for three more months until wholesale prices have fallen so far that it becomes unnecessary.

The UK’s service sector returned to growth in February as business activity expanded at the fastest pace since June 2022, according to a survey released on Friday. The S&P Global/CIPS services purchasing managers’ index rose to 53.5 from 48.7 in January, coming in above the 50.0 mark that separates contraction from expansion for the first time in six months. The reading was above the initial estimate of 53.3.

Retail footfall growth softened in February, industry data published on Friday showed, as shoppers tightened their belts after Christmas and the January sales. According to the latest BRC-Sensormatic IQ Footfall Monitor, total UK footfall was up 10.4% on February 2022 but down 2.1 percentage points on January’s 12.5% hike.

Retail footfall jumped in February, industry data showed on Thursday, boosted by the half-term school holiday. According to retail consultancy MRI Springboard, footfall across all shopping destinations rose 9.4% month-on-month in February, compared to a drop of 18.8% in January.

The number of mortgage approvals fell sharply in January, official data showed on Wednesday, as higher mortgage rates weighed on demand. According to the Bank of England, net mortgage approvals fell to 39,637 from an upwardly-revised 40,540 in December. Although slightly above forecasts for around 38,500, it remains the fifth consecutive monthly decrease in approvals.

UK house prices fell by 1.1% year-on-year in February, the first annual decline since June 2020, mortgage lender Nationwide said on Wednesday. Prices also fell 0.5% month-on-month, marking the sixth consecutive monthly drop and the longest period of successive falls since February 2009 when banks caused the financial crash, according to the building society’s key index. Across the UK, the average house price in February was £257,406.

The downturn in the UK's manufacturing sector abated somewhat in February, the results of a closely followed survey confirmed. S&P Global's UK factory sector Purchasing Managers' Index improved from a reading of 47.0 for January to 49.3 in February.

Shop price inflation has hit a fresh high, industry data showed on Wednesday, as the cost of food continues to soar. According the latest BRC-NielsenIQ Shop Price Index, annual inflation was a record 8.4% in February, compared to 8% in January.

Grocery price inflation in the UK hit a new high in the four weeks to 19 February, according to data provider Kantar. Inflation reached 17.1% - the highest level ever recorded by Kantar, pushing the average annual bill up by £811.

Sterling rose on Monday after Prime Minister Rishi Sunak said he had agreed a new Brexit deal for Northern Ireland with European Commission President Ursula von der Leyen. Sunak said the agreement - which he referred to as the new 'Windsor Framework', as that's where it was struck - was a "historic" and "decisive breakthrough". It "delivers smooth-flowing trade within the whole of the United Kingdom, protects Northern Ireland's place in our union and safeguards sovereignty for the people of Northern Ireland", he said.

International events

The eurozone economy expanded in February at its fastest pace since June 2022, according to a survey released on Friday. The S&P Global composite purchasing managers’ index rose to 52.0 from 50.3 in January, coming in just a touch below the initial estimate of 52.3.

German exports rose by more than expected in January, recording a 2.1% rise and rebounding from a sharp drop in the prior month, according to official data released on Friday. Exports rose 2.1% due to strong demand from the US and UK, with goods sent to the US 3.1% month-on-month and while those exported to the UK increased 7.8% on the same basis.

Activity in China’s services sector picked up more than expected in February amid a recovery in demand, according to a survey released on Friday. The Caixin services purchasing managers' index rose to 55.0 from 52.9 in January. This was above consensus expectations for a reading of 54.5 and comfortably above the 50.0 mark that separates contraction from expansion.

Eurozone inflation eased less than expected in February, according to preliminary data released by Eurostat on Thursday. Headline inflation in the bloc ticked down to 8.5% year-over-year in February from 8.6% in January. This was above consensus expectations for a decline to 8.2%.

Unemployment claims in the US were little changed during the latest week. According to the US Department of Labor, in seasonally adjusted terms initial jobless claims drifted lower by 2,000 over the week ending on 25 February to reach 190,000.

Factory sector activity in the People's Republic of China ramped up more quickly than expected in February, the results of two closely followed surveys revealed. The Purchasing Managers' Index from private sector survey compiler Caixin rose from January's level of 49.2 to 51.6 (consensus: 51.3) for last month.

The downturn in American manufacturing eased a little last month and so did price pressures, the results of a closely followed survey revealed. The Institute for Supply Management's factory sector Purchasing Managers' Index rose from a January reading of 47.4 to 47.7 in February (Consensus: 47.8).

Factory sector activity in the US experienced a solid decline last month as levels of output and new orders registered further falls. S&P Global's factory sector Purchasing Managers' Index rose from a reading of 46.9 for January to 47.3 in February.

German inflation unexpectedly ticked higher in February as food prices rose, according to data released on Wednesday by Destatis. The harmonised index of consumer prices rose to 9.3% from 9.2% in January, versus consensus expectations for a fall to 9%.

The Eurozone's manufacturing sector strengthened in February, a closely-watched survey showed on Wednesday, as supplier bottlenecks eased. The final S&P Global Eurozone Manufacturing PMI was 48.5 in February, compared to 48.8 a month previously, in line with estimates, while the manufacturing output index nudged above the neutral mark to reach 50.1, up from 48.9 in January.

Reporting by Sharecast.com staff and contributors.