Weekly review

The FTSE 100 ended the week up 97.28 points, closing at 6,991.09 on Friday.

Equity view

PureTech Health said on Friday that it has exchanged indicative, non-binding proposals with US biopharmaceutical company Nektar Therapeutics regarding a possible combination. Responding to press speculation a day earlier, PureTech said that it remains in discussions with Nektar about the proposal.

Marshalls warned on profits on Friday, sending its shares tumbling in early trading, after slowing demand dented revenues at the stone and concrete specialist. Marshalls said group revenues rose by 4% on a like-for-like basis, or by 20% once the acquisition of pitched roof firm Marley was included, to £544m in the nine months to 30 September.

Wincanton saw revenues jump in the first half after securing a string of contracts, the supply chain specialist said on Friday. Updating on trading, Wincanton said revenues in the six months to 30 September were ahead 8%, or 6% excluding acquisitions, driven by continued volume and new business growth across all of its four business sectors.

Fashion brand Superdry said on Friday that it swung to a full-year profit as revenues rose, thanks in part to an increase in full price sales, but warned that profit for FY23 was set to fall amid cost inflation. In the 53 weeks to 30 April, the company swung to an adjusted pre-tax profit of £21.9m from a loss of £12.6m a year earlier. On a statutory basis, pre-tax profit was £17.9m, versus a loss of £36.7m the previous year.

Spirits maker Diageo got off to a good start in its 2023 fiscal year, reporting organic net sales growth across all regions ahead of its annual general meeting. Nevertheless, the company anticipated the operating environment would remain "challenging" and volatile due to the geopolitical uncertainty, weaker consumer spend, price pressures and the disruptions from Covid-19.

Safety technology maker Halma said it had bought German testing technology firm WEETECH Holding for €57.5m (£50m), on a cash-and debt-free basis. Founded in 1973 and headquartered in Wertheim, Germany, WEETECH designs and makes safety-critical electrical testing technology, to test the integrity of both high and low voltage electrical systems.

Iron ore pellet producer Ferrexpo reported a sharp fall in third-quarter output on Thursday due to Russia’s blockade of Ukraine's Black Sea ports. The company said production slumped 68% year-on-year to 0.8 million tonnes. Sales fell 65% to 1 million tonnes.

Volution posted a rise in full-year profit and revenue on Thursday, as it highlighted good growth across all geographies. For the year to the end of July, the designer and manufacturer of energy efficient indoor air quality solutions reported a 14.5% jump in adjusted pre-tax profit to £60.9m and a 12.9% increase in revenues to £307.7m.

Asset and energy support services group Sureserve has successfully wrapped up a £5.4m contract with the Defence Infrastructure Organisation to supply the UK Ministry of Defence with solar photovoltaic technology. Sureserve said on Wednesday that its CorEnergy subsidiary, acquired by the group in December 2021, had won the contract after bidding via an Aaron Services framework.

Engineering services company Hill & Smith has acquired the business and assets of portable solar construction equipment manufacturer National Signal as part of a deal valued at almost $30.0m. Hill & Smith will make an initial cash consideration of $25.3m for National Signal, on a debt and cash-free basis, with a further cash payment of up to $4.0m payable, conditional on the business' achievement of certain financial performance targets in the three years post-acquisition.

Anglo American said on Wednesday that rough diamond sales at its De Beers unit fell in the eighth cycle of the year. Sales declined to $500m from $658m in the seventh cycle, but were up from $492m in the eighth cycle of last year.

Warrington-based property business Assura said on Wednesday that the first half of the year to 30 September was "another period of good progress" and that it remains well-placed to meet the UK's demand for "quality" primary care and community health buildings as a partner of choice for the NHS. The company said its portfolio currently stands at 603 properties, with an annualised rent roll of £139.3m. It has invested £141m on additions during the half, at an average yield on cost of 5.0%, it said.

High street bakery chain Greggs said on Tuesday that total sales were up 14.6% over the 13 weeks ended 1 October, putting it on track to meet full-year expectations. Greggs said it continued to trade well over the third quarter, with like-for-like sales in company-managed shops rising 9.7% year-on-year.

Wizz Air carried half again as many passengers in September as during the year earlier month and expanded its footprint in Eastern Europe. The Eastern Europe-focused low-cost carrier transported approximately 4.57m passengers last month, for an increase of 51.5%, at a load factor of 87.1%.

Real estate investment trust Great Portland Estates has agreed to sell the freehold of 50 Finsbury Square in East London to a wholly owned subsidiary of Wirtgen Invest Holding for a headline price of £190.0m. Great Portland said the sale price reflected a topped-up net initial yield of 3.85% and a capital value of £1,471 per square foot, broadly in line with the March book value after adjusting for estimated capex to complete.

Anglo American said it had teamed up with EDF Renewables to form a new jointly owned company, Envusa Energy, to develop a regional renewable energy ecosystem (RREE) in South Africa. As part of the agreement, Envusa Energy is launching a mature pipeline of more than 600 MW of wind and solar projects in South Africa - a step towards the development of a system expected to generate 3-5 GW of renewable energy by 2030.

Endeavour Mining on Monday said its operations in Burkina Faso have not been affected by the recent coup that forced out Lt Col Paul-Henri Damiba as leader. “The company continues to monitor the situation and will provide further updates if appropriate,” Endeavour said in a brief statement.

Life-saving technology company Halma has acquired Maryland-based medical consumable devices outfit IZI Medical Products in a deal valued at as much as $168.0m. Halma said on Monday that it will make an initial consideration of $153.5m for IZI, on a cash and debt-free basis, funded from existing facilities. An additional consideration of up to $14.5m will be payable in cash, based on IZI's growth in the year to 31 March 2023.

Telecom Plus boosted full-year profit guidance on Monday after record" customer growth during the first half. The company, which trades as Utility Warehouse and offers bundled services such as energy, broadband and insurance, said net customer additions were 86,004 in the first half, bringing the total customer base to 814,684 as at 30 September. Telecom Plus said the increase represented an annualised growth rate of almost 24%, fuelled by cash-strapped households seeking out cheaper bills.

QinetiQ said on Monday that it has agreed to buy Australian defence services company Air Affairs for AUD53m (£31m) in cash and to sell its Belgium-based commercial space business, QinetiQ Space, to Redwire Space Europe for €32m (£28m) in cash. The company said it has set out a clear strategy to focus on its "six distinctive offerings and align its capital deployment to its three home countries: US, UK and Australia".

Economic news

High street sales faltered in September, industry research showed on Friday, as hard-pressed consumers tightened their belts. According to the latest BDO High Street Sales Tracker, total like-for-like sales - which combine in-store and online sales - grew by 2.8% year-on-year, the worst performance since the end of lockdown measures.

The house market showed early signs of slowing in September, according to industry data released on Friday, as house prices nudged lower. According to the Halifax House Price Index, house prices eased 0.1% in September, compared to a marginal rise of 0.3% in August and the second decrease in three months. The annual growth rate also eased, to 9.9% from 11.4%.

Shoppers returned to stores in September, industry data showed on Friday, with footfall reaching its highest level since the start of the pandemic. According to the latest BRC-Sensormatic IQ Footfall Monitor, total UK football fell 9.8% last month compared to September 2019. That represented a 2.6 percentage point improvement on August, and was comfortably above the three-month average decline of 11.4%.

Some of Britain’s largest mortgage lenders are set to implore chancellor Kwasi Kwarteng to extend a first-time buyer guarantee scheme, it was reported on Thursday. According to Sky News, executives from major banks and the country’s largest building society Nationwide were preparing to ask Kwarteng to commit to a renewal of the Mortgage Guarantee Scheme.

The UK construction sector returned to growth in September, but business expectations hit a 26-month low, according to a survey released on Thursday. The S&P Global/CIPS construction purchasing managers’ index rose to 52.3 from 49.2 in August, coming above the 50.0 mark that separates contraction from expansion. The reading was also comfortably ahead of consensus expectations of 48.0.

Fitch downgraded the UK’s credit outlook late on Wednesday, citing the government’s recently-announced mini-budget. The outlook was cut to "negative" from "stable". Fitch said: "The large and unfunded fiscal package announced as part of the new government's growth plan could lead to a significant increase in fiscal deficits over the medium term."

UK Finance Minister Kwasi Kwarteng will hold talks on Thursday with major lenders amid concerns about the impact of recent market turmoil on mortgage provision, Sky News reported citing unnamed sources. Kwarteng is expected to quiz lenders on their plans after hundreds of mortgage products were pulled in response to his poorly received mini budget 10 days ago, earning him the nickname “KamiKwasi” on social media in reference to the reaction from financial markets to his unfunded tax cuts.

Prime minister Liz Truss defended her government's plans to cut taxes on Wednesday, insisting they were both "morally and economically" right. Appearing after a turbulent few days, which saw the government U-turn on the proposed abolition of the 45p higher rate of tax, Truss told the Conservative party conference: "These are stormy days. We are dealing with the global economic crisis caused by Covid and Putin’s appalling war in Ukraine.

Retail experts Springboard revealed on Wednesday that UK footfall growth had slowed in September as Britons continue to struggle with the current economic situation. Springboard said UK footfall grew 6.8% year-on-year in September, down from 8.6% in August and 15.6% in July.

UK business activity fell in September to the lowest level since January 2021, when the country was in lockdown, according to a survey released on Wednesday. The S&P Global/CIPS composite PMI - which measures activity in both the services and manufacturing sectors - fell to 49.1 in September from 49.6 in August, coming in below the 50.0 mark that separates contraction from expansion for the second month in a row but above the flash reading of 48.4.

International events

German retail sales edged higher last month if changes in prices are not taken into account. According to the Federal Office of Statistics, in seasonal and calendar adjusted terms, retail sales rose at a month-on-month pace of 0.1% in August (consensus: -1.0%).

Jobless claims in the US rose unexpectedly during the preceding week. According to the US Department of Labor, in seasonally adjusted terms the number of initial unemployment claims increased by 29,000 over the week ending on 1 October to reach 219,000.

Germany’s factory orders were weaker than expected in August, official data showed on Thursday, as the war in Ukraine continued to weigh heavily. According to Destatis, the Federal Statistical Office, new orders in the manufacturing sector slid 2.4% on the previous month, and by 4.1% on August 2021. Analysts had been expecting a decline of around 0.7%.

The downturn in eurozone construction continued at pace in September, a closely-watched survey showed on Thursday, as prices rose and the weakening economic outlook weighed on demand. The S&P Global Eurozone Construction Total Activity Index came in at 45.3, the fifth consecutive reading under 50. A reading above 50 indicates growth, while a reading below suggests contraction.

Retail sales in the euro area fell more quickly than expected last month. According to Eurostat, in seasonally adjusted terms, the volume of retail sales within the single currency block dipped at a month-on-month pace of 0.3% in August (consensus: -0.4%).

Ursula von der Leyen has urged the European parliament to back a temporary cap on gas prices. The European Commission president acknowledged that when a cap was first suggested earlier in the year - with the intention of reducing gas prices and limiting volatility, including Russia’s ability to manipulate prices - not all member states backed the concept, primarily because of concerns over security of supply.

The US private sector added more jobs than expected in September, according to the latest data from ADP. Employment rose by 208,000, versus expectations for a 200,000 jump and up from a revised 185,000 in August.

German imports and exports pushed higher in August, official data showed on Wednesday, trimming the trade surplus by more than expected. According to Destatis, the Federal Statistical Office, German exports rose by 1.6% month-on-month in August on a calendar and seasonally-adjusted basis, compared to a revised 1.6% fall in July.

S&P Global's Eurozone composite PMI fell to 48.1 in September, down 0.1 points from its flash estimate and 0.8pts from the prior month, with both the services and manufacturing PMIs also posting monthly drops. The manufacturing purchasing managers index was revised lower in September, down from a preliminary reading of 48.5 to a final print of 48.4.

Demand in the US for workers weakened clearly in August leading to a large degree of uncertainty regarding the outlook for the jobs market. According to the US Department of Labor's Job Openings and Labor Turnover Summary, the number of job openings fell at a month-on-month pace of 10.0% to reach 10.053m (consensus: 11.088m).

Reporting by Josh White, Michele Maatouk, Frank Prenesti, Abigail Townsend, Iain Gilbert and Alexander Bueso at Sharecast.com.