Weekly review
The FTSE 100 ended the week down 1.05%, or 79.6 points, closing at 7,476.63 on Friday.
Equity view
Associated British Foods maintained full-year guidance on Friday, saying it continued to expect further significant input cost inflation, but the volatility of input costs had diminished. “We continue to expect the aggregate profit of our food businesses to be ahead of our last financial year,” the Primark owner said ahead of its annual general meeting.
Syncona portfolio company Autolus Therapeutics announced that a phase 2 clinical trial in adult acute lymphoblastic leukaemia (ALL) patients has met its primary endpoint at interim analysis. Its treatment demonstrated an overall remission rate, the primary endpoint for the trial, of 70% in an interim analysis of 50 patients, the company said on Friday.
Housebuilder Berkeley backed its full-year profit outlook on Friday even as it posted a drop in first-half profits. In the six months to the end of October, pre-tax profits dipped 2% to £284.8m as revenues fell 1.6% to £1.2bn. During the period, cash due on forward sales rose to £2.33bn from £2.17bn.
Anglo American on Friday said 2022 production had fallen by around 3% as the Quellaveco copper ramp-up and strong diamond production was offset by ore grades in Chile and lower production from Kumba and platinum group metals. Duncan Wanblad, Chief Executive of Anglo American, said: "This year has seen us focus on our immediate priorities of safety and restoring normal operational disciplines given the pandemic related disruptions of the last few years.”
Infrastructure builder Balfour Beatty said it expected annual profit to be ahead of expectations due to positive net interest income and lower tax charges. The company on Thursday said full year revenue was expected to be 5% ahead of 2021’s £8.3bn and lifted cash-flow guidance to £800m from £740-£780m.
British American Tobacco said on Thursday it was on course to meet full-year guidance, after strong growth in vaping products. Updating on trading, the blue chip said its new category unit had continued to drive "strong volume, revenue and market share growth" during the second half, and was now a "significant" contributor to group performance.
Tullow Oil has appointed Richard Miller as chief financial officer and executive director. Miller is currently Interim CFO and group financial controller and will take his new role on January 1.
Packaging company DS Smith lifted its full-year outlook on Thursday as it hailed an "excellent" performance in the first half. In the six months to the end of October, pre-tax profit jumped 80% to £315m on revenue of £4.3bn, up 28% on the same period a year earlier. Adjusted operating profit was ahead 51% at £418m and the dividend per share was lifted 25% to 6p.
Games Workshop announced the appointment of a new non-executive chairman on Wednesday as it said trading since the last update in September has been in line with expectations. The company, which makes miniature wargames, has appointed John Brewis as non-exec chair with effect from 1 January 2023. Brewis is taking over from Elaine O'Donnell, who served as a director for nine years and as chair for two.
Britain’s competition regulator has dropped a probe into outsourcer Mitie over a procurement process for immigration removal centre contracts run by the Home Office, the company said on Wednesday. The Competition and Markets Authority in March launched an investigation into “suspected anticompetitive conduct” related to the process to find firms to operate certain services at the Heathrow and Derwentside immigration removal centres.
Commercial vehicle rental provider Redde Northgate said on Wednesday that full-year results would be "modestly above" market views, as it posted a rise in interim profit and revenue, underpinned by fleet growth and new contract wins. In the six months to the end of October, group revenue rose 14% to £696.3m, reflecting strong traffic and accident management volumes, fleet growth, pricing increases, and continued robust residual values, it said.
Online advertising group Baltic Classifieds reported a rise in interim profits driven by all its business units. The company posted core profit of €22.8m, up 16%, for the six months to October 31.
Industrial thread maker Coats Group said the trustee of its UK pension scheme had purchased a £350m bulk annuity policy from Aviva. The deal insures benefits payable under the scheme for around 3,700 pensioner and dependant members, representing roughly 20% of the scheme's liabilities.
Equipment rental firm Ashtead said on Tuesday that full-year results were set to be ahead of its previous expectations as it hailed a strong first-half performance. Adjusted pre-tax profit rose 27% in the first half to $1.2bn, on revenue of $4.8bn, up 23% on the same period a year earlier. Group rental revenue grew 26% at constant currency to $4.4bn.
Phoenix Group described a year of “strong organic growth” in an update on Tuesday, saying it expected to deliver around £1.2bn of incremental, organic new business long-term cash generation in 2022. The FTSE 100 insurer said it also remained on track to deliver 2022 cash generation at the top end of its target range of between £1.3bn and £1.4bn.
Morgan Advanced Materials maintained full-year guidance and said it was making a £67m contribution towards its defined benefit pension scheme to free up cash flow. In a statement ahead of its capital markets day, the company said it was accelerating organic revenue growth to extend its position in faster growing markets, supporting 3-6%a year.
National Express said on Monday that interim chief financial officer James Stamp will take on the role on a permanent basis with immediate effect. Stamp joined the company in July 2017. Prior to his appointment as interim CFO on 1 November, he had served as CFO of the UK & Germany division and as group commercial and strategy director, where he led work on the Evolve strategy.
International Public Partnerships said it had made a follow-on investment in Family Housing for Service Personnel (FHSP) in the US. The company has invested approximately $45m (£37m) into two additional interest-bearing subordinated debt instruments underpinned by security over seven operational public-private partnerships, comprising 21,800 housing units located across the US.
Irn-Bru maker AG Barr said on Monday that it has bought drinks business Boost for up to £32m from founder Simon Gray and his wife Alison. The payment comprises an initial £20m, and up to £12m dependent on future revenue and profitability performance of the business over a two-year period from completion.
Property developer British Land said on Monday that it will let the entirety of its Storey space at the recently refurbished 155 Bishopsgate to tech recruitment giant Levin to use as its new base of operations in London. Levin has signed an agreement to lease 23,000 square feet of space at the site, marking the group's third upsize at Broadgate after initially taking Storey space at 1 Finsbury Avenue in 2020 and later taking additional space in the neighbouring unit and at 100 Liverpool Street.
Economic news
The UK government has unveiled plans to water down regulations introduced to safeguard the economy after the bank-induced 2008 financial crash in an attempt to boost economic growth. Finance Minister Jeremy Hunt announced his plans on the day Spanish bank Santander was fined £107m for failures to implement money-laundering controls.
UK Home Secretary Suella Braverman has warned people to "think carefully" about flying this Christmas after UK Border Force staff voted in favour of industrial action. The PCS union announced on Wednesday that there would be two periods of industrial action, from 23 December to Boxing Day, and then from 28 December to New Year’s Eve, in a dispute over pay.
House prices fell across the UK last month, a closely-watched survey showed on Thursday, as higher borrowing costs and the weakened economic outlook weighed on sentiment. According to the latest residential survey from the Royal Institution of Chartered Surveyors, a net balance of -25% of participants reported a fall in house prices during November, compared to -2% in October.
The Financial Conduct Authority has slapped inter-dealer brokers BGC Brokers, GFI Brokers, and GFI Securities a total of £4.77m for failing to ensure they had appropriate systems and controls in place to effectively detect market abuse. According to the FCA, BGC/GFI failed to properly implement Market Abuse Regulation trade surveillance requirements, meaning there was an increased risk that potentially suspicious trading could take place right under their nose.
A long fought-for compensation scheme for subpostmasters affected by the Post Office accounting software scandal was announced on Wednesday. In 1999, subpostmasters, who are essentially franchisees of the state-owned company Post Office Limited who provide postal services to their local communities, started being switched to the ‘Horizon’ accounting software.
UK house prices suffered their biggest monthly decline in November since the global financial crisis in October 2008, amid rising mortgage rates, according to a survey released on Wednesday by lender Halifax. House prices fell 2.3% on the month following a 0.4% drop in October, with the average price of a house standing at £285,579, down from £292,406.
The UK construction sector faltered last month, a closely-watched survey showed on Tuesday, as higher borrowing costs and the weaker economic outlook curbed demand. The S&P Global/CIPS UK Construction Purchasing Managers’ Index fell to 50.4 in November, from 53.2 in October. It is the third consecutive month that the index has fallen, and well below the consensus for 52.0.
Food inflation eased marginally in November, industry data showed on Tuesday, the first decline in nearly two years. According to retail consultancy Kantar, grocery price inflation eased 0.1 percentage points to 14.6% last month, the first fall in 21 months.
Black Friday and the colder weather helped boost high street sales last month, industry data showed on Tuesday. According to the latest BRC-KPMG Retail Sales Monitor, sales in the four weeks to 26 November rose 4.2%, compared to a rise of 5.0% a year earlier.
A spate of nationwide rail strikes over the busy festive season looked increasingly likely on Monday, after the RMT union rejected a pay offer. The Rail Delivery Group, which is representing 14 train operators, has offered a 4% pay rise this year, backdated to the start of the financial year, followed by a further 4% increase next year.
International events
Consumer inflation eased in China in November, according to figures released on Friday. The consumer price index rose 1.6% from a year earlier, down from 2.1% in October and in line with expectations. The key driver for the reduction was lower food prices, while fuel price inflation also eased further.
Americans filed first-time unemployment claims at an accelerated clip in the week ended 3 December, according to the Labor Department, with initial jobless claims rising by 4,000 to 230,000, up from the prior week's upwardly revised print. The largest increases in initial claims were seen in Wisconsin, Connecticut, Ohio, Tennessee, and Massachusetts, while the largest decreases were in California, Illinois, Georgia, Texas, and Florida.
US mortgage applications declined 1.9% in the week ending 2 December, according to the Mortgage Bankers Association of America. Last week's fall, which follows a 0.8% drop in the previous week, comes as applications to purchase a home dropped 3% and refinance applications increased 4.7%.
China’s dollar-denominated exports in November fell more than expected 8.7% year on year to $296bn, compared with a decline of 0.3 per cent in October, according to official data released on Wednesday. Forecasts had been for a fall of 1.5%. Imports also fell 10.6% on an annualised basis to $226.2bn, a sharp decline from growth of 0.7%in October. Analysts expected a fall of 4.16% for the month compared to a year ago.
Economic growth for the eurozone economy in the third quarter has been revised upwards from preliminary estimates, driven by fixed capital investment and household spending. Gross domestic product rose by 0.3% in the three months to September 30, slightly more than the 0.2% preliminary estimate, according to data released Wednesday by Eurostat.
The US trade deficit widened in October to $78.2bn from $74.1bn in September, according to data released on Tuesday by the Commerce Department. This marked the second consecutive increase after contracting for the prior six months.
The European Commission is considering banning new investments in Russia’s mining sector, it was reported on Tuesday, as part of a fresh package of sanctions. According to the Financial Times, officials will discuss the proposed ban with member states in the coming days ahead of intending to secure agreement by the end of next week. The newspaper cited three unnamed people with knowledge of the discussions. The EC declined to comment.
S&P Global's Eurozone construction purchasing managers index fell to 43.6 in November, down from 44.9 in October for a seventh consecutive monthly contraction across the sector. November's decline was the sharpest since May 2020, with France leading the downturn at 40.7, followed by Germany at 41.5 - which had recorded the worst downward trend in September and October.
German factory orders rose more than expected in October, according to figures released on Tuesday by Destatis. Orders were up 0.8% on the month following a revised 2.9% decline in September, coming in comfortably ahead of expectations for a 0.1% increase.
Eurozone October retail sales fell 1.8% compared with September, according to data released by the EU on Monday. Non-food products fell by 2.1% month on month and by 1.5% for food, drinks and tobacco, while it grew by 0.3% for automotive fuels.
Reporting by Sharecast.com staff and contributors.