Weekly review

The FTSE 100 ended the week down 2.5%, or 198.78 points, closing at 7,748.35 on Friday.

Equity view

Transport operator FirstGroup lifted annual guidance as passenger traffic on its buses and trains continued to recover from Covid pandemic levels. The company on Friday said bus passenger volumes have increased to 83% of 2020 equivalent levels, with commercial and concessionary volumes at 87% and 75% respectively. FirstGroup cited the £2 bus fare cap scheme introduced in England in January, and recently extended to the end of June 2023, and the Scottish government’s funding for free bus travel for all under-22s that has been in place since January 2022.

Robert Walters reported record profits on Friday, driven by the tight labour market and surging wage inflation, as it announced that its long-standing chief executive was stepping down. The recruiter said revenues in the year 31 December were ahead 13%, or 12% on a constant currency basis, at £1.1bn, while pre-tax profits jumped 11% to £55.6m, an all-time high. Net fee income rose 21% to £428.2m.

Engineering materials group Versarien revealed on Friday that chief executive officer Neill Ricketts had resigned from the group. Versarien stated the board was now considering the "appropriate longer term management structure" of the group and said its executive directors will continue to manage the company, supported by its non-executive directors.

Bonhill Group has entered into fresh talks over the sale of InvestmentNews after an initial bid fell through, the media firm announced on Friday. Bonhill said last month that it had accepted a non-binding $6.5m offer for the American business from an unnamed US media buyer.

Property developer Hammerson narrowed annual losses and said it was looking to cut costs further amid the tougher economic outlook. The company, which owns shopping centres posted a £164m loss for 2022, compared with a loss of £429m a year earlier, and largely due to a £282m revaluation deficit.

Gaming giant Entain reported a jump in revenues on Thursday, supported by strong growth in its retail estate. The owner of Ladbrokes and Coral said net gaming revenues were ahead 12% in the year to 31 December, or 10% on a constant currency basis, at £4.35bn.

Recruiter PageGroup hailed a record year on Thursday as it posted a rise in profit and revenue and lifted its dividend. In the year to the end of December 2022, pre-tax profit increased 16.6% to £194.4m, with revenues up 21.1% to £2bn. Operating profit rose 16.4% to a record £196.1m and the total dividend per share including the special dividend was lifted to 42.38p from 41.71p a year earlier.

Spirax-Sarco Engineering reported a rise in full-year profit on Thursday, with higher revenues driven by volume growth and price increases to protect margins. In the year to the end of December 2022, adjusted pre-tax profit rose 11% to £370.6m, coming in ahead of consensus expectations of £362.2m. Revenues were ahead 20% at £.16bn. On a statutory basis, however, pre-tax profit dipped 2% to £308.1m.

Legal & General lifted its dividend on Wednesday as it posted a jump in full-year operating profit. In the year to the end of December 2022, operating profit rose 12% to £2.52bn, beating consensus expectations of £2.46bn. Earnings per share also pushed up 12%, to 38.33p and the return on equity was 20.7%, up from 20.5% a year earlier.

Cyber security firm Darktrace posted a slump in first-half operating profit on Wednesday and cut its free cash flow guidance, as new customer additions slowed and it was hit by a jump in employer tax charges. In the six months to the end of December 2022, operating profit slid 91.6% to $577,000. This was primarily due to "elevated share-based payment and associated employer tax charges related to vesting of a significant block of grants made at IPO," the company said. It added that share-based payment charges are expected to normalise in the second half of this year.

Brick maker Ibstock said on Wednesday that full-year revenue and profits had both surged in 2022 thanks to a "strong trading performance". Ibstock stated revenues had risen 26% to £513.0m, driving a 61% jump in pre-tax profits to £105.0m and a 36% increase in adjusted underlying earnings to £140.0m.

Wealth manager Quilter posted a better-than-expected full-year profit on Wednesday as it said investor sentiment was expected to recover this year. In the year to 31 December 2022, adjusted pre-tax profit fell to £134m from £138m a year earlier, but this was comfortably ahead of consensus expectations of £113m.

Equipment rental firm Ashtead said on Tuesday that full-year results were set to be ahead of its expectations following a strong third-quarter performance, as it highlighted "robust" end markets. In the quarter to the end of January 2023, adjusted pre-tax profit rose 26% from the same period a year earlier to $535m, with revenue up 21% to £2.4bn. Ashtead pointed to a strong quarter across all geographies.

Rio Tinto has agreed to pay a $15m penalty over bribery charges brought by the US Securities and Exchange Commission, involving payments to a consultant in Guinea to keep mining rights over a project in the country. The investigation found in July 2011 the company had hired a French investment banker, a close friend of a former senior Guinean government official, as a consultant to help Rio Tinto retain its mining rights in Guinea's Simandou region.

Gold and silver miner Fresnillo saw its profits more than halve in 2022 amid volatility in precious metals' prices and increased cost pressures. According to company boss Octavio Alvídrez, that was on top of the ongoing impact of the pandemic and the labour reform enacted in Mexico.

Geotechnical engineering company Keller Group on Tuesday reported a fall in full-year earnings as inflation, higher costs and the war in Ukraine took their toll. The company reported pre-tax profit of £56.3m for the year to December 31, down 17%. On an underlying basis profit rose 17% to £93.5m.

AstraZeneca and Daiichi Sankyo's Enhertu cancer drug has met prespecified targets in a phase 2 trial the companies said on Monday. Positive high-level results from an analysis of the ongoing trial showed Enhertu met the prespecified target for objective response rate and demonstrated durable response across multiple HER2-expressing advanced solid tumours in heavily pre-treated patients.

Estate agent Foxtons said on Monday that it has agreed to buy Atkinson McLeod for £7.4m. Atkinson operates in Central East London across four branches, with a lettings business that generates around 90% of its revenues across approximately 1,100 tenancies, Foxtons said. The business is being bought from certain private individual shareholders.

Construction group Galliford Try said on Monday that its environment business has secured a place on Southern Water's new AMP8 framework for medium non-infrastructure works. The £600m framework covers an initial 39-month period, with an extension option to 57 months, and covers works across Southern Water's geographical region including the Isle of Wight.

LondonMetric Property announced the sale of seven long-income assets for £33.9m on Monday, with its share totalling £29.6m. The FTSE 250 company said the sale reflected a blended net initial yield of 4.5% and a crystallised blended ungeared Internal rate of return of 10%, as well as a profit of 28% on cost.

Economic news

High street sales jumped last week, research showed on Friday, despite the cost of living crisis continuing to weigh heavily on the UK. According to the latest BDO High Street Sales Tracker, like-for-like sales rose 11.3% in the week to 5 March, boosted by strong demand both in-store and online.

The UK economy returned to growth in January, according to data released on Friday by the Office of National Statistics, raising hopes that a recession will be avoided. GDP grew 0.3% on the month following a 0.5% contraction in December, coming in ahead of consensus expectations for 0.1% growth.

Mortgage providers must support struggling borrowers, the financial regulator reiterated on Friday, as it warned that an additional 356,000 households were at risk of falling into financial difficulty. Publishing an analysis of the mortgage market, the Financial Conduct Authority said that in addition to households already behind on payments, 356,000 more mortgage borrowers could face payment difficulties by the end of June 2024.

More than a quarter of British companies were hit by worker shortages last month, a survey from the Office for National Statistics showed on Thursday. The latest Business Insights and Conditions Survey found that 27% of businesses with ten or more employees were suffering worker shortages in late February, largely unchanged on early January, when 28% reported difficulties.

Britain’s housing market is still falling but there are indications that pessimism is easing, according to a closely-watched surveyors survey. The Royal Institution of Chartered Surveyors (RICS) said a return of optimism, and lower than expected interest rates, had boosted short-term hopes after a weak start to 2023.

Further rises in UK interest rates could harm an already weakened economy and hard-pressed households, a Bank of England policymaker warned on Wednesday. Swati Dhingra, one of nine members of the BoE’s rate-setting committee, said “overtightening” of interest rates posed more of a risk to the economy than home-grown inflation pressures, such as wage rises.

Bank of England policymaker Catherine Mann on Tuesday said she was concerned UK companies could be using the cost of living crisis to hide price increases, known as “greedflation”. Mann, who sits on the central bank's rate-setting monetary policy committee, warned that interest rates would have to rise beyond their current level of 4% due to companies holding so much power over prices.

UK house prices rose in February as mortgage rates fell and consumer confidence improved, according to the latest data released on Tuesday by Halifax. Prices increased 1.1% on the month in February following a 0.2% rise the month before, to £285,476.

Retail sales sparked in February, industry research showed on Tuesday, as consumers splashed out on Valentine’s Day presents. According to the latest BRC-KPMG Retail Sales Monitor, UK like-for-like sales rose 4.9% year-on-year, or by 5.2% on a total basis. Within that, like-for-like food sales rose 8.2% while non-food sales increased 2.7%.

Business activity in the UK construction sector jumped last month, a closely-watched survey showed on Monday, beating expectations. The S&P Global CIPS UK Construction PMI came in at 54.6 in February, up significantly on January’s 48.4 and well above analyst forecasts for 48.6.

International events

The pace of hiring in the US during the month of February came in ahead of market expectations. According to the US Department of Labor, non-farm payrolls grew by 311,000. Consensus was for a rise of 225,000.

German inflation was unchanged last month, official data showed on Friday, with both energy and food prices remaining high. According to Destatis, the Federal Statistics Office, annual consumer price inflation was 8.7% in February, in line with both the initial estimate and consensus, and unchanged on January.

The Bank of Japan on Friday maintained interest rates at record lows, and said it would continue with its current pace of yield curve control in the final meeting under Governor Haruhiko Kuroda, whose tenure ends in April. The central bank maintained its short-term policy interest rate at negative 0.1%, and maintained its bond-buying policy to control yields, allowing 10-year bond yields to fluctuate by 0.5 percentage points either side of zero, after a shock change to the band in December.

Jobless claims in the US rose unexpectedly during the previous week. According to the US Department of Labor, in seasonally adjusted terms the number of initial unemployment claims rose by 21,000 over the week ending on 4 March to reach 211,000. Economists polled by Dow Jones Newswires had forecast 195,000.

Layoff announcements in the US were running at their highest level since 2009 at the start of the year, one of the country's best known staffing agencies said. US based firms announced 77,770 job cuts in February, which marked a 24% fall month-on-month, according to Challenger, Gray and Christmas.

The head of the French central bank said that the European Central Bank was needed to return inflation back to its 2% goal. In remarks to France Info TV, Governor Francois Villeroy de Galhau, said that: "The peak is close, but inflation remains too high today in France and in Europe," Bloomberg reported.

Chinese consumer price inflation eased more than expected in February, according to data released on Thursday by the National Bureau of Statistics. CPI rose 1% on the year following a 2.1% increase in January, and versus expectations of 1.9%. It marked the slowest rate since February 2022.

America's shortfall on trade with the rest of the world widened by slightly less than anticipated in January. According to the US Department of Commerce, in seasonally adjusted terms the trade deficit in goods and services increased at a month-on-month pace of 1.6% to -$68.3bn.

The number of job openings in the US declined at the start of 2023 albeit by less than anticipated. According to the US Department of Labor, in seasonally adjusted terms job openings were down by 3.6% month-on-month to 10.824m.

Private sector employment in the US rose more than expected in February, according to the latest data from ADP. Employment increased by 242,000 from January, versus expectations for a 200,000 jump. The figures also showed that annual pay was up 7.2%.

Reporting by Sharecast.com staff and contributors.