Weekly review

The FTSE 100 ended the Easter Monday-truncated week up 208.97 points, or 2,73%, closing at 7,871.91 on Friday.

Equity view

Online electricals retailer AO World said on Friday that it expects full-year profit to be around the top end of its guidance range as it continues to see positive traction from its initiatives to cut costs and improve margins. In its trading update in February, AO guided to adjusted EBITDA of £37.5m to £45m for the year to the end of March 2023.

Fashion retailer Superdry withdrew its "broadly breakeven" full-year profit guidance on Friday as it pointed to a challenging trading environment and disappointing retail sales in February and March, and confirmed it is considering a capital raise. The company said retail sales continue to show “good” like-for-like growth, albeit at a slower rate than expected. It also said that while progress has been made with its wholesale partners to support their recovery, sales performance continues to be challenging.

National Grid said in an update on Friday that its performance for the financial year just ended was in line with expectations, with underlying earnings per share growth expected to be in the middle of the 6% to 8% compound annual growth rate (CAGR) range. The FTSE 100 energy network operator said the UK government's introduction of 'full expensing' tax relief for capital expenditure from 1 April 2023, to 31 March 2026 was not expected to have an impact on National Grid's results for the year ended 31 March.

Recruitment firm Hays reported record fees in the March quarter in an update on Friday, up by 5%. The FTSE 250 company said the growth was primarily driven by a strong performance in temp, which saw an increase of 11%.

William Hill owner 888 Holdings on Friday said it expected “significantly” higher adjusted core profit for this year, but said revenue could be lower by a low-to-mid single digit percentage. The bookmaker posted an 82% rise in adjusted core profit to £217m for 2022 as earnings from William Hill, which it bought last year, offset a hit from new online gambling safety rules in the UK.

Tobacco company Imperial Brands said it was on track to deliver earnings in line with expectations and low single-digit constant currency net revenue growth. The company on Thursday said strong combustible pricing was offset by temporarily increased volume declines against a prior period which benefited from Covid-related changes in buying patterns.

High technology products group Oxford Instruments said on Thursday that it was trading ahead of expectations for the full year. Oxford Instruments stated ongoing global trends towards a |greener, healthier, and more connected advanced society" had continued to drive "strong growth" in orders and revenue, resulting in "good growth" in a number of its chosen end markets.

Cyber security firm Darktrace said on Thursday that it had delivered a "robust" third-quarter trading performance but warned that macro headwinds had limited its full-year expectations. Darktrace reported annual recurring revenues of $583.6m as at 31 March, up 33.7% year-on-year, stating its high constant currency ARR growth was supported by its multi-year contract structure, which continues to moderate the impact of a "challenging" macroeconomic environment.

Office space specialist Workspace Group said in a quarterly update on Thursday that customer demand remained strong in the three months through March, with an average of 932 enquiries per month. The FTSE 250 firm said it was successful in converting that demand into new lettings in its fourth quarter, with 341 new lettings completed during the period, bringing in a total rental value of £8.3m per annum.

LXi REIT announced the signing of a £565m loan facility with a syndicate of banks on Thursday, as well as a new dividend target. The FTSE 250 real estate investment trust said the loan facility was the final step of the refinancing of its near-term debt maturities, and would allow it to increase its annual dividend target.

Student accommodation provider Unite said it had already sold 90% of its rooms for the 2023/24 academic year, reflecting strong demand as well as new nomination agreements with universities. “This is supportive of our guidance for full occupancy and rental growth of 6-7% for the 2023/24 academic year, compared with 99% and 3.5% in 2022/23,” the company said on Wednesday.

Hikma Pharmaceuticals said Riad Mishlawi, president of the group's injectables business, has been appointed chief executive Officer, effective from September 1. Said Darwazah will step down as acting CEO and return to his role as executive chairman.

Anglo American said on Wednesday that rough diamond sales at its De Beers unit rose in the third cycle of the year. Sales increased to $540m from $497m in the second cycle, but were down from $566m in the third cycle of last year.

Petrofac warned on Wednesday of a wider full-year loss following a review of its portfolio. In an update ahead of its results for the year to the end of September, the company said that having reviewed its portfolio, it is now recognising an additional EBIT reduction of $140m to $160m in its full-year statements for 2022.

Property developer and investor Great Portland Estates said on Wednesday that it had delivered "a record leasing year", driven by sustained demand for its "high quality spaces", most notably its fitted and fully managed products. Great Portland Estates had signed £55.5m in new leasing during the year ended 31 March, 3.3% ahead of its March 2022 enterprise rental value. For the fourth quarter, GPE signed 11 new leases and renewals, generating annual rent of £4.4m.

Harbour Energy and BP have signed a deal to develop the Viking carbon capture transportation and storage project in the Humber region of north-east England, using depleted offshore gas fields. Under the terms of the agreement, Harbour will continue as operator of the project with a 60% interest and BP acquiring a 40% non-operated stake.

Fund management services company JTC on Tuesday said annual profits rose by a third, driven by new business wins. The firm, which provides services to fund, corporate and private-client managers, posted a pre-tax profit of £36m for the 12 months to December 31. Revenue increased 36% to £200m and new business wins rose 17.7% to a record £24.6m.

MJ Hudson has agreed to sell its data & analytics and business outsourcing divisions to asset manager Apex Group for around £40m as it looks to pay off debts. Shares in the asset management consultancy were suspended at the end of last year and chief financial officer Peter Connell was suspended as the company warned it would not be able to complete its full-year audit by the end of the year after it uncovered more irregularities in its accounts.

Ten-pin bowling centres operator Hollywood Bowl reported record interim revenues on Tuesday as it continued to "execute successfully" against its new openings strategy. Hollywood Bowl said first-half revenues had risen 10.9% to £111.1m in the six months ended 31 March, with like-for-like revenues up 2.4% year-on-year. Revenues from the group's Canadian operations hit £12.2m, in line with internal expectations.

AstraZeneca, Swedish Orphan Biovitrum (Sobi) and Sanofi have simplified their contractual arrangements for the development and commercialization of nirsevimab in the US, they announced on Tuesday. The move came ahead of the upcoming launch of nirsevimab in the United States and other markets.

Economic news

The Bank of England said on Thursday that it has fined the former chief information officer of TSB Bank for failings related to its 2018 IT migration programme. In April 2018, TSB updated its IT systems and migrated the data for its corporate and customer services onto a new IT platform. While the data itself migrated successfully, the platform immediately experienced technical failures. This resulted in significant disruption to the continuity of TSB’s banking services, including branch, telephone, online and mobile banking.

UK house prices were expected to continue falling but property surveyors expect the market to stabilise over the next year as borrowing costs ease, according to data released on Thursday. The Royal Institution of Chartered Surveyors (Rics) said its house price net balance - which measures the difference between the percentage of surveyors seeing rises and falls in house prices - fell to -43 last month, up from -47 in February.

The UK economy stagnated in February as strikes dented productivity, according to figures released on Thursday by the Office for National Statistics. There was zero growth, compared to 0.4% growth in January and versus expectations of a 0.1% increase. January’s growth was revised up from 0.3%.

UK home sales in March have rebounded close to pre-Covid pandemic levels, driven by demand for flats and a recovery from the market slump last September caused by the disastrous mini-budget of former prime minister Liz Truss, according to real estate agent Rightmove. A survey by the property website released on Wednesday showed the number of sales agreed between sellers and buyers was just 1% lower than March 2019 as loan costs fell after Truss’s £44bn plan of unfunded tax cuts caused market turmoil and saw thousands of mortgages pulled by lenders.

The UK economy will remain the worst-performing G7 economy this year, according to forecasts published by the International Monetary Fund on Tuesday. The IMF expects the UK economy to shrink by 0.3% this year - up from a previous forecast for a 0.6% contraction - then grow by 1% in 2024. It pointed to high inflation, currently running at 10.4%, and the selloff in UK bonds following September’s so-called mini budget.

Confederation of British Industry chief Tony Danker has been dismissed with immediate effect after allegations about his conduct at the influential lobby group. The news of his dismissal comes after broader allegations of sexual misconduct by senior figures at the organisation. The CBI stressed that Danker was not the subject of these complaints.

UK retail spending rose in March on an annual basis, boosted by spending for Mother's Day, although the cost-of-living crisis and wet weather kept consumers at home, according to the British Retail Consortium (BRC). The lobby group reported a 5.1% year-on-year increase in retail spending in March, down from annual growth of 5.2% in February. Like-for-like sales rose by 4.9%, the same as in February.

International events

Producer prices in the US fell unexpectedly amid declines in energy and services prices. According to the US Department of Labor, in seasonally adjusted terms so-called final demand prices were down by 0.5% month-on-month in March.

The US labour market eased a bit more during the previous week. According to the US Department of Labor, in seasonally adjusted terms, initial unemployment claims rose by 11,000 over the week ending on 8 April to reach 239,000.

Eurozone industrial production rose more than expected in February, according to figures released on Thursday by Eurostat. Industrial production, ex-construction, jumped 1.5% on the month following an upwardly-revised 1% rise in January. This was ahead of consensus expectations for a 1% increase.

Chinese exports unexpectedly spiked in March against forecasts of a contraction, as the economy continued to recover from its zero-Covid policies and months of falling trade due to lockdowns. Dollar-denominated exports grew 14.8% year on year, after falling 6.8% in January and February and against forecasts of a 7% contraction. Imports fell 1.4%, compared with expectations of a 5% decline.

German inflation continued to soften last month due to falling energy costs, with consumer prices rising by 7.4% on an annual basis, but lower than the 8.7% rate recorded in the first two months of the year, according to official final data released on Thursday. Prices of energy products increased 3.5% on year, a sharp decline from the 19.1% rise seen in February. Food prices continued to place pressure on consumers, rising 22.3% on an annualised basis and up from the 21.8% recorded in February.

The Bank of Canada left interest rates unchanged at 4.50% on Wednesday, as expected, and upgraded its growth forecast for this year. The BOC said it expects consumer price inflation to fall quickly to around 3% in the middle of this year and then decline more gradually to its 2% target by the end of 2024.

The cost of living in the US fell back by more than expected during the previous month. According to the U.S. Department of Labor, the country's Consumer Price Index increased at a seasonally adjusted month-on-month rate of 0.1% in March (consensus: 0.2%).

US mortgage applications rose 5.3% in the week ended 31 March, according to the Mortgage Bankers Association of America, bouncing back from the prior week's 4.1% drop. Applications to purchase a home surged 7.8%, while those to refinance a home loan rose just 0.1%.

Analysts at J.P.Morgan cautioned clients on Tuesday that the recent run in the Technology space was becoming "stretched" in absolute terms. "It is looking overbought, close to all-time highs, with RSIs that are nearing elevated territory," Mislav Matejka said in a research note sent to clients.

The National Federation of Independent Business' small business optimism index edged to a three-month low of 90.1 in March, down from 90.9 in February to mark the 15th straight month the index has sat below its 49-year average of 98. Small business owners remain down on the future of economic conditions across the US, with 24% of owners stating inflation was their single most important business problem.

Eurozone retail sales fell in February, in line with consensus expectations, according to figures released on Tuesday by Eurostat. Retail sales were down 0.8% on the month following a 0.8% increase in February.

Investor sentiment in the eurozone improved more than expected in April, according to data released on Tuesday. The Sentix investor sentiment index for the bloc rose to -8.7 from -11.1 in March, coming in above consensus expectations for a reading of -9.9.

China’s consumer price inflation hit the slowest pace in March since September 2021, according to data released on Tuesday by the National Bureau of Statistics. CPI slowed to 0.7% year-over-year from 1% growth in February, versus consensus expectations for it to be unchanged.

Reporting by staff and contributors for Sharecast.com.