Weekly review

The FTSE 100 ended the week up 30.54 points, or 0.4%, closing at 7,694.27 on Friday.

Equity view

UK bank NatWest on Friday reported better-than-expected interim profits only days after it was rocked by the resignation of chief executive Alison Rose over leaking of details of hard-right former political party leader Nigel Farage. The bank posted pre-tax profit of £3.6bn, up from £2.6bn a year earlier and better than the £3.3bn estimated by analysts. It also announced a £500m share buyback.

Pharmaceuticals giant AstraZeneca reported strong first-half growth on Friday, despite challenges related to the decline of Covid-19 medicines. The FTSE 100 company said total revenue for the six months reached $22.3bn, representing a 4% increase.

Standard Chartered lifted annual guidance and launched a $1bn share buyback after first-half profits rose 20% on the back of soaring interest rates. The Asia-focused bank posted pre-tax of $3.32bn, smashing the company-compiled $3.18bn average of analyst estimates.

Consumer goods giant Unilever said on Friday that it has appointed Ian Meakins - who is currently chair of catering group Compass and Rexel - as a non-executive director and chair designate. Meakins will join the board on 1 September and will succeed Nils Andersen as chair on 1 December. Andersen will step down after nine years' service at the company’s AGM in May 2024.

Property investor and developer Segro described a solid first-half performance in its interim results on Thursday, with adjusted pre-tax profit reaching £198m, up 2.6% year-on-year. The FTSE 100 company said adjusted earnings per share also showed growth, rising 1.9% to 15.9p.

Mike Ashley’s Frasers Group reported a surge in full-year profits and revenue on Thursday as it hailed a strong performance across the group, boosted by profitable growth in the sports retail segment. In the 53 weeks to 30 April, reported pre-tax profit rose 96.9% to £660.7m, with revenue up 15.8% to £5.6bn.

RS Group reported a softening in first quarter revenue in an update on Thursday when compared to initial expectations, while also announcing the appointment of its new chief financial officer. The FTSE 100 company put the softer revenue down to a number of factors, including softening purchasing managers’ index (PMI) data, a weak electronics market, and tough comparatives from the prior year.

BT Group backed its guidance for 2024 on Thursday as it posted a rise in first-quarter core earnings. In an update for the three months to 30 June, the company said pro forma adjusted earnings before interest, tax, depreciation and amortisation were up 5% to £2bn. Revenue flow through and cost control more than offset cost inflation, BT said.

Luxury car maker Aston Martin Lagonda narrowed losses and maintained annual guidance as strong demand boosted revenue. The company posted an interim pre-tax loss of £142m for the six months to June 30 compared with a loss of £285.4m a year earlier. Wholesale volumes rose 10% to almost 3,000 vehicles with revenue up 25% to £677m.

Alison Rose has stepped down as chief executive of NatWest Group, it was confirmed on Wednesday, in a high-profile row about former Ukip leader Nigel Farage. The controversial political pundit claimed that Coutts, NatWest’s private bank, had decided to close his account because of his political views.

Rolls-Royce surpassed market expectations in its first half, it said in an update on Wednesday, as its ongoing transformation efforts drove improved margins and bolstered its full-year outlook. The FTSE 100 company said its financial results for the first six months of the year were expected to be significantly higher than consensus expectations.

Reckitt Benckiser posted a jump in first-half like-for-like net revenue on Wednesday, driven by solid performances across its portfolios. The company - which makes Dettol, Lysol, and Nurofen, among other things - said first-half LFL net revenue was up 6% to £7.4bn. Revenue in the hygiene and health segments rose 3.6% and 8.8% respectively, while the nutrition segment saw a 5.3% increase.

Specialty chemicals company Croda International ended its first half in line with its revised expectations, it reported on Tuesday, with year-on-year declines across several key financial indicators. The FTSE 100 firm said that on a statutory basis, sales were down 21.9% at £880.9m, while operating profit tumbled 54.9% to £130.2m.

Catering company Compass Group backed its full-year outlook on Tuesday as it posted an increase in third-quarter organic revenue. In an update for the quarter to the end of June, Compass said organic revenue rose 15%. Revenue in North America was up 14%, while Europe and Rest of World revenue jumped 17% and 20%, respectively.

UK newspaper publisher Reach reported a 23.5% fall in half-year operating profit as it was hit by Facebook’s decision to relegate news content. The company, which produces the centre-left Daily Mirror and hard-right Daily Express tabloids, on Tuesday said operating profit came it at £36.1m for the 26 weeks to June 25, compared with £47.2m a year ago.

Tabletop gaming company Games Workshop reported its eighth year of group sales and profit growth in a row on Tuesday, with full-year core revenue rising to £445.4m from £386.8m year-on-year. The FTSE 250 company said that although licensing revenue experienced a slight decline from £28m to £25.4m, overall revenue for the 52 weeks ended 28 May reached £470.8m, compared to £414.8m in the prior year.

Vodafone on Monday said it had appointed Luka Mucic as chief financial officer effective from September 1. Mucic was the chief operating officer of SAP SE from 2014-2017 and its chief financial officer from 2014 until March 31 2023. During these roles, he was responsible for SAP's groupwide finance, legal, data protection, procurement, audit, risk management, security, IT and process management functions.

Pharmaceuticals giant GSK announced on Monday that its majority-owned HIV specialist subsidiary ViiV Healthcare has received a positive opinion from the European Medicines Agency's (EMA) Committee for Medicinal Products for Human Use (CHMP), recommending marketing authorisation for ‘cabotegravir’ long-acting (LA) injectable and tablets for HIV prevention. The FTSE 100 company said that in Europe, significant progress had been made in the delivery of HIV treatment and prevention services, resulting in a continuous decline in the incidence of new HIV cases.

Greencoat UK Wind announced on Monday that, together with other funds managed by Schroders Greencoat, it agreed to acquire a 25% stake in the London Array offshore wind farm from Orsted. The FTSE 250 company said the landmark transaction would amount to a total consideration of £717m for the 25% stake, combining investments from itself and other participating funds.

Food producer Cranswick reported a robust first-quarter performance in an update on Monday, with a 14.7% increase in revenue year-on-year. The FTSE 250 company said its core categories experienced resilient demand, with all four food product categories in the UK seeing year-on-year revenue growth, with fresh pork, convenience, and gourmet products showing positive volume momentum.

Economic news

Retail sales fell in the year to July at the fastest pace since April 2022, with the downturn only expected to get worse, according to the latest Distributive Trades survey from the Confederation of British Industry. The CBI’s monthly balance of retail sales fell to -25 from -9 in June. Meanwhile, the balance of expectations for the month ahead slumped to -32 from zero.

In response to concerns raised by the Competition and Markets Authority (CMA) over potential anti-competitive practices, Amazon has offered to implement changes to the way it treats third-party sellers using its Marketplace platform in the UK, it emerged on Wednesday. The CMA launched an investigation in July last year after receiving complaints that Amazon was allegedly abusing its dominant position in the UK's online retail market.

Britain's manufacturers grew more positive over the latest quarter, but investment intentions weakened as more companies complained of higher finance costs, a business lobby group said. Indeed, the share of firms citing financing costs as a barrier to investment reached its highest level since 1991.

UK consumer confidence has hit its highest level in 18 months, a survey released by PwC on Tuesday showed. According to research carried out at the beginning of July, confidence now sits at -13 versus -25 in Spring after the budget. It’s also a 31-point improvement on last September and a 32-point improvement since the beginning of January 2023.

Activity levels in the UK's manufacturing and services sectors slowed sharply in July, closely followed survey results showed. The latest survey readings led S&P Global chief business economist, Chris Williamson, to conclude that: "The UK economy has come close to stalling in July which, combined with gloomy forward-looking indicators, reignites recession worries."

International events

The German economy stagnated in the three months to June, according to figures released by Destatis on Friday. Gross domestic product was unchanged in the second quarter, coming in below expectations of 0.1% growth.

The European Commission opened a formal investigation into Microsoft on Thursday, to assess whether the tech giant had violated EU competition rules. It said the investigation was focussed on Microsoft's bundling of its communication and collaboration tool Teams with the widely-used business software suites Office 365 and Microsoft 365.

Orders for goods made to last for more than three years surged last month, driven by orders for civilian jets. According to the U.S. Department of Commerce, in seasonally adjusted term durable goods orders jumped at a month-on-month pace of 4.7% to reach $302.5bn.

The U.S. jobs market tightened slightly during the previous week, contrary to expectations. According to the U.S. Department of Labor, initial unemployment claims slipped by 7,000 over the week ending on 22 July to reach 221,000.

The European Central Bank raised interest rates as expected, but judged that inflation was still set to remain too high for too long. Nonetheless, as ECB President, Christine Lagarde, said at her post-meeting press conference, the central bank was now in 'data dependent' mode.

German consumer sentiment is expected to stabilise in August amid hopes of a decline in inflation, according to a survey released on Thursday by market research group GfK. GfK’s forward-looking consumer sentiment index for next month rose to -24.4 from a revised -25.2 in July. This was ahead of expectations for a reading of -24.7.

The Federal Reserve hiked interest rates as expected on Wednesday and left the door open to further tightening if needed. The target range for the Fed funds rate was raised by 25 basis points to 5.25-5.50% - a 22-year high.

New home sales in the U.S. undershot economists' forecasts by a large margin last month. According to the U.S. Department of Commerce, in seasonally adjusted terms, new home sales declined at a month-on-month pace of 2.5% to reach an annual rate of 697,000.

Home prices in the U.S. rose in May, led by gains in the largest cities, the results of a closely watched survey showed. In seasonally adjusted terms, S&P's Core Logic Case Shiller National Home Price Index increased at a month-on-month clip of 0.7%.

Consumer confidence in the U.S. jumped in July, breaking out of the sideways range that had been seen throughout much of the past year, the results of a survey showed. The Conference Board's consumer confidence index increased from a reading of 110.1 for June to 117.0 in July.

The global economy is heading for a softer landing than first feared after the International Monetary Fund on Tuesday upgraded its growth forecast for the year. Global growth for 2023 has been revised upwards to 3% from 2.8% three months ago. The 3% growth forecast for 2024 was left unchanged.

German business sentiment deteriorated further in July, according to a survey released on Tuesday by the Ifo Institute. The business climate index fell to 87.3 from a revised 88.6 in June, coming in below expectations for a reading of 88.0.

Activity levels in the single currency bloc's factory and services sectors slowed further in July, closely followed survey results showed. The HCOB 'flash' Eurozone composite Purchasing Managers' Output Index, which tracks production from both sectors, dipped from a reading of 49.9 for June to 48.9 last month.

Reporting by staff and contributors for Sharecast.com.