Weekly review

The FTSE 100 ended the week up 13.65 points, or 0.18%, closing at 7,478.19 on Friday.

Equity view

The Restaurant Group (TRG) has announced that its chair Ken Hanna is stepping down next year "due to personal reasons". The company, which owns 380 restaurants and pubs across the UK including Wagamama and Frankie & Benny’s, said Hanna has decided not to seek re-election at its next AGM in 2024, but will stick around until a successor is appointed.

UK housebuilder Berkeley on Friday reaffirmed full-year earnings guidance but said private sales reservations were down 35% due to rising interest rates and political volatility. In a trading statement ahead of its annual general meeting, the group said it expected to deliver pre-tax profits of at least £1.05bn across the current and next financial years, likely to be weighted slightly to full-year 2024.

Corporate and public sector technology provider Computacenter reported total first-half revenue of £3.59bn on Friday, making for a 26.8% increase from the previous year. The FTSE 250 company said its technology sourcing segment saw a substantial uptick, with gross invoiced income reaching £4.34bn, a 34.9% increase.

Shares in Petershill Partners fell in morning trading on Friday, after the investment firm trimmed part of its full-year guidance. The London-listed business, which specialises in private equity and other private capital strategies, reported total income of $138m for the six months to 30 June, down from $171m a year previously.

British American Tobacco on Thursday said it had finally signed a deal to sell its Russian and Belarusian businesses to a consortium led by local management. The owner of Lucky Strike and Dunhill brands announced last year that the ownership of its operations in Russia "was no longer sustainable in the current environment" after Moscow's unprovoked invasion of Ukraine.

Insurance group Beazley said it remains on track to hit guidance after delivering record profits in the first half, though its combined ratio jumped. Pre-tax profit totalled $366.4m in the six months to 30 June, up only slightly from $364.9m a year earlier, despite insurance written premiums rising 13% to $2.92bn.

Paper and packaging company Smurfit Kappa confirmed on Thursday that it is in merger talks with US peer WestRock. No financial details were given but a report by the Wall Street Journal suggested the combined group could be worth around $20bn.

Electrical retailer Currys saw its sales decline ease slightly in the first quarter but noted a continuing "challenging" trading environment, especially within its Nordics division. The company, which operates 823 stores across eight countries, reported a 4% drop in like-for-like (LFL) sales for the first 17 weeks of the financial year, ended 26 August. That compared with the 7% decline registered during the last financial year as a whole.

Stationery and books retailer WH Smith said its full-year figures will be in line with expectations as strong trading in at its airport and train station locations offset a weak performance on the high street. The company, which operates over 1,700 stores worldwide of which 523 are on the UK high street (at last count in February 2023), said group revenues for the year ended 31 August were up 28% year-on-year, rising 18% on a like-for-like basis.

Oxford Nanopore Technologies saw its first half loss widen sharply as the company lost legacy Covid testing revenues. But its Life Science Research Tools arm reported robust growth.

Pharma giant AstraZeneca said it is "working closely" with US regulators to clarify some details of its Ultomiris drug as it hopes to bring the treatment to market as quickly as possible for people suffering from the rare disease, neuromyelitis optica spectrum disorder (NMOSD). Ultomiris is already approved for the treatment of certain adults with NMOSD in the EU, Japan and other countries, but is only available in the US for a select few – "adults with generalised myasthenia gravis (gMG) who are anti-acetylcholine receptor (AChR) Ab+, and certain adults and children with paroxysmal nocturnal haemoglobinuria (PNH) or atypical haemolytic uraemic syndrome (aHUS)," the company explained.

Ashmore reported a fall in annual profits as assets under management (AuM) declined 13% as customers withdrew their cash amid volatile markets. Pre-tax profit was down 6% to £111.8m, but offset by higher interest earnings as central banks hiked rates to combat inflation while AuM came in at $60bn, with the movement attributable to net outflows of $11.5bn.

TI Fluid Systems said it had agreed to buy Hungarian firm Cascade Engineering Europe for €25.4m (£21.7m) in cash. Cascade makes thermal fluid connectors and other plastic injection moulded components for the automotive industry. TI Fluid said the business had a "strong reputation for its technical expertise and product quality, with in-house capabilities from design and development to tooling, prototyping and serial manufacturing".

Consumer goods firm PZ Cussons has offered to buy out the minority-held shares of PZ Cussons Nigeria (PZCN) for £22.8m with a plan to de-list the business from the Nigerian stock exchange. Cussons said buying the 26.73% stake "will significantly simplify and strengthen its business in Nigeria, putting in place a sustainable structure and platform to maximise long-term growth and value".

Caledonia Investments said it was selling its majority stake in retail wealth manager Seven Investment Management (7IM), to the Ontario Teachers' Pension Plan Board for £255m. Caledonia is expected to receive cash proceeds of around £255m, net of transaction expenses, for the sale of its ordinary and preference shares in 7IM.

Packaging company DS Smith said on Tuesday that trading since 1 May has been in line with its expectations despite "challenging" end markets, amid continued resilient pricing and strong cost control measures. In a brief update, the company said like-for-like performance in corrugated box volumes has improved since the start of the financial year, with clear signs of reduction in customer destocking, although it remains below the prior year comparative.

Online trading platform CMC Markets said it had appointed Albert Soleiman as chief financial officer, replacing Euan Marshall, who has retired from the board. Soleiman first joined CMC in 2005 and became group head of tax in 2008. In 2019 he joined Bitfury UK as global tax director before rejoining CMC in 2020 to lead the launch of the CMC Invest business.

Engineering company Wood Group said it had struck a $330m services agreement with North Sea oil and gas producer Harbour Energy. Under the deal, Wood will provide engineering, procurement and construction and operations and maintenance services, including digital and decarbonisation solutions, for a number of Harbour's offshore assets.

FTSE 250 facilities management group Mitie is spending £31.5m to buy Stevenage-based JC Engineering, a specialist in cooling systems for data centres. Mitie, which provides everything from commercial cleaning to engineering maintenance and landscaping, announced on Monday the acquisition price comprises an initial payment of £21m and deferred payments of up to £10.5m over three years, linked to performance, and will be funded by existing loan facilities.

Primary Health Properties said on Monday that it has appointed Mark Davies, ACA, as chief executive officer with effect from the conclusion of its annual meeting on 24 April. He will succeed Harry Hyman, the founder of PHP, whose departure was announced in December last year.

Economic news

Recruitment eased in the UK last month, a survey showed on Friday, with the number of workers hired through agencies falling at the steepest rate for more than three years. According to the latest UK Report on Jobs from the Recruitment and Employment Confederation, the trade body, and KPMG, the hiring of permanent staff fell by the most since June 2020. The permanent staff placements index was 38.9, down from 42.4 in July and well below the 55.3 it averaged in 2022.

The UK competition regulator has said that the Civil Aviation Authority (CAA) made some errors in determining the lower price cap that Heathrow should charge airlines, but said that most of its calculations had been correct. The ruling, by the Competition and Markets Authority (CMA), is expected to have only a "small net impact" on the price cap, the regulator said on Friday, which will come as a blow to both Heathrow Airport Limited (HAL) and a number of airlines that appealed the proposed new fees.

Annual UK house prices suffered their worst fall in August since 2009 amid rising mortgage costs, according to data released by Halifax on Thursday. House prices fell 4.6% on the year following a 2.5% decline in July. On the month, house prices were down 1.2% in August - the largest monthly fall since November 2022 - following a 0.4% dip a month earlier.

Any changes to pension arrangements under government plans to stimulate the economy with workers' cash should be done with “extreme caution”, the Association of British Insurers (ABI) warned on Wednesday. Finance Minister Jeremy Hunt has called for views on potential changes to the pension market could encourage further investment in the UK businesses, with an emphasis on startups.

UK construction activity rose only marginally in August, as growth slowed from the previous month, with housebuilding struggling and new orders dropping at their fastest rate in over three years. The S&P Global/CIPS UK construction purchasing managers' index (PMI) fell to 50.8 last month, down from 51.7 in July, signalling only a slight increase in overall construction output.

UK communications regulator Ofcom announced plans to review the nation's universal postal service on Tuesday, as a result of the changing needs and habits of postal users. Ofcom said the universal postal service, underpinned by the Postal Services Act of 2011, mandated International Distributions Services subsidiary Royal Mail to deliver letters six days a week, and parcels five days a week, to every address in the UK at uniform, affordable prices.

The UK's new car market saw robust growth of 24.4% in August, as 85,657 new vehicles were registered, according to fresh data from the Society of Motor Manufacturers and Traders (SMMT). That growth marked the sector's entry into its second year of expansion, although it remained 7.5% below pre-pandemic levels.

Business activity in the UK services sector fell in August for the first time since January amid higher interest rates, according to a survey released on Tuesday. The S&P Global/CIPS services purchasing managers’ index declined to 49.5 from 51.5 in July, coming in below the 50.0 mark that separates contraction from expansion but ahead of consensus expectations and the first estimate of 48.7.

UK retail sales growth jumped in August, as an improvement in consumer confidence drove spending on health and beauty products, and food and drink. According to data out Tuesday from the British Retail Consortium (BRC), total retail sales increased at an annual rate of 4.1% last month, accelerating from the 1.5% growth registered in July after disappointing weather dampened footfall for many retailers.

International events

German inflation eased to 6.1% in August - confirming initial readings - as elevated food and energy prices continued to outstrip the overall rate, according to official data released on Friday. The reading compared with July's 6.1%. On a harmonised basis CPI rose 6.4% year on year, also confirming the provisional result.

Initial claims for jobless benefits in the US unexpectedly fell last week to their lowest levels since February, according to statistics from the Department of Labor released on Thursday. The number of people filing to receive unemployment insurance benefits for the first time declined by 13,000 in the week to 2 September to 216,000, down from an upwardly revised 229,000 the week before (initial estimate 228,000).

The Eurozone economy barely grew in the second quarter, while job creation eased, in fresh signs that the single-currency bloc will slip into recession later this year. GDP expanded by just 0.1% between April and June, according to Eurostat, a downward revision from an initial estimate of 0.3% growth, after growing by just 0.1% in the first quarter.

German industrial production fell again in July as manufacturing in Europe's largest economy continued its struggles to recover from high inflation and costs. Production fell by 0.8% in July compared to the previous month, led by capital and consumer goods. Analysts had forecast a 0.4 - 0.5% decline.

China exports fell for the fourth successive month in August as weak demand and persistent supply chain issues continued to dog the world’s second-largest economy in its efforts to rebound from the impacts of the Covid pandemic. Exports fell 8.8% year on year to $284.9bn last month, according to customs data released on Thursday. The decline compared to a 14.5% fall in July.

Services sector activity in the US slowed a tad more than anticipated during the previous month, the results of a survey showed. S&P Global's services Purchasing Managers' Index slipped from a July reading of 52.3 to 50.5 in August (consensus: 51.0).

Retail sales across the Eurozone fell by more than expected in July, official data showed on Wednesday. According to Eurostat, the European Union’s statistics office, the seasonally-adjusted volume of retail trade decreased by 0.2% in July, following an upwardly-revised 0.2% rise in June. Analysts had been expecting retail sales to fall by 0.1% in July.

Eurozone construction activity contracted again in August, according to a survey released on Wednesday. The HCOB construction purchasing managers’ index dipped to 43.4 from 43.5 in July, coming in below the 50.0 that separates contraction from expansion and falling at the fastest pace this year.

German factory orders tumbled in July, according to figures released on Wednesday by Destatis. Orders slid by 11.7% on the month following a revised 7.6% jump in June, and versus expectations of a 4% decline.

Saudi Arabia has extended its 1-million-barrels-per-day voluntary oil production cut until the end of the year, CNBC reported, citing the state-owned Saudi Press Agency. Riyadh first applied the reduction in July and has since extended it on a monthly basis. The cut adds to 1.66 million barrels per day of other voluntary crude output declines that some members of the Organisation of the Petroleum Exporting Countries (OPEC) have put in place until the end of 2024.

Output in the eurozone during August fell at its fastest rate in three years in August, with services survey data revised downwards from initial estimates and price inflation making a worrying return. The composite PMI in the eurozone slipped for the fourth straight month to a 33-month low of 46.7 in August, from 48.6 in July, below consensus estimates and the flash reading of 47.0, according to S&P Global.

Reporting by staff and contributors for Sharecast.com.