Weekly review

The FTSE 100 ended the week down 102.67 points, or 1.22%, closing at 8,317.59 on Friday.

Equity view

AJ Bell said on Friday that founder Andy Bell sold 7.5m shares in the investment platform in a placing at 375p each, raising around £28.1m. The placing was conducted through an accelerated bookbuild, with Deutsche Numis acting as sole bookrunner. Following completion, Andy Bell will hold just over 77.3m shares in AJ Bell, which represents a stake of approximately 18.7%.

Intertek backed its full-year expectations on Thursday as it hailed a strong start to the year, with 7% growth in like-for-like revenue, driven by a recovery in the consumer products segment. In the four months to the end of April, total group revenue rose 7.5% at constant currency to £1.1bn. Within that, the consumer products arm saw 6.2% growth to £297.6m.

A court in Illinois has ruled in favour of GSK in the first Zantac case to go to trial, the UK drugs giant confirmed on Friday. Along with other drug manufacturers, GSK is facing thousands of lawsuits over ranitidine, the active ingredient in heartburn medication Zantac, on claims that it causes cancer.

Abrdn announced a leadership transition on Friday, with group chief executive officer Stephen Bird stepping down. The FTSE 250 company said that effective immediately, its current group chief financial officer Jason Windsor had been appointed as interim group CEO, pending regulatory approval.

Budget airline Wizz Air said on Thursday that it returned to profit in the year to the end of March amid "sustained" demand. The company swung to a profit of €365.9m from a loss of €535.1m a year earlier as revenue jumped 30.2% to €5bn. Passenger numbers rose 21.4% during the year to a record 62 million. The load factor - which gauges how the full planes are - improved to 90.1% from 87.8%.

Johnson Matthey posted a fall in full-year underlying profit on Thursday as it was hit by lower metals prices. In the year to the end of March, underlying operating profit declined to £410m from £465m as PGM (platinum group metals) prices fell. Excluding the £85m impact from PGM prices, underlying operating profit was 11% higher on the year, "driven by transformation benefits and higher pricing".

National Grid shares were sliding on the release of its full-year results on Thursday morning, as it announced an equity raise of £7bn through a rights issue to support its future investments. The FTSE 100 company reported underlying operating profit of £4.8bn for the year ended 31 March, marking a 4% increase at actual exchange rates, driven by revenue growth in UK electricity transmission and higher rates in New York and New England.

Food group Bakkavor lifted its full-year profit guidance on Thursday as it hailed a "strong" first-quarter performance. In an update for the 13 weeks to 30 March, the company said group like-for-like revenue rose 3.2% to £543.3m, mainly driven by the UK, which saw 4.1% LFL growth to £458.4m.

RS Group saw annual profits drop by a quarter, which the industrial and electrical products provider blamed on weakness in global industrial production and the unwinding of unusual post-pandemic trading tailwinds. Adjusted operating profit slumped by 25% on a like-for-like basis to £312m in the 12 months to 31 March, as LFL revenues fell 8% to £2.94bn and the adjusted operating profit margin fell to 10.6% from 13.5%.

Marks & Spencer posted a jump in full-year sales and profits on Wednesday as the retailer’s turnaround efforts bore fruit. In the 52 weeks to 30 March, profit before tax and adjusting items rose 58% to £716.4m, with revenue up 9.3% to £13bn. Food sales grew 13% during the year, while clothing and home sales rose 5.3%.

Water group Severn Trent said it delivered an "industry-leading performance" with strong profit and revenue growth in the year where it invested more than ever before, helping the company to lift its final dividend by 9%. Group turnover totalled £2.34bn, up from £2.17bn the year before, driven mainly by higher revenues in the Regulated Water and Wastewater business.

SSE reported a “strong performance” in its preliminary results for the year on Wednesday, with earnings per share coming in at the top end of guidance despite profits slipping. The FTSE 100 company said adjusted operating profit for the 12 months ended 31 March stood at £2.43bn, reflecting a 4% decrease, while profit before tax remained stable at £2.18bn.

Home improvement retailer Kingfisher has said that first-quarter like-for-like sales were down on last year on the back of weakness in France, with the decline picking up pace early into the second quarter. Kingfisher said it was cautious over the market outlook for 2024 due to the lag between housing demand and home improvement demand; it still forecasts negative to flat growth in total addressable markets across its key regions.

AstraZeneca has unveiled medium-term growth targets to nearly double group revenues by the end of the decade as it predicts significant growth from existing oncology, biopharmaceuticals and rare disease portfolios. The pharma giant said it expects total revenues to hit $80bn by 2030, helped by the launch of 20 new medicines over the year six years, compared with $45.8bn in 2023.

Advanced Energy said on Tuesday that it has made three possible all-cash offers for XP Power, the last of which valued the group at £468m. The Colorado-based company made an initial offer at 1,700p per share, or £339m, in October 2023. In November of the same year, it offered 1,850p per share, or £369m. Its latest offer, at 1,950p per share, was made on 7 May.

Smiths Group reported an acceleration in sales growth in the third quarter despite tough comparators with last year, as the engineering firm reaffirmed its growth expectations for the full year. The company reported organic revenue growth of 7.7% in the third quarter to 3 May, up from 3.9% in the first half, taking the growth rate for the first nine months of the fiscal year to 5.2%.

Hilton Food said trading in the year to date had been in line with expectations, with volumes and sales ahead of last year despite a challenging economic environment and lower raw materials prices in some of its markets. UK & Ireland volumes and revenue were ahead of last year, benefiting from a strong Easter trading period as well as slowing inflation and good growth in Ireland, while the momentum of turnaround at its UK Seafood operation continued, the company said in an update on Monday.

Real estate investment trust British Land has sold its 50% stake in Sheffield retail destination Meadowhall for £360m, offloading an asset it has held for 25 years. The sale gives partner Norges Bank Investment Management full control of the shopping centre, which British Land first purchased in 1999 for £1.07bn.

Keywords Studios said on Monday that it was "minded to accept" a £2.2bn takeover proposal from Swedish private equity firm EQT Partners if it makes a firm offer. Following press speculation over the weekend, Keywords confirmed it is in "advanced discussions" with a fund which is part of the EQT Group about a possible cash offer of 2,550p per share. This represents a 73% premium to the closing share price on Friday.

Shares in Kainos jumped by a tenth on Monday after the Northern Ireland-based software group reported an increase in annual profits and hiked its dividend for the year to 31 March, as it announced the departure of its chair Tom Burnet. Kainos reported an adjusted pre-tax profit of £77.2m, up 14% on the year before, helped by an improvement in the adjusted profit margin to 20% from 18%.

Economic news

Retail sales fell sharply in April, official data showed on Friday, compounding a revised fall a month earlier. According to the Office for National Statistics, retail sales volumes fell by 2.3% last month, following a 0.2% decline in March. That was revised down from its previous estimate of 0.0%. Analysts had been expecting a far smaller decline, of around 0.5%.

Average household energy bills are set to fall by £122 this summer, it was confirmed on Friday, after the regulator lowered the price cap. Announcing the price cap for the 1 July to 30 September period, Ofgem said typical bills would fall by just over 7%. As a result, a typical household paying by Direct Debit will now pay £1,568 per year from July.

UK consumer confidence sparked in May, a long-running survey showed on Friday, as households become more upbeat about the economy and their finances. The latest GfK consumer confidence index, published on Friday, rose two points in May to -17. Within that, expectations for the general economic situation over the next year increased by four points to -17. The forward-looking personal finance situation also jumped, up five points to 7.

The UK’s under-pressure manufacturing sector rebounded in May, a closely-watched survey showed on Thursday. The latest S&P Global flash UK manufacturing PMI came in at 51.3, up from 49.1 in April and a 22-month high. The output index also pushed into positive territory, rising to a 25-month high of 52.7 from April’s 49.4.

House prices edged higher in March, government data showed on Wednesday, as the UK market continued to recover. According to the latest UK House Price Index, released by the HM Land Registry, house prices rose by 0.7% on average on February 2024. Year-on-year, prices were 1.8% higher, reversing February’s 0.2% dip.

Public borrowing soared by more than expected in April, official data showed on Wednesday, on the back of lower National Insurance receipts. According to the Office for National Statistics, public sector net borrowing (excluding public sector banks) rose £1.5bn year-on-year to £20.5bn, the fourth-highest April borrowing since monthly records began in 1993.

Ofcom announced on Wednesday that it has fined BT Group £2.8m, for failing to provide more than one million customers with clear and essential contract information before signing up for services with its subsidiaries EE and Plusnet. The communications regulator said the breach of consumer protection rules affected at least 1.1 million customers who were not given contract details required by regulations implemented on 17 June 2022.

Consumer price inflation fell less than expected in April, according to figures released on Wednesday by the Office for National Statistics, dashing hopes of a summer rate cut. Consumer price inflation dropped to 2.3% from 3.2% the month before, hitting its lowest level since July 2021 and edging closer to the Bank of England’s 2% target. However, it was above the 2.1% expected.

Output volumes in the UK manufacturing sector rose in the three months to May for the first time since November 2022, according to the latest Industrial Trends survey from the Confederation of British Industry. Order books remained under pressure, however, with both total and export order books weakening in May.

The International Monetary Fund (IMF) revised its growth forecast for the UK economy on Tuesday, projecting a “soft landing” with a faster-than-expected recovery following last year's mild recession. In its latest outlook for the UK, the Washington-based fund said it now expected gross domestic product (GDP) to grow by 0.7% in 2024 - an upgrade from its previous estimate of 0.5%.

UK grocery price inflation fell for the fifteenth month in a row in the four weeks to 12 May, to 2.4%, its lowest level since October 2021, according to data released on Tuesday by Kantar. This was down from 3.2% in the previous four-week period. Grocery price inflation is now just 0.8 percentage points higher than the 10-year average of 1.6% between 2012 and 2021, which is just before prices began to climb.

International events

Germany's economy grew 0.2% in the first quarter of 2024 compared with the final three months of last year, confirming a flash estimate, the Federal statistics office said on Friday. Fourth-quarter GDP contracted by 0.5%. The first-quarter figure compares with 0.3% growth in the same period in 2023.

Economic activity in the US picked up unexpectedly in May, the results of two surveys revealed. S&P Global's preliminary composite Purchasing Managers' Index jumped from a reading of 51.3 for April to 54.4 in May (consensus: 51.1) - a 25-month high. Services activity accelerated the most with the corresponding PMI jumping from 51.3 to 54.8.

Americans lined up for state unemployment benefits at a decelerated clip in the week ended 18 May, according to the Labor Department. Initial jobless claims fell by 8,000 to 215,000, below market expectations for a reading of 220,000 and considerably below elevated levels seen earlier in the month.

Turkey’s central bank kept interest rates unchanged at 50% on Thursday for the second month in a row, as expected. The Bank said in a statement: "The effects of monetary tightening on credit conditions and domestic demand are closely monitored. Considering the lagged effects of the monetary tightening, the Committee decided to keep the policy rate unchanged, but reiterated that it remains highly attentive to inflation risks.

The economic recovery in the eurozone gathered pace in May, according to preliminary figures released on Thursday. The HCOB flash eurozone composite PMI output index rose to 52.3 from 51.7 in April, marking the third month in a row that business activity expanded. A reading above 50.0 signals expansion, while a reading below indicates contraction. Analysts were expecting a reading of 52.0.

Sales of second-hand homes in the US dipped by slightly more than expected last month. According to the National Association of Realtors, existing home sales shrank at a month-on-month pace of 1.9% in April to reach 4.14m. Economists had pencilled in a reading of 4.21m. Sales also declined by 1.9% in comparison with their year earlier level.

China could raise import tariffs on large combustion engine cars, it was reported on Wednesday, weighing on the share price of European automakers. In an interview with China’s Global Times, Liu Bin, chief expert at the government-affiliated China Automotive Technology & Research Center, said a tariff rate of 25% would be in line with World Trade Organization rules. The current import tariff on large cars is 15%.

Construction output in the eurozone rose marginally in March while the previous month's increase was revised significantly lower, according to figures released on Tuesday by Eurostat. Production in construction rose by just 0.1% month-on-month across the single-currency region in March, after a revised 0.4% increase in February, revised down from the initial estimate of 1.8%.

Germany wholesale price deflation accelerated more than expected in April, according to figures released by Destatis, the Federal Statistical Office, on Tuesday. The producer price index fell at an annual rate of 3.3% last month, after a 2.9% decline in March. This was the 10th straight month of falling prices and lower than the consensus forecast for a year-on-year fall of 3.2%.

Reporting by Sharecast.com staff and contributors.