Weekly review

The FTSE 100 ended the week up 90.86 points, or 1.12%, closing at 8,237.72 on Friday.

Equity view

Events group Informa on Friday said it was on track to deliver earnings at the upper end of guidance as revenues grew by 10.1% in the year to date. Sales hit £1.4bn in the period, with a further £1bn of subscriptions/exhibitor revenue committed and visible in 2024, and strong events rebooking into 2025, the company said in a statement ahead of its annual general shareholder meeting.

UK advertising group M&C Saatchi has appointed Simon Fuller as chief financial officer, effective July 1, the company said on Friday. He will replace Bruce Marson, who will revert to the position of deputy CFO.

Shares in Britvic soared in early trading on Friday, after the soft drinks firm rejected a fresh approach from brewing giant Carlsberg Group. The FTSE 250 company confirmed it had received an unsolicited proposal from Carlsberg at 1,250p per share, valuing it at around £3.1bn.

Compass Group announced an agreement to repurchase up to $250m (£196.7m) of its ordinary shares on Friday. The FTSE 100 company said the buyback would be the second and final phase of the $500m share repurchase programme first announced with its full-year results on 20 November last year.

Paper and packaging company DS Smith reported a fall in annual profits driven by weak volumes and high inflation, but said it expected higher prices and demand would boost a recovery in the second half of the current year and into 2026. Pre-tax profit for the year to April fell by a quarter to £503m, while adjusted operating earnings were down 19% to £701m as customers cleared excess stock after the Covid pandemic.

Alpha Financial Markets Consultancy said on Thursday that it has agreed to be bought by private equity firm Bridgepoint for 505p per share in cash. The acquisition price values the group at about £626m and represents a premium of approximately 50.7% to the closing share price on 30 April, which was the last business day before the start of the offer period.

Food and beverage products group Tate & Lyle is to buy Atlanta-based pectin, gums and specialty ingredients firm CP Kelco from JM Huber Corporation for $1.8bn, giving the latter a 16% stake in the business. The deal, which includes CP Kelco's US, Chinese, Danish subsidiaries, "significantly accelerates Tate & Lyle's strategy to be a leading and differentiated speciality food and beverage solutions business", the UK group said in a statement.

Phoenix Group announced on Thursday that it has successfully completed the initial phase of its deleveraging programme, including a significant debt redemption and refinancing exercise. The FTSE 100 company said it was aiming to repay at least £500m of debt and achieve a Solvency II leverage ratio of around 30% by the end of 2026.

Precision instrumentation and controls group Spectris has said full-year profits will miss current market forecasts as a result of weaker-than-expected demand at its lab equipment division in the first half. Sales at the Malvern Panalytical division are expected to be £15m lower than previously expected in the first half, while operating profit has seen a £10m impact.

Telecoms tower company Helios Towers has announced a secondary placing of shares, in which stakeholders Newlight Partners and RIT Capital Partners sold a combined £43.2m of stock, causing the share price to sink on Wednesday. Newlight and RIT, which have not sold any shares in Helios Towers since the company's IPO in 2019, sold 37.6m shares in total at 115p each. The placing reduced their stakes to 13.2% and 3.2%, respectively.

Vodafone Group confirmed several days of speculation on Wednesday, as it announced the sale of 484.7 million shares in Indus Towers, representing 18% of Indus' share capital, through an accelerated bookbuild. The FTSE 100 telecoms giant said the transaction raised INR 153.0bn (€1.7n) in gross proceeds.

Young & Co’s Brewery struck an upbeat note on Wednesday, despite a slide in full-year profits, as it flagged a bumper summer of sport. The pub group said revenues had risen 5.4% in the year to 1 April to £388.8m, or by 3.4% on a like-for-like basis. Adjusted operating profits were ahead 9.4% at £57.3m.

Aerospace manufacturing group Melrose has appointed the former boss of British Land and veteran banker Chris Grigg as its chair designate. Grigg, who served as CEO of British Land between 2009 and 2020, is currently chair of the UK Infrastructure Bank, as well as the former CEO of Barclays Commercial Bank, Treasurer of Barclays Bank and prior to that a 20-year partner at Goldman Sachs.

Telecom Plus posted better-than-expected full-year pre-tax profit on Tuesday as customer and service numbers continued to grow. In the year to the end of March 2024, adjusted pre-tax profit rose 21.5% to £116.9m, coming in above market expectations of £96.2m. The company, which trades as Utility Warehouse, hailed customer growth of 14.1% to just over 1 million, while service numbers increased by 328,949 to just over 3.1m.

Equipment rental group Ashtead broadly met consensus estimates with double-digit annual revenue growth, though profits did come in shy of expectations, as the company pointed to a further moderation of growth in the coming year. The company reported a 7% year-on-year increase in revenues in the fourth quarter ended 30 April to $2.63bn, with growth slowing from 9% in the third quarter and 16% in the first half.

AstraZeneca announced on Tuesday that the phase three ‘CAPItello-290’ trial for ‘Truqap’, or capivasertib, in combination with paclitaxel did not achieve its primary endpoints. The FTSE 100 pharmaceuticals giant said the study aimed to assess the efficacy of Truqap with paclitaxel against paclitaxel with placebo, in patients with advanced or metastatic triple-negative breast cancer (TNBC).

B&Q owner Kingfisher said it had appointed British Land chief financial officer Bhavesh Mistry to the same role at the home improvement company. Mistry will succeed current CFO Bernard Bot, who has decided to retire to further pursue his non-executive career. He has been with British Land since 2021 and was Deputy CFO of Tesco from 2018 to 2021.

Publishing, events and B2B consultancy group Ascential has said that trading is in line with expectations for the full year, helped by strong growth in marketing and fintech operations. The company, known for media titles like Retail Week and Drapers, along with events like Cannes Lions, said marketing revenues grew by more than 10% in the first half, helped by double-digit growth from Cannes Lions delegates and sponsorship.

Hikma Pharmaceuticals said on Monday that it has agreed to buy parts of Xellia Pharmaceuticals, a Copenhagen-based specialty company focusing on providing anti-infective treatments and other critical care therapies, for up to $185m. Hikma will buy parts of Xellia’s US finished dosage form (FDF) business and assets, including a commercial portfolio and pipeline of differentiated products, a manufacturing facility in Cleveland, Ohio, sales and marketing capabilities, and an R&D centre in Zagreb, Croatia.

Mission Group said in an update on Monday that trading between 3 April and 17 June had remained in line with the board's expectations. The AIM-traded company, which was holding its annual general meeting, highlighted several new business wins during the period, including high-profile clients such as Okta, Popeyes, FatFace, GoHenry, Mastercard, BNP Paribas, England Cricket Board, Guinness Homes, Fonterra, and McCarthy Stone.

Economic news

Growth in the UK private sector unexpectedly slowed in June, a closely-watched survey showed on Friday, as uncertainty around the general election weighed on business. According to flash data from S&P Global, the UK manufacturing output index hit a 26-month high, at 54.2, while the manufacturing PMI ticked up 0.2 points to an above-forecast 51.4.

UK retail sales rose more than expected in May, according to figures released on Friday by the Office for National Statistics. Sales rose 2.9%, versus expectations for a 1.5% jump. This followed a 1.8% decline in April - when rain kept shoppers away from the high street - which was revised from a 2.3% fall previously reported.

Underlying public-sector borrowing came in slightly lower than government forecasts last month, but still registered the third highest figure for a May on record, while debt swelled to its highest level in more than 60 years. The difference between public sector spending and income, minus public-sector banks, was £15.0bn in May, £0.8bn higher than May 2023, though under the £15.7bn forecast by the Office for Budget Responsibility and below the £18.4bn registered in April 2024.

UK consumer confidence strengthened in June, a long-running survey showed on Friday, as hopes for the economic recovery gained ground. The latest UK consumer confidence index from GfK was -14, up three points on May and well above June 2023, when it was -24. Within that, confidence in the economic situation over the next year jumped six points to -11.

The Bank of England left interest rates on hold on Thursday, as widely expected, despite falling inflation. The Monetary Policy Committee voted by a majority of seven to two to keep the cost of borrowing at a sixteen year-high of 5.25%. Data on Wednesday showed inflation had fallen back to the BoE’s 2% target for the first time in three years.

UK financial regulators have announced that they are keeping trading apps under review over concerns that they are encouraging risk-taking among users. The Financial Conduct Authority said on Thursday that an online experiment with more than 9,000 users found that so-called game-like features known as 'digital engagement practices' or DEPs can increase trading frequency and risk taking.

House prices in the UK rose for the fourth month in a row in April, according to figures out on Wednesday from the Office for National Statistics. Prices across the UK averaged £281,373 in the month of April, according to preliminary estimates, up 0.3% on March.

Annual consumer price inflation fell to 2% in May from 2.3% in April, in line with expectations, according to figures released on Wednesday by the Office for National Statistics. It marked the first time inflation has hit the Bank of England’s target since July 2021 and leaves the door open for a potential rate cut from the Bank this summer. Inflation peaked at 11.1% in October 2022, hitting its highest level since 1981.

Fresh data released on Tuesday revealed a slowdown in take-home grocery sales, which increased by just 1.0% over the four weeks to 9 June. The release from Kantar marked the slowest growth since June 2022, influenced by unseasonably wet weather and declining inflation.

The outlook for the UK's manufacturing sector has picked up after output and orders rose strongly in the second quarter, according to a survey from Make UK released on Monday. The Manufacturers' Organisation is now pointing to industry growth of 1.2% this year, outperforming the wider UK economy which is forecast to expand by just 0.9%.

International events

The eurozone’s nascent economic recovery unexpectedly slowed in June, official data showed on Friday, weighed down by weakness in the manufacturing sector. The flash HCOB composite PMI output index for June came in at 50.8, down on May’s 52.2 and significantly below expectations for 52.5. It was also a three-month low.

The growth in Japanese consumer prices accelerated sharply in May but underlying inflation slowed more than expected, adding uncertainty to the interest-rate outlook. The annual rate of consumer price inflation rose to a three-month high of 2.8% last month, up from 2.5% in April and in line with forecasts. Core inflation, which includes fuel prices but excludes the cost of food, rose to 2.5% from 2.2%.

Both housing starts and building permits in the United States dropped sharply in May to their lowest levels since mid-2020, according to data released on Thursday. Housing starts declined 5.5% to an annualised rate of 1.277m last month, after growing by 4.1% to a revised 1.352m in April.

Sales of battery-powered electric cars in the European Union fell sharply in May, industry data showed on Thursday, as demand in Germany softened notably. According to the European Automobile Manufacturers’ Association (ACEA), registrations of battery electric cars fell by 12% last month, to 114,308 units, while their market share eased to 12.5% from 13.8% a year previously.

Norway's central bank kept interest rates unchanged on Thursday and warned that inflation will likely remain elevated for some time, with monetary policy likely to remain stable until at least the end of the year. Norges Bank's Monetary Policy and Financial Stability Committee kept its main policy rate at 4.5% – a level which it has maintained since January.

The Swiss National Bank cut its key rate on Thursday to 1.25% from 1.5%. "Inflation has risen slightly since the last monetary policy assessment, and stood at 1.4% in May," it said in a statement.

Producer-price deflation in Germany softened in May to its lowest level in 11 months, according to data out on Thursday from the Federal Statistical Office, Destatis. The producer price index (PPI) fell at an annual rate of 2.2% in May, following a 3.3% drop in April. The consensus forecast was for a decline of 2.0%.

China left key lending rates unchanged at its monthly fixing, in line with expectations. The People's Bank of China held its one-year and five-year loan prime rates unchanged at 3.45% and 3.95% respectively. The one-year LPR is used for most corporate and household loans, while the five-year is benchmarked for property mortgages.

Eurozone construction output fell 0.2% in April 2024 compared with the prior month, according to flash estimates from Eurostat, the statistical office of the European Union. Across the broader EU output was up 0.2%. On an annual basis April production fell by 1.1% in the euro area and by 0.9% in the EU. In March 2024, production in construction fell by 0.5% in the euro area and by 0.6% in the EU.

Industrial production in the States shot higher last month on the back of increased levels of output in manufacturing and from utilities. According to the Department of Commerce, industrial production was ahead by 0.9% in May in month-on-month terms. Economists had pencilled in a rise of 0.3%.