Weekly review

The FTSE 100 ended the week up 198.47 points, or 2.46%, closing at 8,262.08 on Friday.

Equity view

Biopharma giant GSK has announced that Japanese regulators have expanded the approved use of its Arexvy vaccine for severe respiratory syncytial virus (RSV) disease to a wider age range. Arexvy, which from September 2023 had been approved in Japan for adults 60 and over for the prevention of RSV disease, can now be administered to 50-59 year olds, according to the Ministry of Health, Labour and Welfare.

Workspace Group reported a 4.3% increase in underlying net rental income to £60.2 for its first half on Friday, driven by strong customer demand and portfolio management. The FTSE 250 company said trading profit after interest rose 5.1% to £32.7m for the six months ended 30 September, as it hiked the interim dividend per share by 4.4% to 9.4p.

DFS Furniture hailed an improvement in trading on Friday as it announced the appointment of an interim chief financial officer. In its full-year results in September, the furniture retailer had pointed to an improvement in trading in the final quarter of the period, with year-on-year growth in its order intake.

Financial services firm Tavistock Investments revealed on Friday that it has acquired London and Bath-based asset manager Alpha Beta Partners in a deal worth up to £18.0m. Tavistock said the total consideration to be paid for ABP will be directly linked to its financial performance over the next five years, with an initial payment of £6.0m at completion of the acquisition and the maximum potential consideration capped at £18.0m, payable in cash.

Postal and courier giant International Distribution Services returned to an adjusted operating profit in the first half, as revenues increased across the group and losses at Royal Mail reduced. The company – which is currently undergoing a takeover by EP Group, the investment vehicle of billionaire Czech businessman Daniel Kretinsky – said that Royal Mail was on track to return to a profit for the full year, though the outlook for parcel services division GLS remained uncertain with the macro environment across Europe still "challenging".

Frasers Group, the largest shareholder in Boohoo with a 28.01% stake, intensified its call for the removal of Boohoo’s executive chairman Mahmud Kamani on Thursday. In an open letter to Boohoo shareholders, Frasers urged them to vote for Kamani’s removal, and to appoint Mike Ashley and James Lennon to the board at an extraordinary general meeting set for 20 December.

Safety equipment and hazard detection products group Halma has raised its interim dividend by 7% after a record first-half performance which saw sales top the £1bn mark, as it retained its guidance for the full year. Halma saw revenues 13% year-on-year to £1.07bn in the six months to 30 September, as strong growth in the safety and environmental/analysis sectors outweighed only a marginal increase in the healthcare sector.

Mitie reported a jump in first-half profits and revenue on Thursday as it hailed record contract wins and renewals. In the six months to 30 September, operating profit before other items rose 14% to £101m, with revenue also up 14%, to £2.4bn. This includes 8% organic growth, driven mainly by new contract wins, scope increases and pricing, alongside a 6% contribution from acquisitions. The company pointed out that its organic growth was "significantly ahead" of core facilities management market growth of around 4% per year.

Homewares retailer Dunelm on Wednesday said it had bought Irish soft furnishing chain Homefocus for an undisclosed sum. Homefocus trades under the 'Home Focus at Hickeys' brand, with 13 physical stores across Ireland and an online operation. “The acquisition is an attractive opportunity for Dunelm to connect with more customers by entering a new geography, with a homewares market of more than £1bn,” the company said.

House builder Crest Nicholson said it expected full-year earnings to be at the lower end of the guidance due to a higher proportion of affordable homes being delivered and moved to trade out of low margin sites. The company forecast adjusted pre-tax profits of £22m - £29m.

Sage Group has reported solid full-year growth on Wednesday, driven by the execution of its subscription-based recurring revenue model and disciplined cost management. The FTSE 100 software company said annualised recurring revenue (ARR) rose 11% to £2.34bn, while underlying total revenue also increased, by 9% to £2.33bn.

Severn Trent has reported a double-digit increase in first-half profits and said it expects capital investment to hit the top end of guidance this year, putting it in a strong position for the next five-year regulatory cycle, AMP8. The Coventry-based group, which supplies 4.6m households and business across the Midlands and Wales, said profit before interest and tax totalled £297.8m in the six months to 30 September, up 16.7% from £255.1m the year before.

Events and digital services group Informa on Tuesday reaffirmed its recently upgraded full-year guidance as revenues in the first 10 months of the year grew 10.7% and said strong forward bookings were providing momentum into 2025. The company forecast double-digit underlying revenue growth; updating for the now completed Ascential acquisition and currency movements which would take full year group Revenue guidance to at least £3.5bn and adjusted operating profit to £975m.

Bodycote said on Tuesday that full-year operating profit was set to be in line with market expectations as it hailed a "resilient performance in challenging end markets". In an update for the period from 1 July to the end of October, the provider of heat treatment and specialist thermal processing services said group revenue grew by 0.2% organically, excluding surcharges.

Cigarette and maker Imperial Brands on Tuesday posted a 4.5% rise in full-year adjusted operating profit as revenues from new products such as vapes and nicotine pouches surged by more than a quarter. Profit for the year to September 30 came in at £3.5bn. On an adjusted basis earnings were up 4.6% to almost £4bn. The company, which makes Winston cigarettes, vapes and nicotine pouches said it expected to deliver tobacco and new product net revenue growth at low single-digits on a constant currency basis.

Landscaping and building supplier Marshalls on Tuesday unveiled a new strategy targeting an operating margin of 15% and outperformance the wider construction market by 2 – 4%. In a statement ahead of a capital markets day for investors, Marshalls said it would maintain “a disciplined capital allocation policy focused on optimising long-term shareholder value”.

Scientific instrument company Judges Scientific has slashed its profit guidance for the full year on the back of delays in the timing of certain orders. Judges Scientific had said back in July that 2024 adjusted earnings per share would be 5-10% below the company-compiled consensus forecast at the time of 384.6p, indicating a level of 346.14p to 365.37p, down from 374.6p in 2023.

Real estate group LondonMetric Property has continued its capital recycling strategy with the sale of £58m-worth of non-core assets and the acquisition of a retail park in Essex. The company said on Monday that it has disposed of 24 properties across various non-core sectors – including an Asda superstore in Halesowen, a leisure asset in Hamilton and three Travelodge hotels – for a total of £57.9m, representing a 6% profit over prevailing book values.

Elementis announced on Monday that its chief executive officer Paul Waterman would step down following nine years at the helm. The FTSE 250 specialty chemicals firm said the decision came after discussions with the Board, with both parties agreeing that it was the right time for a leadership transition. Waterman would remain in his role until a successor was appointed, with plans for his departure to take place no later than the company's annual general meeting next April.

Drugmaker AstraZeneca said on Monday that its Tagrisso asset had received a recommendation for EU approval on the back of LAURA Phase III trial results, which revealed it had extended median progression-free survival to more than three years. AstraZeneca said Tagrisso had been recommended for approval in the EU by the Committee for Medicinal Products for Human Use for patients with unresectable epidermal growth factor receptor-mutated lung cancer.

Economic news

The Financial Conduct Authority has urged life insurers to avoid "unnecessary delays" when settling life insurance claims quicker and improve their customer experience. In its review of industry-wide bereavement claim processes, the financial regulator said firms took between 53 and 122 days on average to process and settle life insurance claims.

UK business output contracted in November for the first time in more than a year, according to a survey released on Friday. S&P Global’s flash UK composite output index - which measures activity in both the manufacturing and services sectors - fell to 49.9 from 51.8 in October. This marked the lowest level since October 2023 and was below the 50.0 mark that separates contraction from expansion.

The energy price cap for the first quarter of 2025 has been raised by 1.2%, according to a statement on Friday by Ofgem, meaning that the average household could pay up to £1,738 a year on average for electricity and gas. The widely expected increase, which affects anyone paying by standard credit, direct debit, a prepayment meter or an Economy7 meter, is the second consecutive hike in the price cap, following a similar move in October.

UK retail sales fell more than expected in October amid uncertainty ahead of the Budget, according to figures released on Friday by the Office for National Statistics. Retail sales fell by 0.7% on the month in October following a 0.1% increase the month before. Economists had been expecting a 0.3% decline. September’s gain was revised down from 0.3%.

Consumer confidence jumped in November, a long-running survey showed on Friday, after uncertainty seen in the run-up to the Budget eased. The latest GfK consumer confidence index was -18 in November, a three-point jump on October, when it eased one point to -21. It was also a notable improvement on the -24 recorded in November 2023.

British manufacturers expect conditions to improve in the coming months, a long-running survey showed on Thursday, despite seeing a slide in output in November. According to the latest Industrial Trends Survey from the Confederation of British Industry, output volumes fell in the three months to November, with a weighted balance of -12. That down on October’s -6. Of the 17 sub-sectors, 14 saw output decline.

The financial watchdog is considering giving firms up until the end of 2025 to handle car finance complaints, it confirmed on Thursday. The Financial Conduct Authority, which is investigating potential mis-selling in motor finance, said last week that it may introduce fresh deadlines in light of a key legal judgement. The Court of Appeal ruled on 25 October that it was illegal for banks to pay commission to a car dealer without the customer’s informed consent.

The UK government borrowed more than expected in October as spending and debt repayments outstripped tax receipts, official data showed on Thursday. Government borrowing surged to £17.4bn, up £1.6bn year on year, in the first figures published since Finance Minister Rachel Reeves’s Budget last month. Economists had been expecting around £12.3bn. It is also the second highest October borrowing since monthly records started in 1993.

UK house prices continued to grow in September, official data showed on Wednesday, despite weakness in the London market. The latest provisional UK house price index, calculated by the Office for National Statistics, showed prices rose 2.9% year-on-year in September, to £292,000. In August, annual house prices rose by an upwardly revised 2.7%.

UK inflation jumped past the Bank of England’s target in October after energy bills rose, according to data released on Wednesday by the Office for National Statistics. The consumer price index rose at an annual rate of 2.3% in October, up from 1.7% in September and above the 2.2% expected by economists. This was also above the Bank of England’s 2% target, and was put down to higher electricity and gas prices.

International events

US financial regulator chief Gary Gensler on Friday said he would stand down when president-elect Donald Trump is inaugurated in January. Gensler confirmed on social media he would resign from the US Securities and Exchange Commission (SEC) on January 20. Trump said during the election campaign he would sack Gensler on “day one” of his presidency.

Business activity in the eurozone unexpectedly declined in November, according to a flash reading from the Hamburg Commercial Bank purchasing managers' index (PMI) released on Friday morning, which dropped to its lowest level in 10 months. The eurozone composite PMI compiled by HCOB and S&P Global declined to 48.1 this month, down from the neutral 50-point level seen in October.

Germany's economy escaped a technical recession in the third quarter of 2024, but growth still came in below forecasts, according to official figures out on Friday from Destatis. The Federal Statistical Office reported that the GDP expanded by a paltry 0.1% between July and September, rebounding after a 0.3% quarterly decline in the second quarter. The consensus forecast was for GDP growth of 0.2%.

Existing home sales increased by 3.5% in October, according to the National Association of Realtors, up from September's 14-month low. Existing home sales hit a seasonally adjusted annualised rate of 3.96m in October, slightly ahead of market expectations for a reading of 3.93m. Existing home sales prices were also higher, up 4% at $407,200 to put a stop to a three-month-long streak of declining home prices.

Americans lined up for unemployment benefits at a decelerated pace in the week ended 16 November, according to the Department of Labor. Initial jobless claims fell by 6,000 week-on-week to 213,000, the lowest reading since April and well and truly missing expectations for an increase to 220,000.

Construction output in the eurozone slipped slightly in September after stagnating the previous month, according to figures released on Wednesday by Eurostat. Output was down 0.1% over the month, after a flat reading in August and a 0.5% decline in July.

China left benchmark lending rates unchanged on Wednesday with no repeat of the surprisingly large cuts brought in last month to boost the faltering economy. The one-year loan prime rate was kept at 3.1%, and the five-year LPR was unchanged at 3.6%.

German producer prices fell 1.1% in October as energy costs declined, according to official data published on Wednesday. Energy prices were 5.6% lower year on year but rose 0.6% compared with September 2024. Across all customer groups, natural gas prices declined by 10.1% from October 2023 and were up 1.1% on September 2024, said the federal statistics office Destatis. Electricity cost 7.3% less than in October 2023 but was 0.5% more expensive than in September 2024.

US housing starts fell by 3.1% in October, according to the Census Bureau, missing expectations for a reading of 1.33m. Housing starts fell from a downwardly revised 1.35m in September to 1.31m last month as construction activity fell sharply across the American south as a result of hurricane activity throughout the period. Single family home starts plunged 6.9% to 970,000, while starts for houses with five units or more were up by 9.8% to 326,000.

Inflation in the eurozone rebounded sharply as expected in October, rising from a three-year low and back in line with the European Central Bank's target. Data from Eurostat on Tuesday showed that the annual change in consumer prices was 2.0% last month, with the rate of inflation jumping from 1.7% in September – its lowest level since April 2021. This was in line with the consensus forecast.