Weekly review

The FTSE 100 ended the week 78.62 points higher, closing at 7,483.35 on Friday.

Equity view

Water supplier United Utilities said on Friday that recent trading had been in line with internal expectations for the year ending 31 March. United Utilities stated its full-year guidance remained unchanged, with net revenue expected to be approximately 3% higher year-on-year, largely reflecting higher consumption from business customers, while underlying operating profits were anticipated to be broadly flat as the increased revenues were offset by higher underlying operating costs, largely as a result of inflationary increases in its core costs.

Mining giant Anglo American has sold its remaining 8.0% shareholding in Thungela Resources to a number of major financial institutions. Anglo American said on Friday that it had offloaded the stake via an accelerated book build placing, realising gross proceeds of ZAR 1.67bn (£87.05m) after the Thungela shares were placed at a price of ZAR 154 (£8.03) per share, representing a 12% discount to its closing share price on 24 March.

Home improvement retailer Wickes reported a jump in full-year profit and revenue on Friday as it hailed a strong performance from digital channels. In the 53 weeks to 1 January 2022, adjusted pre-tax profit rose to £85m from £49.5m the year before, while reported pre-tax profit came in at £65.4m versus £28.9m. Revenue grew 14% to £1.53bn, driven by further market share gains in the core business, supported by an enhanced service proposition and a strong digital performance.

Airtel Africa tumbled on Friday after Singapore Telecom sold 60m shares in the company in a placing. The shares - which represent a stake of around 1.6% - were placed at 140p each, raising gross proceeds of £84m.

Media company Future revealed on Thursday that it had acquired digital-only entertainment publisher WhatCulture.com data insight platform operator Waive for an undisclosed sum. Future said the acquisition of WhatCulture strengthened its position in the video market, while the addition of Waive would extend its "Aperture" data platform and enhanced data science capabilities.

Gambling equipment maker Playtech reported a rise in annual profits as it continued to talk to a group of Asia-based investors about a takeover after the collapse of Aristocrat Leisure’s bid earlier this year. The company posted adjusted core earnings of €317m, up 25% on a 12% rise in revenue to €1.2bn driven by a strong performance in business-to-business operations which more than offset any Covid-19 impacts.

Royalties collection outfit International PPL said on Thursday that full-year profits more than doubled in 2021 amid a further "strong operational performance" from its portfolio. For the twelve months ended 31 December, International PPL's net asset value per share increased to 148.2p from 147.1p a year earlier, helping the firm report an annual profit of £129.2m, up from £60.8m in 2020.

Energean said it would pay its first dividend in 2022 as the gas explorer swung to an operating profit boosted by higher production and prices. Operating profit for the year to the end of December was $32.1m compared with a loss of $124.6m a year earlier as revenue jumped to $497m from $28m. The pretax loss narrowed to $90.7m from $113.6m.

Safety equipment company Halma said on Wednesday that it had made "good progress" so far in the second half of its trading year, with the group continuing to benefit from its "diverse portfolio" and "resilient", long-term growth drivers. Halma stated its strategic qualities, as well the essential nature of many of its products and services, had underpinned "increasing demand" across the group and said it now expects to deliver a "sequential improvement" in revenue during the second half and "substantial revenue growth" in the year as a whole, while full-year adjusted pre-tax profits were seen in line with market consensus estimates.

UK defence company Ultra Electronics reported a rise in annual profits as it awaits a UK government decision on whether US buyout specialist Advent can take over the firm. The company on Wednesday posted a 1.8% increase in underlying pre-tax profit to£116.6m as its order book rose 22.2% to £1.3bn. On a statutory basis, pre-tax profit for the year fell to £82.7m from £103.7m.

UK funeral services firm Dignity swung to a full-year profit on Wednesday and warned of lower profits in the short term as it pursues a restructure. The company reported a pre-tax profit of £32m compared with a loss of £19.6m a year earlier. Revenue fell to £353.7m from £357.5m in 2020.

Wealth management firm Quilter revealed on Wednesday that chairman Glyn Jones will not seek re-election at the company's annual general meeting on 12 May. Quilter stated Jones, who will leave the group in order to pursue other interests following the AGM, will be replaced by senior independent director Ruth Markland on an interim basis.

Computer support and services provider Softcat said on Tuesday that its full-year outturn was now expected to be ahead of previous estimates after interim profits grew ahead of expectations in the six months ended 31 January. Softcat stated first-half gross profits were up 11.7% at £150.2m, while operating profits were 12.4% higher at £64.1m. Earnings per share were up 12.4% at 26.2p each.

Closed-ended investment company Apax Global Alpha has made a €5.4m investment in ClearBank, one of the largest next-generation clearing and embedded banking platforms in the UK. The FTSE 250-listed firm said it will leverage the experience of its Apax Digital Funds in both fintech and software to partner with ClearBank and help drive the business forward.

Government outsourcer Capita said chairman Ian Powell had decided to step down and would be replaced by senior independent director David Lowden. Powell told the board he would not seek re-election at the company’s annual general meeting on May 10 after five years in the role.

Automotive classified advertising business Auto Trader has agreed to acquire vehicle leasing marketplace operator Autorama in a deal worth up to as much as £200.0m. Auto Trader said on Tuesday that the acquisition of Autorama will transform its existing leasing proposition and help meet the demands of a growing number of consumers considering leasing their next new vehicle.

Fintech group Plus500 has entered into the "substantial Japanese retail trading market" with its acquisition of type 1 financial instruments business operator EZ Invest Securities. Plus500 said on Monday that the acquisition represented "a major growth opportunity" for the firm, stating it will further strengthen its strategic position as a global multi-asset fintech group by diversifying its geographic footprint through an immediate presence in the Asian nation.

Consumer products giant PZ Cussons said it had bought UK baby and child personal care company Childs Farm for £36.8m in cash. The company on Monday said Childs Farm founder Joanna Jensen reinvested £3.3m to take an 8.1% stake in the purchased business and Cussons would buy this back by May 2025 for up to £32.5m.

Mining giant Antofagasta, along with Barrick Gold and the Governments of Pakistan and Balochistan, have reached an agreement in principle on a framework that provides for the reconstitution of the Reko Diq project and a pathway for the company to exit the project. Antofagasta said on Monday that it had decided not to participate in the reconstituted project, which was suspended in 2011 due to a dispute over the legality of its licensing process, as its growth strategy was now focused on the production of copper and by-products in the Americas - particularly in Chile, Peru, the USA and Canada.

Car dealership Pendragon has reportedly rejected a secret £400m takeover approach from its largest shareholder. According to Sky News, the Hedin Group - which operates 210 car dealerships in Belgium, Norway, Sweden and Switzerland - made a secret 28p-a-share approach for Pendragon several weeks ago.

Economic news

UK February car production fell 41% year on year as computer chip shortages and the closure of a Honda plant in July disrupted output, according to industry data released Friday. The Society of Motor Manufacturers and Traders (SMMT) said 61,657 cars were made during the month, the lowest number for the time of year since February 2009 and down from 105,008 a year ago.

UK retail sales unexpectedly fell in February, with online shopping dropping back below pre-pandemic levels and storms keeping shoppers away, according to figures released on Friday by the Office for National Statistics. Retail sales declined by 0.3% following a 1.9% jump in January, missing expectations for a 0.6% increase. This left sales 3.7% above pre-pandemic levels in February 2020.

UK consumer sentiment plunged again in March as fears about the soaring cost of living intensified, a survey showed. The overall score in GfK's consumer confidence index dropped to -31 from -26 a month earlier as all five component measures fell. The overall figure was the lowest since November 2020 when Covid-19 levels were rising rapidly with no vaccine.

UK Finance Minister Rishi Sunak’s mini-budget was under fire on Thursday for failing to tackle the cost of living crisis hitting the lowest paid and vulnerable. A defensive Sunak suggested there could be more help for surging energy bills later this year, but insisted his poorly-received Spring statement would still help Britons struggling to make ends meet in the face of rampant inflation.

The UK has imposed fresh sanctions on a number of Russian businesses and individuals, including a private paramilitary organisation and the stepdaughter of Sergey Lavrov, Russia’s foreign minister. More than 1,000 individuals and businesses have now been sanctioned by the British government since Russia invaded Ukraine at the end of February.

UK retail sales growth slowed in March as living costs rose, according to a survey released on Thursday by the Confederation of British Industry. The CBI’s monthly retail sales balance fell to +9 from +14 in February, coming in below expectations for a reading of +10.

The Bank of England is considering delaying plans to tighten banks' capital requirements because of concerns created by Russia's invasion of Ukraine. In an update on financial stability the central bank said UK lenders were financially strong and could withstand a period of severe stress. But it said economic uncertainty meant it might not be wise to increase cyclical capital requirements as planned in the second quarter.

Ofgem launched an investigation into National Grid on Thursday, probing whether the company’s transmission operation breached its obligations over the condition of the Harker substation in Cumbria, and delayed connecting power generation to the site. The energy sector regulator said it was investigating whether National Grid Electricity Transmission (NGET) breached its duty under the Electricity Act 1989 to develop and maintain its network, and to facilitate competition in power supply and generation.

Business optimism has slumped, a closely-watched survey showed on Thursday, after cost inflation soared to fresh highs. The flash reading for March’s S&P Global CIPS UK PMI Composite Index was 59.7 in March, against 59.9 in February. Consensus had been for 57.5.

UK Finance Minister Rishi Sunak placed a long-term bet on the 2024 General Election by pledging a cut in income taxes, while trying to ease the immediate financial pain of Britons with a reduction in fuel duty and threshold rise for National Insurance contributions. Delivering his Spring statement on the day when inflation soared to 6.2% on top of surging energy costs and the impact of the Ukraine war, the millionaire Sunak said the basic rate of income tax would be cut to 19p from 20p in 2024, the year an election is due.

International events

The US and EU on Friday struck a deal to increase exports of liquefied natural gas (LNG) to the block and cut its dependence on Russian energy. US President Joe Biden and his European Commission counterpart Ursula von der Leyen said the deal would see LNG shipments to Europe rise by 15 billion cubic metres this year.

German business sentiment nosedived in March as the conflict in Ukraine weighed, according to a survey released on Friday by the Ifo Institute. The business climate index fell to 90.8 from 98.5 in February, missing expectations of 94.2.

Far from slowing, the US economy was firing on all cylinders in March, according to the results of two surveys. IHS Markit's services sector Purchasing Managers' Index hit an eight-month high of 58.9, up from 56.5 one month before.

Orders for goods made to last more than three years dropped unexpectedly last month, albeit chiefly due to a large decline in the oft-volatile orders for civilian aircraft. According to the US Department of Commerce, in seasonally adjusted terms, durable goods orders shrank at a month-on-month pace of 2.2% in February to reach $189.94bn.

Federal Reserve Bank of Chicago President Charles Evans said on Thursday that he sees six more 25 basis point rate hikes this year. In remarks prepared for delivery to the Detroit Regional Chamber, Evans said the US central bank needs to lift rates this year and next to counter high inflation.

Eurozone growth slowed in March, a closely-watched survey showed on Thursday, as the war in Ukraine weighed heavily. The S&P Global Eurozone PMI Composite Output Index for March was 54.5, a two-month low and down on February’s 55.5, although it remains the second-strongest expansion since November. It was also above consensus expectations of around 53.9.

Sales of new US single-family homes unexpectedly fell in February, according to figures released on Wednesday by the Commerce Department. New home sales declined by 2% from January to a seasonally-adjusted annual rate of 772,000. Analysts had been expecting a level of 810,000.

The Ifo Institute cut its German growth forecast on Wednesday and lifted its inflation forecast, citing the impact of the Russia-Ukraine conflict. Ifo now expects economic growth of between 2.2% and 3.1% this year, down from a previous forecast of 3.7%. For next year, it expects GDP growth of 3.3% in its base case scenario and 3.9% in its alternative scenario. This is up from a forecast of 2.9% growth in December.

Russia and Ukraine were nearing agreement on "critical" matters and a ceasefire is possible if neither side backtracks, Turkey's foreign minister said. In an interview with Turkish daily Hurriyet at the weekend, Mevlut Cavusoglu said that there had been a "rapprochement in the positions of both sides on important subjects, critical subjects".

Foreign ministers from European Union member countries were set to discuss a ban on Russian oil imports when they met on 24 March. According to the World Economic Forum, in 2021 the bloc imported approximately 26.9% of its crude oil from the Russian Federation, making it Moscow's largest export market for oil.