Tesco hikes retail profit target, Renewi set to end year as expected

Stocks to watch

Tesco has hiked its retail profit and cash flow targets after a strong first half, with sales rising by 9% on the back of easing inflation. The supermarket giant said, as a result of significant cost reductions from the Save to Invest cost-cutting programme, it now expects to deliver a retail adjusted operating profit of £2.6bn-2.7bn for the 12 months to 25 February. Previous guidance was for no growth from last year's £2.6bn figure. Retail free cash flow is forecast to hit £1.8bn-2.0bn this year, ahead of the medium-term guidance range of £1.4bn-1.8bn.

Waste-to-product firm Renewi updated the market on its trading and goals on Wednesday. At its capital markets event, it was detailing plans for achieving above 5% annual organic revenue growth, a high single-digit EBIT margin, free cash flow of at least 40% of EBITDA, and a return on capital employed exceeding 15%. The company anticipated its full-year performance to meet board expectations, balancing ongoing demand with cost actions.

Newspaper round-up

Rail passengers in England face another day without trains on Wednesday as a strike by train drivers halts most services. Members of the Aslef union are on strike for the second time in four days, in a 24-hour walkout timed to coincide with the final day of the Conservative party conference in Manchester. – Guardian

Lobbyists from TikTok, Amazon and gambling and crypto companies paid more than £3,000 a head to sit with ministers as part of the Conservative party’s business day, where Rishi Sunak set out his pitch to stop big corporations being wooed by Labour. Senior ministers including Michael Gove, the levelling up secretary; John Whittingdale, a media minister; Robert Jenrick, the immigration minister; and James Cartlidge, a defence procurement minister, hosted tables of guests who had paid for access to the “policy” discussions. – Guardian

The Conservative Mayor of the West Midlands has launched a last-ditch effort to save HS2’s northern leg by securing private funding to finish the troubled project. Andy Street, the former John Lewis boss, is understood to have urged Rishi Sunak to strip the government-owned organisation HS2 Ltd of control over the multibillion-pound scheme and instead put a development corporation in charge. – Telegraph

The Canadian investor chaired by Mark Carney is buying a family-run British renewable energy company in a deal worth nearly $1 billion. Brookfield Asset Management said that its second Global Transition Fund was acquiring Banks Renewables, which is controlled by Harry Banks, 82, the Durham-based businessman. – The Times

Apple has bowed to demands by China to ban apps not licensed under a new censorship regime from its phones, the latest in a line of companies to accept Beijing’s rules to operate in the country. After talks last week between company leaders and Communist Party authorities, Apple posted an update to its website for App developers. – The Times

US close

Wall Street encountered renewed strain through the close on Tuesday, with stocks experiencing a notable dip while bond yields persistently edged higher.

Investors were also in a holding pattern ahead of Friday's non-farm payrolls report.

The Dow Jones Industrial Average closed down 1.29% at 33,002.38 points, while the S&P 500 slid 1.37% to 4,229.45 points, and the technology-centric Nasdaq Composite recorded a decline of 1.87% to 13,059.47 points.

In the currency arena, the dollar was down against sterling and the euro, dropping 0.04% and 0.05% to trade at 82.77p and 95.49 euro cents, respectively.

Conversely, it managed to claw a minor ascent of 0.09% against the yen, changing hands at JPY 149.16.