Bunzl revenue falls while profits improve, Ocado starts ops at Australia centres

Stocks to watch

Bunzl reported a 3.3% decline in revenue to £5.71bn for the first half on Tuesday, while adjusted operating profit increased by 3.9% to £455.5m, driven by improved margins and acquisitions. The FTSE 100 company also announced a 10.4% increase in its interim dividend, continuing a 31-year streak of dividend growth, and initiated a £250m share buyback programme. Despite currency challenges, particularly from the disposal of its Argentine business, Bunzl upgraded its 2024 profit outlook amid strong operational performance and acquisition activity.

Online grocer and food logistics group Ocado has announced that operations have finally started at two customer fulfilment centres in Australia a year later than planned, as part of its partnership with retail chain Coles. The two robot-operated facilities in Sydney and Melbourne, first announced in 2019, were originally scheduled to go live last year, but the companies faced numerous delays during construction. “As these CFCs ramp up, we are excited to help Coles bring a step-change in customer experience online to households across Sydney and Melbourne,” said Ocado chief executive Tim Steiner.

Newspaper round-up

Ministers have been urged to intervene to prevent businesses struggling with gas and electricity costs from going bust, as bills are forecast to be 70% higher next year than before the energy crisis. A typical small business such as a pub, restaurant or independent retailer is paying more than £5,000 extra a year on bills than before the energy crisis that began in 2021, research by the forecaster Cornwall Insight shared with the Guardian shows. – Guardian

Barclays has bulked up its half-year bonus pool for the first time in three years, raising bankers’ hopes of bigger annual payouts after the lender formally scrapped the EU bonus cap this month. The bank put £675m towards its bonus pool in the first six months of 2024, according to Barclays filings. That is up from the £665m put aside for its staff bonus pot, which is made up of cash and shares, over the same period in 2023. That bonus pool will continue to be built up until the end of the year, with staff able to be paid up to 10 times their salary now that the EU cap has been set aside. – Guardian

Mike Lynch’s family faces a £3bn fraud battle against the US tech giant Hewlett Packard Enterprise, with the company’s long-running claim against the tech tycoon set to pass to his estate. Legal experts said Hewlett Packard Enterprise’s long-running case against Mr Lynch and his former chief financial officer Sushovan Hussain was likely to be transferred to the administrators of his fortune. – Telegraph

IBM is closing two of its divisions in China, the latest retreat of an American tech company from the world’s second largest economy, amid mounting tensions between the two superpowers. The company is understood to be closing two business lines that specialise in research and development and testing, which will affect more than 1,000 employees. – The Times

The water sector faces a “material risk” that it will fail to raise the £7 billion of equity needed to overhaul the country’s infrastructure and clean up waterways under Ofwat’s investment plans, the industry has claimed. Water UK, the trade body that represents the sector, will warn Ofwat, the regulator for England and Wales, this week that the watchdog’s provisional decision to cut back companies’ five-year spending proposals and limit bill increases is likely to “result in significant investability issues for the sector as a whole”. – The Times

US close

US stocks finished in mixed fashion on Monday, but that didn't stop the Dow Jones Industrial Average setting a new all-time closing high as sentiment continues to be lifted by expectations of an imminent cut to interest rates.

The Dow finished the day just 0.2% higher at a fresh peak of 41,240.52, extending gains recorded in the previous session after comments from Federal Reserve chairman Jerome Powell at the central bank's Jackson Hole economic symposium indicated he thought now might finally be the time to look at cutting benchmark interest rates.

While Powell did not say when the Fed would look to cut rates, or by how much, traders seem to be convinced that the central bank will make a move at its September policy meeting.

Nevertheless, the S&P 500 fell 0.3% to 5,616.84, but remains just inches away from its record high, while the Nasdaq dropped 0.9% to 17,725.76 as chip stocks and the wider tech sector weighed heavily on the index.

In macro news on Monday, US durable goods orders surged by 9.9% in July, according to the Census Bureau, well ahead of expectations of a 5.5% rise and erasing June's 6.9% decline.