Weekly review

Equity view

Infrastructure group Balfour Beatty said it expected annual profits to be flat, with current trading in line with expectations. In a trading update ahead of its yearly shareholders meeting, the company said its order book was £17bn compared with £17.4bn at the end of December.

Beazley posted strong growth for the first quarter and reiterated its full-year guidance. "The first quarter saw us deliver good headline growth in line with our expectations, underpinned by growth in property, where we are taking advantage of the excellent and continuing market conditions," the specialist insurer's chief executive officer, Adrian Cox, said.

Online retailer THG called off take-over talks with US private equity outfit Apollo Global Management. Like previous offers for THG, Apollo's bid was said to have been rejected due to an "inadequate valuation" and the nature of the offer structure.

A proposed class action against GSK has been dismissed by a court in Canada, the UK drugs giant confirmed on Friday. The action had been brought on behalf of Canadian users of ranitidine, a heartburn treatment marketed under the Zantac brand.

Continental Europe-focussed logistics property investor Tritax EuroBox announced the securing of a 10-year green lease with a leading logistics firm for its recently-completed 36,000 square metre property in Dormagen on Friday. The London-listed company described the property as a prime logistics hub in the Düsseldorf region of Germany.

Mining developer Ironveld updated the market on recent activities at its Rustenburg and Limpopo smelting operations on Friday, as well as its partnership with BurnStar Technologies. The AIM-traded company said the refurbishment of the Rustenburg smelter complex was nearing completion, with the first shipments of high purity iron, titanium slag, and vanadium slag expected to meet the company's second quarter sales target.

Building materials retailer CMO Group reported a 9% increase in revenue in its preliminary results on Friday, to £83.1m, despite a challenging year for retail. The AIM-traded company said second-half revenue was ahead 9.3% at £42.3m, outperforming the builders merchant market by 48%.

Oil and gas engineer Wood Group, currently in talks on a potential $1.6bn takeover by private equity group Apollo, held annual guidance as first quarter revenues increased. The company on Thursday said revenue rose to around $1.45bn, reflecting good momentum across all business units. Group adjusted core earnings was in line with expectations.

UK aerospace engineer Rolls-Royce held annual guidance and said large engine flying hours had hit 83% of 2019 levels in the four months to April 30. In a trading statement ahead of its annual shareholders meeting, Rolls said it was on track for the 80% to 90% flying hours range for the full year, as guided in February.

JD Sports Fashion said on Thursday that it has appointed Dominic Platt as chief financial officer and as a member of the board. Platt, who is expected to join later this year, is currently CFO of BGL Group, a digital distributor of financial services and owner of Compare the Market. He previously held senior finance roles at Darty, where he was group finance director and managing director of international businesses, and at Cable and Wireless both in the UK and internationally.

Asset manager Man Group said chief executive Luke Ellis would retire in September, to be succeeded by Robyn Grew. Ellis, who first joined Man Group in 2010, said it was "the right time to pass the reins".

Spire Healthcare said on Thursday that it was pleased with its performance in the first four months of the year. In a very brief update ahead of its annual general meeting, the healthcare group said that consistent with expectations stated in the FY22 results, "good momentum has continued from the end of last year".

Estate agent Purplebricks tumbled again on Thursday after rival Strike said it was not planning to make an offer for the company but remains in talks about a potential purchase of the business and assets. After the close of markets on Wednesday, Purplebricks said it had granted Strike a short period of exclusivity in order to negotiate a possible sale of the business and assets. The arrangement does not include provision for a break fee or inducement fee and does not restrict Purplebricks from pursuing an offer for the company.

Airtel Africa reported revenue growth of 11.5% in its full-year results on Thursday, to $5.26bn in reported currency. However, when considering constant currency, Airtel’s revenue growth stood at 17.6%.

Outsourcer Capita warned on Wednesday that it will take a hit of up to £20m from a recent cyber attack. The company - which was hit by the attack in March - said it has continued to work "closely and at speed" with specialist advisers and forensic experts to investigate and resolve the incident.

Caterer Compass Group lifted its full-year guidance on Wednesday as it posted a jump in first-half revenue and operating profit. In the six months to the end of March, underlying operating profit rose 41.1% to £1.05bn and revenue was up 24.7% to £15.8bn. The operating margin improved by 80 basis points to 6.6% and earnings per share rose to 42.7p from 29.9p.

Industrial technology firm Smiths Group said on Wednesday that it will appoint current Alcoa chair Steve Williams as chair of the board, succeeding George Buckley. Buckley is due to retire at the conclusion of the company’s annual general meeting on 16 November.

Harbour Energy held full-year guidance after a reporting a strong first quarter. In a statement ahead of the company’s annual general meeting, the North Sea oil and gas producer said it averaged 202,000 barrels of oil equivalent per day (kboepd), down 13,000 barrels a day compared to the first quarter of 2022, with new wells offsetting natural decline.

Pub chain JD Wetherspoon said it expected annual earnings to be at the top end of expectations and tipped 2023 to be a record year for sales. The company said like-for-like sales increased by 9.1% in the 13 weeks to April 30, compared to the same period in 2019 before the Covid pandemic.

Melrose Industries said on Wednesday that it was trading "materially ahead" of expectations, with significant growth in revenue, profit and margin, as it issued new guidance for the full year. In the first four months of this year, revenue was up 19% on the same period a year earlier, with Engines showing the fastest momentum, up 28%, and Structures up 14%.

The publication of Alphawave IP Group’s audited results has been delayed further, the UK chipmaker said on Wednesday. The firm asked for its shares to be suspended last month, after its external auditor said it needed more time to complete its internal oversight and assurance processes before issuing the formal audit opinion.

AstraZeneca's Farxiga drug has been approved in the US to reduce the risk of cardiovascular death, hospitalisation for heart failure and urgent heart failure visits in adults, the company said on Tuesday. The approval by the Food and Drug Administration was based on positive results from the DELIVER Phase III trial.1 Farxiga was previously approved in the US for adults with heart failure with reduced ejection fraction.

Urban Logistics REIT said it had agreed 15 new lettings in the first quarter, generating £1.6m of additional rental income. It added that a further four deals were signed post quarter generating £0.8m in new rent.

Diversified Energy said it was trading in line with expectations after recording average first quarter production of 139 million barrels of oil per day. Net income was $400m of a $365m gain on tax-effected, non-cash unsettled derivative fair value adjustments.

Sales, marketing and support services group DCC said on Tuesday that chief executive Donal Murphy will step back from his day-to-day responsibilities for the next few weeks to address a medical condition. Murphy will remain involved in the business, and his day-to-day responsibilities will be assumed by chief financial officer Kevin Lucey. The company said Murphy expects to make a full return to work before the annual general meeting in July.

Fresnillo updated the market on Mexico's reformed federal mining law on Tuesday, claiming that its potential impact on current operations and exploration projects would be minimal. The FTSE 100 company said it had analysed the reform, concluding that none of its current mining operations were expected to be affected by the new law, as it had all necessary concessions currently in place to allow it to operate on an ongoing basis.

Economic news

Retail sales dipped last week, industry research showed on Friday, after demand was curtailed by the bank holiday and mixed weather. According to the last BDO High Street Sales Tracker, total like-for-like sales fell 3.21% year-on-year in the week ending 7 May. Within that, in-store sales eased 1.7% while non-store sales were down 3.58%.

The UK economy shrunk in March, official data showed on Friday, but managed to nudge higher over the quarter as a whole. According to the Office for National Statistics, GDP fell 0.3% in March. That was worse than expected, with most analysts looking for no growth.

The Bank of England upped interest rates on Thursday to 4.5%, the highest level since 2008, as it looked to tackle stubbornly high inflation. The widely-expected 25 basis point increase is the twelfth consecutive rate rise by the Monetary Policy Committee since December 2021.

House prices fell less sharply last month, an industry survey showed on Thursday, although higher borrowing costs and an uncertain economic outlook continued to hamper demand. According to the latest residential market survey from the Royal Institution of Chartered Surveyors, house prices remained in negative territory in April, with the net balance of surveyors reporting an increase in house prices over the last three months at -39.

Retail sales pushed higher in April, industry research showed on Tuesday, although shoppers took home fewer items as inflation continued to bite. According to the latest BRC-KPMG Retail Sales Monitor, total sales rose 5.1% last month, unchanged on March. A year previously, sales had eased 0.3% in April.

UK house prices fell in April after three consecutive months of growth, according to data released by Halifax on Tuesday. On a month-on-month basis, prices were down 0.3% to £286,896 following a 0.8% increase in March.

International events

The number of Americans filing for unemployment benefits rose more than expected last week, according to data released on Thursday by the Labor Department. US initial jobless claims increased by 22,000 from the previous week’s unrevised level to 264,000. This was above expectations for a jump to 245,000 and marked the highest level since 30 October 2021, when it was 264,000.

US producer prices rose at their slowest pace in April since January 2021, according to data released on Thursday by the Bureau of Labor Statistics. The producer price index for final demand rose 2.3% on the year. Month-on-month, the index was up 0.2%, after falling 0.4% between February and March.

Consumer inflation in China dropped to its lowest rate in more than two years in April, while producer price deflation deepened further, according to data released on Thursday. The consumer price index (CPI) rose by 0.1% in April year on year and down from 0.7% in March, the National Bureau of Statistics (NBS) said - the lowest rate since February 2021.

The cost of living in the US rose as expected in April, hitting a two-year low in the process. According to the US Department of Labor, in seasonally adjusted terms, the country's Consumer Price Index rose at a month-on-month pace of 0.4% (consensus: 0.4%).

The European Central Banks' tightening campaign was entering its final phase, the head of the Bundesbank said. In remarks to Deutschlandfunk radio, Joachim Nagel said that: "We're coming to the home stretch in the sense that we are reaching the area in monetary policy that's considered restrictive," Bloomberg reported.

German inflation edged lower in April, official data confirmed on Wednesday, although high food prices kept it from falling further. According to Destatis, the Federal Statistical Office, the consumer price index was 7.2% on the same month a year earlier in April, compared to a 7.4% rise in March. The result confirmed Destatis’s initial flash estimate, in line with consensus.

A closely followed gauge of small business sentiment plumbed a 10-year low last month as confidence in the economic outlook, as well for sales and earnings waned. The National Federation of Independent Business's confidence index slipped from a reading of 90.1 in March to 89.0 for April (consensus: 89.7).

China reported better-than-expected exports in April, although growth slowed, while imports fell again, according to data released on Tuesday. Exports rose by 8.5% year on year $295.42b, compared with an increase of 14.8% in March and above expectations for a rise of 6.4%.

Reporting by staff and contributors for Sharecast.com.