Weekly review

Equity view

RSA Insurance posted a rise in full-year operating profit on Friday ahead of its takeover. In its preliminary results for 2020, the insurer said operating profit rose 15% to £751m. Underlying pre-tax profit was also 15% higher, at £718m, while statutory pre-tax profit fell 2% to £483m, driven by "market impacts from Covid-19, bid costs, exits and restructuring".

Engineering firm IMI reported a 3% fall in adjusted revenue in its preliminary results on Friday, to £1.83bn, as it described its organic revenue for 2020 as “resilient”, being 4% lower year-on-year. The FTSE 250 company said its adjusted operating profit for the year ended 31 December was 7% higher than in 2019 at £285m, as its operating margin improved 140 basis points to 15.6%.

Investment manager Jupiter Fund Management said on Friday that assets under management had hit an all-time high of £58.7bn in 2020, offsetting an increased level of outflows throughout the year. Assets under management rose 37% year-on-year, boosted by its seemingly defensive acquisition of Merian Global Investors in July, while outflows widened 11% to £4.0bn but came in lower than the £4.2bn expected by analysts.

Pets At Home has lifted annual profit guidance again after a surge in demand from Britons stuck at home during the latest national Covid lockdown. The company, which was able to keep its shops open, on Friday forecast full-year underlying pretax profit of about £85m, ahead of its earlier outlook of at least £77m as demand spiked in the last eight weeks.

Centrica reported a slide in full-year operating profits on Thursday, weighed down by Covid-19, as it paused the final dividend. Adjusted operating profits for the 12 months to 31 December, which exclude Direct Energy, came in at £447m, a 31% fall. The owner of British Gas attributed the decline to negative impacts of Covid-19, warmer weather and low commodity prices. Earnings per share slid 11% to 6.5p.

A boom in commodity prices and easing of Covid curbs in the second half helped Anglo American report better-than-expected annual profits and lift its dividend. The De Beers diamond company owner said underlying earnings before interest, tax, depreciation and amortisation (EBITDA), the measure used by investors and analysts, fell 2% to $9.8bn in 12 months to December 31, against a consensus of $9.4bn.

Bank of Georgia reported a 1.8% fall in operating income in its final results on Thursday, to GEL 1.09bn (£0.23bn). The FTSE 250 company said its profit before tax was 44.7% lower for the year ended 31 December, at GEL 316.5m, as its adjusted profit slid 42.6% to GEL 294.94m.

Primark owner Associated British Foods warned on Thursday that Downing Street's nationwide lockdown measures would leave it without roughly £1.1bn-worth of sales in the first half of its financial year. AB Foods expects Primark sales in the six months ending 27 February to be in the vicinity of £2.2bn and adjusted operating profits to be marginally above break-even due to the restrictions placed on the fast-fashion retailer in both the United Kingdom and across Europe.

Reckitt Benckiser reported a surge in full-year revenues on Wednesday, after demand for cleaning and hygiene products spiked during the Covid-19 pandemic. Group revenues in the 12 months to 31 December came in at £13.99bn, ahead 8.9% or by 11.8% on a like-for-like basis. Within that, the hygiene division - which includes brands such as Dettol, Finish and Lysol - saw the biggest growth, with underlying sales up 19.5% at £5.82bn.

Vodafone confirmed on Wednesday that it plans to float its European tower infrastructure company, Vantage Towers, on the Frankfurt Stock Exchange before the end of March. Vodafone said the planned IPO will target a meaningful minority free float to create a liquid market for Vantage Towers shares.

Synthomer said on Wednesday that it is not in talks about a possible offer for the company. The firm's one line press release came after Bloomberg reported that private equity group CVC Capital Partners has been exploring a bid for the chemical producer.

Renewable infrastructure fund Greencoat UK Wind on Wednesday announced two acquisitions for £99.5m. The company said it had bought the remaining 50% interest in Braes of Doune wind farm from funds managed by the infrastructure team of Federated Hermes for £48.1m and agreed with Banks Renewables to acquire a 49.9% interest in Kype Muir Extension wind farm for a headline price of £51.4m once operational in the final quarter of 2022.

Allied Universal said its offer for rival G4S had become final after Canada’s GardaWorld on Monday declared it would not raise its own bid for the UK security firm. The US firm said its recommended cash offer of 245p a share valued G4S at approximately £3.8bn.

InterContinental Hotels has tumbled into the red and scrapped its final dividend after what it called the most challenging year in its history. Total revenues in the year to 31 December came in at $2.39bn, down 48% on 2019, while the operating loss was $153m against a profit of $630m a year previously.

Aviva has agreed to sell its French business to Aema Groupe for €3.2bn in cash as it looks to focus on its strongest businesses in the UK, Ireland and Canada. The company said the deal strengthens its capital and liquidity with an increase in excess capital of about £2.1bn and realises "significant" value for shareholders. It also provides security to employees and continuity of service to customers under new ownership.

Cruise operator Carnival has launched an underwritten public offering of $1.0bn-worth of shares of common stock in order to fund general corporate purposes. Carnival said it would place 40.5m shares at a price of $25.10 per share, a slight discount to its Monday closing price of $25.97, with the offering expected to close on Wednesday.

Saga, which specialises in products for the over-50s, is reportedly in talks about a £170m debt package as it looks to weather the coronavirus pandemic. According to Sky News, the company - which last year rejected a takeover offer- has begun talks with a group of debt funds about refinancing part of its existing borrowings. Sky cited City sources as saying that Saga was considering trying to secure the new debt against its insurance arm, which is the stronger of its two businesses.

Anglo American updated the market on its strategy for its platinum operations on Monday, aiming for a mining EBITDA margin of between 35% and 45% by 2030. The FTSE 100 mining giant said it wanted all operations at Anglo American Platinum to be “fully modernised and mechanised” by 2030, with all of its own mine operations to be in the first half of the primary cost curve by 2025.

Drugmaker AstraZeneca announced the voluntary withdrawal of its Imfinzi indication in the US for previously treated adult patients with locally advanced or metastatic bladder cancer on Monday. AstraZeneca, which stated its decision was made in consultation with the Food and Drug Administration, stated that Imfinzi was granted accelerated approval in the US based on promising tumour response rates and duration of response data from Study 1108, a Phase I/II trial that evaluated the safety and efficacy of the drug in advanced solid tumours.

Drugmaker Dechra Pharmaceuticals said on Monday that reported group revenues and operating profits had both increased throughout the six months ended 31 December. Reported interim group revenues were up 21.8% at a constant exchange rate, while reported operating profits increased by 74.2% as a result of the company's strong trading performance.

Economic news

Provisional Treasury figures estimated that more women were furloughed due to the pandemic crisis than men out of the total 4.7m on the scheme. The figures, which were recorded at the end of January, showed a leap in demand for the Job Retention Scheme as England entered its third Covid-19 lockdown.

The government must do more to support workers who have fallen through the gaps during the Covid-19 pandemic, a Parliamentary committee has warned. In a report published on Friday, the cross-party Business, Energy and Industrial Strategy Committee called on the chancellor to use next week’s budget to address inconsistencies in the financial support packages provided during the pandemic.

Chancellor Rishi Sunak will extend stamp duty holidays for a further three months until the end of June as part of an effort to keep Britain's property market going until the end of the current nationwide lockdown. Downing Street exempted the majority of homebuyers from the levy last July if purchases were completed prior to 31 March, enabling Britons to save as much as £15,000 in tax.

Footfall across all UK retail destinations is set to surge once non-essential stores and outdoor hospitality reopens in April, according to retail analysts Springboard. Footfall will rise by up to 47.9% week-on-week from 12 April, Springboard said, with high streets likely to see the biggest rise, of 59%. Springboard pointed to the fact that both non-essential stores and outdoor hospitality are reopening on the same date this time, unlike after the first lockdown, when hospitality reopened two weeks after retail.

ExxonMobil announced on Wednesday it would sell its non-operating interest in its UK and North Sea exploration and production assets to private-equity fund HitecVision in a deal worth over $1bn. The US oil major has been looking to sell its oil and gas assets since late 2019, in a move to free up cash to focus on a handful of mega-projects.

The UK unemployment rate hit its highest level in five years in December, according to figures released on Tuesday by the Office for National Statistics. The unemployment rate rose to 5.1% in the three months to the end of December from 5.0% in November, in line with economists’ expectations and marking the highest level since early 2016. Meanwhile, 726,000 jobs have been lost since before the pandemic in February 2020.

Retail volumes fell in February, a closely-watched industry survey showed on Tuesday, although online sales surged to fresh highs. The latest CBI Distributive Trades Survey found that retail sales declined sharply in February, with a reported sales balance of -45%. That is an improvement on January’s eight-month low of -50%, but below analyst expectations for around -40%.

The number of UK homes bought and sold jumped in January, government data showed on Tuesday, although there were also signs the market may be starting to cool. According to figures published by HM Revenue and Customs, the provisional seasonally-adjusted estimate of UK residential transactions in January was 121,640. That was 24.1% higher than January 2020, despite it traditionally being a quiet month for the property market, and the highest January total of the last decade.

Footfall across the UK rose last week despite the lockdown and pent-up demand should underpin footfall at non-essential stores once they reopen, according to data released on Monday by retail analysts Springboard. Footfall across UK retail destinations increased by 6.8% last week from the week before, down just a little from the 8.5% rise reported in the same week last year and marking the fifth consecutive week that footfall was up despite the Covid-19 lockdown.

The chief executive of the UK competition watchdog, the Competition and Market Authority, told the Financial Times on Monday that the regulator is ready to launch a series of antitrust probes into the practices of Big Tech. Authorities are launching the probes as part of a tougher approach on the sector after Brexit, said Andrea Coscelli, chief executive at the regulator.

International events

President Joe Biden on Thursday ordered a US military air strike in eastern Syria against facilities that are backed by Iranian militia. The airstrikes killed at least 17, local news sources said on Friday. The local government has yet to make a statement on the incident.

Economic activity in the Chicago area deteriorated more than expected in February, according to data released on Friday. The MNI Chicago business barometer fell to 59.5 from January’s two-and-a-half year high of 63.8, missing expectations for a reading of 61.0. A reading above 50.0 indicates expansion, while a level below signals contraction.

US jobless claims in the week ended 20 February came in shy of economists' forecasts on Thursday, according to the Department of Labor. In seasonally adjusted terms, the number of Americans filing for unemployment claims fell for the first time in five weeks, coming in at 730,000 - an improvement on last week's revised print of 841,000 and better than expectations for a reading of 825,000.

Singapore’s plant-based food startup Next Gen just raised $10m in a seed funding round from investors. The company, which will launch a plant-based chicken brand called TiNDLE in Singapore next month, announced the funding on Thursday and said it had been the largest seed round ever raised by a plant-based food tech firm.

The German economy fared better than expected in the final months of 2020, official data showed on Wednesday, although growth was sharply lower on the previous quarter. According to Destatis, Germany’s Federal Statistical Office, fourth-quarter gross domestic product rose by 0.3% after adjustments for price, seasonal and calendar variations. That was above both analyst expectations and the initial estimate, for 0.1% growth.

President Joe Biden is set to sign an executive order on Wednesday to address a global semiconductor chip shortage that has automakers around the world, including those in the US, forced to cut production. The shortage, which was caused in part by the ongoing coronavirus pandemic, will be discussed by the President in a meeting with a bipartisan group of lawmakers.

Eurozone inflation rebounded in January, according to official data released on Tuesday, ending months of falling prices. According to Eurostat, the European Commission’s statistics office, headline consumer price inflation reached 0.9% in January compared to a 0.3% decline in December. The reading, an 11-month high, confirmed Eurostat’s flash estimates published earlier in February.

The head of the US central bank said policy would remain "accommodative" until labor market slack had been absorbed, potentially pointing to an extended period of low interest rates. In remarks prepared for his semi-annual monetary policy report to the Senate Banking committee, Jerome Powell, also said that the Federal Reserve would continue to purchase shorter-term Treasuries and mortgage backed securities at the same pace "at least" until "substantial" progress had been made toward its goals.

More than 6,500 migrant workers from India, Pakistan, Nepal, Bangladesh and Sri Lanka have died in Qatar in the last 10 years since the country won the right to host the World Cup, reported the Guardian on Tuesday. According to the report from the newspaper an average of 12 migrant workers have died each week since the night in December 2010 and it is likely that they have perished while working on infrastructure projects made for the football World Cup tournament.

German business sentiment improved in February despite the Covid-19 lockdown, according to a survey released on Monday by the Ifo Institute. The business climate index rose to 92.4 from an upwardly-revised 90.3 in January, beating expectations for a reading of 90.5.