Weekly review

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4imprint said on Friday that it was on track to meet full-year expectations despite supply chain issues, amid a recovery in demand. In an update on current trading, the group said it has made further "encouraging progress against the backdrop of continuing uncertain and volatile market conditions".

Insurer Beazley on Friday reported higher-than-expected gross written premiums, driven by cyber & executive risk and its specialty lines divisions as it set aside $125m in natural disasters claims, including Hurricane Ida and the European floods. The company, which provides casualty and property, cyber and political risk insurance, said it now expects combined ratio - a profitability measure - to be in the mid-90s for the year. A level below 100% indicates an underwriting profit.

NortonLifeLock shareholders have approved the company's $8.6bn takeover of UK cybersecurity firm Avast at a special meeting on Thursday, according to a stock exchange filing on Friday. Avast's shareholders are also required to approve the deal at a court meeting on November 18 and general meeting immediately afterwards.

Morgan Advanced Materials said in a trading update on Friday that sales for the first nine months of the year were 8.9% higher on an organic constant-currency basis, compared to the same period last year. The FTSE 250 company said its thermal products division saw sales 9.9% higher, with growth in molten metal systems and thermal ceramics, while in the carbon and technical ceramics operation sales were 8.1% higher, with growth in electrical carbon and technical ceramics offsetting a decline in seals and bearings.

Smith & Nephew warned annual results would be at the low end of its guidance after Covid-19 and product shortages affected its orthopaedics business in the third quarter. Revenue rose 5.5%, or 2.3% on an underlying basis, to $1.27bn in the three months to 2 October, the medical technology group said in a trading update.

Luxury car maker Aston Martin backed its full-year guidance on Thursday as it reported a jump in revenues and a narrowing of its losses amid strong demand for cars such as its DBX. In the nine months to 30 September, revenue jumped 173% to £736.4m, driven by customer demand, with total wholesale volumes up 173% to 4,250. For the third quarter, revenues rose 92% to £237.6m.

East Europe-focused budget airline Wizz Air swung to a first-half profit as the easing of pandemic restrictions helped its second quarter performance. The company on Thursday said it made a €57m operating profit for the three months to September 30, marking a return towards 2019 traffic levels as it continued to transition to operational normality and saw more people return to flying “despite lingering restrictions”.

Tate & Lyle reported a rise in first-half profit and revenue on Thursday following a particularly strong performance in the food & beverage solutions business. In the six months to 30 September, pre-tax profit was up 20% at £85m on revenue of £656m, up 19% from the same period a year ago.

Packaging company Smurfit Kappa said on Wednesday that it was on track to meet full-year earnings expectations as it posted a jump in revenue and earnings for the nine months to 30 September. Revenue grew 15% year-on-year to €7.29bn, with earnings before interest, tax, depreciation and amortisation 10% higher at €1.24bn.

Construction and regeneration group Morgan Sindall said on Wednesday that full-year results were set to be "slightly above" its expectations amid continued strong trading. The company said that since its half-year results in early August, trading has remained strong and inflation in the supply chain and the availability of materials and labour have been manageable.

Wealth fund manager Quilter on Wednesday said it aimed to more than double operating profit by 2025 and would return £350m from the sale of its international unit to shareholders. The company also revised its dividend policy with a new target pay-out range of 50% -70% of post-tax, post-interest adjusted profits, up from 40% - 60% of post-tax adjusted profits.

Darktrace tumbled on Wednesday after private equity firm Vitruvian Partners sold 11m shares in the cybersecurity group in a placing. The shares were sold at 580p each, raising gross proceeds of around £63.8m.

Surging oil and gas prices helped energy giant BP report better-than-expected third quarter profits on Tuesday driven by higher demand and announced a $1.25bn share buyback. Underlying replacement cost profit came in at $3.32bn, beating forecasts of $3.06bn and compared with a $2.8bn profit in the previous three months and $86m a year ago. The dividend was maintained at 5.46 cents a share.

East-Europe focused low-cost airline Wizz Air reported a jump in passenger numbers during October as the travel sector rebounded from Covid lockdowns. Passenger numbers in October more than doubled to 2.97m up from 1.14m a year ago. Load factor rose 13.6 percentage points to 79.5%.

Defence and security technology company Chemring said it had won a $99m US government contract to supply a biological warfare detection system, and added that full-year trading was in line with expectations. The Enhanced Maritime Biological Detection system is an advanced sensor system to detect, collect and identify airborne biological warfare agents, Chemring said on Tuesday.

TP Icap said it expected annual revenue to be similar to 2020 after increased volatility and trading volumes sent third-quarter income higher for the interdealer broker. Group income rose 15% to £447m in the three months to the end of September from a year earlier or 20% at constant currency.

Howden Joinery said it expected annual profits to be at the top end of current analyst forecasts of £298m - £360m as the surge in DIY demand continued into the second half. The company on Monday said revenue rose by a fifth from June 13 to the end of October driven again from pent-up demand from consumers working from home during the Covid pandemic. Compared with pre-crisis 2019 sales rose 35.7%.

Information, analytics and eCommerce company Ascential said it was buying 4K Miles, a digital commerce advertising and marketplace insights business for an undisclosed sum. The deal is expected to close in December. 4K Miles serves more than 500 challenger Chinese brands trading on Amazon marketplaces including the US, major European countries, Mexico, India and Japan.

LXi REIT said it had agreed two long-let forward funding acquisitions worth a total £19.5m in Essex. The company on Monday said it had exchanged contracts on the pre-let forward funding of a Lidl foodstore and a Lok n' Store self-storage facility in Basildon, Essex.

Mitie Group has acquired Rock Power Connections, it announced on Monday, which specialises in the design and installation of new high voltage electricity supplies, the renewal of industrial and commercial customers' electrical assets up to 132kV, and electric vehicle (EV) charging installation for non-residential blue-chip customers. The FTSE 250 company said the transaction consideration comprised an initial payment of £10m, with two deferred payments of up to a total of £4.5m by the end of the 2023 financial year, linked to stretching performance targets.

Economic news

The average UK house price topped £270,000 for the first time in October but demand looks set to cool, according to the latest figures from Halifax. House prices rose 0.9% on the month following a 1.7% increase in September. On the year, prices were 8.1% higher in October, up from 7.4% growth the month before.

The decline in footfall eased in October, industry data showed on Friday, giving retailers a boost ahead of the crucial Christmas shopping season. According to data released by the British Retail Consortium in conjunction with Sensormatic IQ, total UK footfall decreased 13.7% in October compared to the same month in 2019. A 3.2 percentage point improvement on September, footfall is now above the three-month average decline of 16.0%.

The Monetary Policy Committee stood pat on policy with fewer of its members calling for an interest rate hike than had been expected. According to Bank of England Governor, Andrew Bailey, inflation was set to peak at 5.0% in April 2022 and to fall "materially" from the second half of next year, yet "some modest tightening of policy was likely to be necessary".

Private new car registrations were lower on the year in October, according to fresh industry figures on Thursday morning, as both supply constraints and demand held back the market. A total of 58,405 new cars were registered in the UK in October, according to the Society of Motor Manufacturers and Traders (SMMT), down from the 60,422 registered a year ago and the 60,100 new cars recorded in October 2019, pre-pandemic.

Growth picked up in the UK construction industry in October but uncertainties over supplies and prices held up new contracts, a survey showed. The IHS Markit/CIPS UK construction purchasing managers' index (PMI) rose to 54.6 from 52.6 a month earlier. A reading of 50 marks the difference between growth and contraction.

A buoyant services sector helped bolster the UK economy last month, a widely-respected survey showed on Wednesday, but inflationary pressures continued to mount. The IHS Markit Services PMI Business Activity index, published ahead of November’s Bank of England rate-setting meeting on Thursday, came in at 59.1 in October, a three-month high and up on September’s 55.4.

Retail footfall picked up last month, industry data showed on Thursday, boosted by the October half term holiday. According to retail consultancy Springboard, footfall in the four weeks to 30 October was down 13.4% on the same month in 2019, a marked improvement on September’s 17.4% year-on-two year decline.

UK house prices edged higher in October, despite the stamp duty holiday coming to an end, industry data showed on Wednesday. The Nationwide Monthly House Price Index came in at 497.8 in October, up on September’s 494.6, while the average price for a house in the UK is now £250,311, the first time it has topped a quarter of a million pounds.

Small manufacturers saw growth slow in the last three months, an industry survey showed on Wednesday, after labour and supply shortages hit home. According to the latest CBI SME Trends Survey, growth in output volumes in the three months to October slowed to a balance of 14% from July’s high of 36%.

The slowdown in UK manufacturing growth eased a little in October, but the sector continued to be weighed down by supply chain issues, according to a survey released on Monday. The IHS Markit/CIPS manufacturing purchasing managers’ index ticked up to 57.8 from 57.1 in September, rising for the first time in five months and coming in a touch ahead of the initial estimate of 57.7.

International events

US jobs growth and unemployment numbers for October both came in a bit better-than-expected, alongside big revisions to prior month´s data. According to the Department of Labor, non-farm payrolls jumped by 531,000 last month, besting forecasts for an increase of 425,000.

Eurozone retail sales fell unexpectedly in September, with shoppers in Germany staying at home and overall weaker non-food sales as the fourth wave of the coronavirus pandemic hit the continent. According to preliminary data from Eurostat, the seasonally adjusted volume of retail trade dropped 0.3% month-on-month. On a year-on-year basis, retail sales were still 2.5% higher. Analysts had expected retail sales to increase roughly 0.3% from August's upwardly revised 1.0% increase.

German industrial production unexpectedly fell in September amid supply chain shortages, according to figures released on Friday by Destatis. Industrial production was down 1.1% on the month following a revised 3.5% decline in August and versus expectations for a 1% increase. On the year, output fell 1% in September following a 2.2% rise the month before.

The number of Americans filing for unemployment benefits fell more than expected last week, according to figures released on Thursday by the Labor Department. Jobless claims declined by 14,000 to 269,000 in the week ended 30 October, hitting their lowest level since 14 March 2020. Analysts had been expecting a figure of 275,000.

Economic growth in the Eurozone hit a six-month low in October, a widely-watched survey showed on Thursday, as supply issues and rising Covid-19 cases hampered the recovery. The IHS Markit Eurozone PMI composite output index fell to 54.2 last month, compared to 56.2 in September. It was the lowest reading for six months and the third successive slowdown following a 15-year high in July. It was also marginally below consensus expectations of 54.3.

Order growth in German factories undershot economists' forecasts in September, despite solid readings for auto and capital goods orders. According to the Federal Office of Statistics, in seasonally and calendar-adjusted terms, new manufacturing orders grew at a month-on-month pace of 1.3% (consensus: 1.8%).

Unemployment edged lower across the Eurozone in September, official data showed on Wednesday. According to Eurostat, the European Union’s statistics office, the seasonally-adjusted unemployment rate was 7.4% in September, down marginally on August’s rate of 7.5% and in line with forecasts. It was also below September 2020’s rate of 8.6%, and the lowest rate since April 2020.

Private sector employment in the US grew more than expected in October, according to the latest data from the ADP. Employment rose by 571,000 from September, coming in ahead of expectations for a 400,000 increase. Meanwhile, the September total of jobs added was revised from 568,000 to 523,000.

Eurozone manufacturing struggled last month, industry data showed on Tuesday, as supply constraints weighed heavily on the sector. October’s IHS Markit Eurozone manufacturing purchasing managers' index came in at 58.3. Although a reading above 50.0 indicates growth, the final PMI marked an eight-month low and was below the flash estimate and consensus, both for 58.5. It was also down on September’s reading of 58.6.

US manufacturing sector activity continued to grow at a brisk pace last month, the results of a closely-followed survey revealed. But some economists believed that the details of the report pointed to downside risks over the next few months.