Weekly review

Equity view

UK pharma giant GSK has welcomed a US court ruling excluding expert testimony in the long-running Zantac lawsuit where the plaintiffs allege the heartburn drug caused cancer and said it would now ask for the case to be dismissed. GSK said it would now seek dismissal of the upcoming Wilson case in the Florida State Court where the plaintiffs “alleged a causal link between ranitidine and prostate cancer”.

AstraZeneca announced on Friday that the US Food and Drug Administration (FDA) has approved its drug durvalumab, branded Imfinzi, for the treatment of early-stage non-small cell lung cancer (NSCLC) in patients eligible for surgery. The FTSE 100 pharmaceuticals giant said the approval was based on results from the phase thee AEGEAN trial, which showed that Imfinzi combined with chemotherapy before surgery and as a standalone treatment after surgery significantly reduced the risk of cancer recurrence, progression or death by 32% compared to chemotherapy alone.

Shares in bioplastics and radio frequency technology business Biome Technologies tanked early on Friday after the group launched a heavily discounted equity round in an effort to fight off liquidation. Biome intends to raise up £950,000 through the issuance of 19.0m shares at 5.0p a piece, a 76.7% discount to its mid-market closing price on Thursday, and also launched an £80,000 retail offer to existing shareholders.

GlobalData announced a modification to its £10m share buyback programme on Friday, designed to return surplus capital to shareholders. The AIM-traded company originally set a limit on daily share repurchases to no more than 25% of the average daily trading volume, based on the 20 trading days prior to each purchase.

Woodside flagged anticipated first-half production costs of $710m to $780m in an update on Thursday, with royalties, excise and levies expected to amount to $180m to $210m. The company said the depreciation and amortisation of oil and gas properties was projected to be between $1.85bn and $1.95bn, not including depreciation of lease assets.

William Hill and 888 owner Evoke reported a slump in first-half profits on Thursday as it highlighted a "disappointing" performance but sounded an upbeat note on the outlook. In the six months to the end of June, earnings before interest, tax, depreciation and amortisation fell 67% to £43.8m, while revenue dipped 2% from the same period a year earlier to £862m.

Gas and oil production company Diversified Energy delivered strong H1 results on Thursday. Diversified Energy said average daily production was 746.0m cubic feet of gas, or 124,000 barrels of oil equivalent, and said it had exited the half at a significantly higher rate of 855.0m, or 143,000 boepd.

Rank Group said on Thursday that it swung back into the black in the year to the end of June as the Mecca Bingo and Grosvenor owner hailed a year of strong financial progress. The company posted a pre-tax profit of £15.5m versus a loss of £123.3m a year earlier. Meanwhile, like-for-like underlying operating profit was £46.5m, slightly ahead of analysts expectations and more than double the prior year's £20.1m.

British infrastructure company Balfour Beatty on Wednesday lifted its dividend by 9% and said it expected annual earnings to grow after a jump in half-year profit. The company said pre-tax profit for the six months to June rose to £112m from £82m a year earlier. It lifted the dividend to 3.8p a share from 3.5p.

Holiday company Tui on Wednesday posted better-than-expected third-quarter earnings on the back of strong summer demand and the collapse of German rival FTI. The company, which is Europe's largest travel company, said underlying operating profit rose 37% to €232m in the three months to June, beating the €217m expected by analysts.

Hammerson, in partnership with PIMCO Prime Real Estate, has successfully secured a €350m non-recourse term loan to refinance the existing debt on Dundrum Town Centre in Dublin. The FTSE 250 company said the loan, with its share at €175m, has a maturity of up to seven years and was arranged with lenders Rothesay, BNP Paribas, and Deka.

Insurance firm Aviva said on Wednesday that profits had surged in the six months ended 30 June on the back of an increase in written premiums throughout the period. Aviva said statutory profits were up 58% year-on-year at £654.0m, while operating profits improved 14% to £875.0m. It also declared an interim dividend of 11.9p, up 7% when compared to the same time as a year earlier.

Synthomer reported growth in revenues, earnings and underlying earnings per share over the first half of 2024 and reiterated its full-year guidance. Nonetheless, whilst trading was in line with expectations, there was no evidence of a "sustained" increase in end-market demand.

Tate & Lyle said on Tuesday that it has appointed Sarah Kuijlaars as its chief financial officer with effect from 16 September.The company said Kuijlaars is an experienced international finance leader, having previously served as CFO of De Beers Group and Arcadis NV. Prior to that, she was deputy CFO at Rolls-Royce Holdings and held a number of senior finance leadership roles during a 25-year career at Shell. She is currently a non-executive director of car dealership Inchcape.

Just Group shares were rocketing on Tuesday morning, after it announced a robust set of first-half results. The FTSE 250 company reported a 44% increase in underlying operating profit, reaching £249m, compared to £173m in the same period last year.

Plastic piping systems manufacturer Genuit said on Tuesday that pre-tax profits had almost halved in the first six months of the year as a result of reduced turnover throughout the period. Genuit said pre-tax profits had sunk 48.5% to £15.3m, while revenues fell 10.6% to £272.4m and statutory earnings per share crashed 63.8% to 3.4p. H1 dividends per share were unchanged at 4.1p.

Environmental markets investment trust Impax Environmental Markets said on Monday that net asset value had fallen in the six months ended 30 June amid "material volatility". Impax Environmental said net asset values had slipped from 434.9p at the end of FY24 to 429.3p at the midway point of FY24, while net assets fell from £1.22bn to £1.11bn. Ordinary share prices dropped from 400.0p to 388.0p.

Landscaping and building products and supplier Marshalls reported a 13% decline in revenue for the first half on Monday, amounting to £306.7m. The FTSE 250 company said adjusted EBITDA fell 14% to £50.6m, and adjusted operating profit dropped 19% to £34m.

Broker WH Ireland posted a widening of its full-year losses on Monday as revenue fell in an "extremely challenging" market backdrop. In the year to the end of March, the underlying loss before tax widened to £2.5m from £2m a year earlier, while statutory pre-tax losses widened to £5.9m from £1.8m, partly due to restructuring costs of £2.9m.

BT Group welcomed news that Bharti Global had acquired Altice UK's 24.5% stake in the telecoms carrier. "We welcome investors who recognise the long-term value of our business, and this scale of investment from Bharti Global is a great vote of confidence in the future of BT Group and our strategy," BT boss, Alison Kirkby said.

Economic news

Retail sales bounced back in July, albeit a touch less than expected, according to figures released on Friday by the Office for National Statistics. Retail sales volumes rose 0.5% on the month in July following a 0.9% decline in June, when they were hit by bad weather and uncertainty over the general election. Economists were expecting a 0.6% increase.

The UK economy grew 0.6% in the second quarter, down slightly on 0.7% growth in the first quarter but in line with expectations, according to data released on Thursday by the Office for National Statistics. The figures also revealed that on a monthly basis, the economy showed no growth in June, as expected.

UK house prices jumped 2.7% in June, according to the Office for National Statistics, unchanged from the prior month's revised estimate.Average house prices for the 12 months ended 30 June came to £288,000, up £8,000 year-on-year, while house prices rose 2.4% to £305,000 in England, 1.8% to £216,000 in Wales, 4.3% to £192,000 in Scotland and 6.4% to £185,000 in Northern Ireland.

Consumer price inflation rose in July for the first time since December, albeit less than expected. According to figures released on Wednesday by the Office for National Statistics, CPI rose by 2.2%, up from 2% in June and May but coming in below expectations of 2.3%. It is now back above the Bank of England’s 2% target.

Grocery price inflation in the UK has risen for the first time since March last year, according to fresh data from Kantar on Tuesday. In the four weeks ended 4 August, grocery inflation increased to 1.8%, up from 1.6% the prior month. The shift was reflected in a mixed landscape for consumers, with prices rising across 182 product categories while falling in 89 others.

The Eastern Green Link 2 (EGL2), a major electricity transmission project connecting Scotland and Yorkshire, has become the first to complete Ofgem’s fast-tracked funding process under the Accelerated Strategic Transmission Investment (ASTI) framework. EGL2 involves constructing a 500-kilometre subsea and underground cable capable of powering up to two million homes, with a total investment of £3.4bn.

The UK unemployment rate fell unexpectedly in June, according to figures on Tuesday by the Office for National Statistics. The unemployment rate declined to 4.2% from 4.4% in May, coming in below expectations for a reading of 4.5%. The data also showed that growth in average earnings excluding bonuses fell to 5.4% from 5.8% in May and versus expectations of 4.6%. This marked the slowest pace of growth since May to July 2022.

Britain's Heathrow Airport said on Monday that passenger numbers had fallen by 90,000 on certain routes following the introduction of a £10 electronic travel authorisation charge that it branded “devastating" for its hub competitiveness. Heathrow said: “The latest data following the introduction of the ETA shows that Heathrow has lost 90,000 transfer passengers on routes operating to and from the seven countries included in the scheme, since its introduction in 2023."

Catherine Mann, an external member of the Bank of England’s monetary policy committee, has said the UK should not be "seduced" into thinking the battle against inflation is over after a short-term drop in the headline measure targeted by the Bank. In an Economics Show podcast with the Financial Times, Mann said she was still concerned about upside risks to inflation despite the main rate remaining at the bank’s 2% target in June.

International events

Retail sales jumped last month, driven by a rebound in auto purchases. According to the Department of Commerce, in seasonally adjusted terms, retail sales volumes shot 1.0% higher month-on-month to reach $709.7bn. That followed a revised 0.2% decline in June (Preliminary: 0.0%), but was more than twice the 0.3% gain projected by economists.

Retail sales in China rose more than expected last month but industrial production was below forecasts, official data showed on Thursday. Retail sales rose by 2.7% in July from a year ago, beating forecasts of 2.6% growth. However, industrial production rose by 5.1%, below estimates of 5.2%.

The cost of living in the US rose in July at its slowest pace in over three years. According to the Department of Labor, the Consumer Price Index increased at a month-on-month clip of 0.2% at both the headline and core level. That was just as expected by economists.

The eurozone economy grew by 0.3% in the second quarter on a seasonally adjusted basis, according to a flash estimate published on Wednesday. Gross domestic product grew by the same figure for the broader European Union, the official Eurostat statistic added.

Mortgage applications surged 16.8% in the week ended 9 August, according to the Mortgage Bankers Association, the sharpest week-on-week increase since January 2023. Applications to refinance a home soared 35%, while applications to purchase a home were up a much more modest 3%.

German business sentiment deteriorated sharply in August, according to a survey released on Tuesday.The ZEW indicator of economic sentiment fell 22.6 points from July to 19.2. This marked the worst decline since July 2022.The indicator for the assessment of the current economic situation in Germany also declined, by 8.4 points to -77.3 in August.

The Organisation for Petroleum Exporting Countries trimmed its forecast for oil demand growth in 2024. It said that economic data covering the first quarter, and in some cases the second quarter, as well as a softening in expectations for increased oil demand in the People's Republic of China were responsible.