FTSE 100 Live 25 March: Index closes slightly lower, but still near record high, Cocoa prices surge
Investors will be looking for fresh progress this week after the FTSE 100 index closed on Friday at its highest level in a year.
Bets on interest rate cuts by the summer fuelled the advance, with London’s top flight up by more than 2.5%.
DIY chain Kingfisher is in the spotlight today, with its annual profits lower due to weaker trading in France and Poland.
FTSE 100 Live Monday
B&Q owner Kingfisher in profits setback
National Express owner delays results
Virgin Wines reports profit cheer
Closing market snapshot
Monday 25 March 2024 17:01 , Daniel O'Boyle
Take a look at our end-of-day market snapshot as the FTSE 100 closed a little lower, but record highs still remain in sight.
FTSE 100 closes at 7,917.57
Monday 25 March 2024 16:43 , Daniel O'Boyle
The FTSE 100 closed down by about 0.2% at 7,917.57
The index fell as low as 7890 before recovering in the afternoon.
That rise leaves it within one very strong day of trading of an all-time high.
Kingfisher was among the top risers despite a third profit warning in six months.
UK economy in top spot in March?
Monday 25 March 2024 16:22 , Daniel O'Boyle
Panmure Gordon economist Simon French notes that recent PMI figures have the UK as the best-performing major economy in the world during March.
Luxury shoe label Manolo Blahnik boosts its Asian presence with Hong Kong distribution deal and store
Monday 25 March 2024 16:18 , Daniel O'Boyle
London luxury shoe brand Manolo Blahnik has boosted its presence in Asia with a new joint venture and store opening in Hong Kong.
The label, founded by the 81 year old Spanish footwear designer in 1971 has signed a partnership deal with luxury brand distributor Bluebell Group.
It follows other tie-in between the two companies since 2016 in countries such as Japan, Malaysia, Singapore and Taiwan.
Market snapshot
Monday 25 March 2024 16:00 , Daniel O'Boyle
Check out our afternoon market snapshot
The Mortgage Works offers sub-4% buy-to-let mortgage
Monday 25 March 2024 15:42 , Daniel O'Boyle
Nationwide-owned lender the Mortgage Works has become the first buy-to-let lender in the current cycle to offer a sub-4% mortgage.
The land-lord focussed lender is bringing in lower rates from 26 March, including a 3.99% five-year fix with a 55% LTV and 3% fee. Mortgages with lower deposits or fees still remain well above the 4% mark.
The cuts come days after the Bank of England signalled that it may start reducing its own interest rates soon. The Bank’s Monetary Policy Committee opted to keep interest rates at 5.25% last week, but no member voted for a hike for the first time since 2021, while some comments from the Bank suggested it was ready to think about cuts.
Average house price-to-earnings ratios improved last year amid wage growth
Monday 25 March 2024 15:18 , Daniel O'Boyle
Housing affordability improved in three-quarters (75%) of local authorities across England and Wales in 2023, compared with the previous year, according to the Office for National Statistics (ONS).
Affordability worsened in just under a quarter (24%) of local authorities and remained the same in 1%, the ONS said.
Average house prices increased in just over two-thirds (69%) of areas compared with 2022 – but average earnings increased in a bigger proportion of areas, at 88%.
Cocoa tops $9000 a ton
Monday 25 March 2024 14:36 , Daniel O'Boyle
The price of cocoa has continued to surge, and is now more than $9000 a ton. That makes it more expensive than coppper.
Susannah Streeter, head of money and markets at Hargreaves Lansdown, says: “As shoppers stock up on chocolate ahead of the Easter extravaganza, cocoa prices have surged to fresh historic highs indicating even pricier products will hit the shelves in the months to come. Already big manufacturers like Cadbury owner Mondelez have warned that they may have to raise prices again as a consequence.
“The upswing in cocoa prices, to breach $9300 per ton, is linked to concerns about tight supplies in west Africa, with some plants reducing activity due to financing issues. Shipments were down from Ivory Coast by almost a third between October and March compared to the same period last year. Sugar prices have dipped back from January highs but remain hovering near levels not seen since 2017.”
Market snapshot: FTSE 100 rallies
Monday 25 March 2024 14:34 , Daniel O'Boyle
The FTSE 100 has rallied and is once again close to the 8000 mark.
‘Inflation in the UK will be too low for the next three years’, top economists say
Monday 25 March 2024 13:08 , Daniel O'Boyle
Inflation in the UK “will be too low for the next three years”, prompting the Bank of England to slash interest rates, according to top economics consultancy Capital Economics.
New research from the consultancy projects inflation to fall below the 2% target next month, when the new energy price cap comes into effect. That would bring the UK’s inflation rate below 2% sooner than in the US or Eurozone.
Capital’s economists then project inflation to fall to as low as 0.5% later this year, and to stay below the 2% target for all of 2025 and 2026.
Capital said: “The Bank may therefore shift from worrying about inflation being too high to fretting about it being too low.”
Market snapshot: FTSE 100 below 7900
Monday 25 March 2024 13:00 , Daniel O'Boyle
Take a look at our latest market snapshot as the FTSE 100 falls
Boeing CEO quits
Monday 25 March 2024 12:54 , Daniel O'Boyle
Boeing’s CEO and a number of other top executives will quit the aircraft maker amid concerns about its safety record.
Dave Calhoun will exit the top roll this year, and chair Larry Kellner will not stand for re-election.
Stan Deal, head of Boeing’s commercial airplanes air, is also leaving.
Boeing’s shares rose 2% in premarket trading.
The street that symbolises the ever-changing City
Monday 25 March 2024 12:42 , Daniel O'Boyle
Few streets symbolise the dizzying changes in the City of London landscape over the past half century better than Bishopsgate on the eastern fringe of the Square Mile.
When 99 Bishopsgate went up for Hongkong Bank in 1976 it was one of the tallest towers in the City at 24 storeys. It also boasted the fastest lifts in Europe. At that time Bishopsgate was a largely run down strip of low-rise buildings that bled into what was then the seedy and impoverished East End districts of Shoreditch and Spitalfields.
Even when that building was badly damaged by an IRA bomb in 1993 Bishopsgate still felt very much “edge of City”. Now it is a cliff face of glass and steel with the newly completed 22 and 8 Bishopsgate blocks rubbing shoulders with the Heron Tower, and 55 Bishopsgate soon to start emerging from the ground.
Growth in disposable income for lowest-earning households, figures suggest
Monday 25 March 2024 11:53 , Daniel O'Boyle
The lowest-earning households saw their disposable income grow for the first time since August 2021, figures suggest.
The disposable income for these households grew by 4.9% in February, largely driven by a continued increase in gross income and a sharp slowdown in core inflation, according to the Asda Income Tracker, compiled by the Centre for Economics and Business Research (Cebr).
However, while these households saw some “green shoots” of recovery, the figures show that their discretionary income is still negative, with their take-home pay still £68 less than the amount needed to cover bills and other essentials.
South West Water owner delays environmental performance rating target
Monday 25 March 2024 11:10 , Daniel O'Boyle
The company behind South West Water and Bristol Water has abandoned its ambition to reach a four-star environmental performance rating in 2024, blaming “current operating conditions”.
Pennon Group said that it now does not think it will achieve the four-star environmental performance assessment result until 2025.
It expects to be given a two-star rating for the second year in a row for 2023, something that the Environment Agency says means that the “company requires improvement”.
Taxpayer's NatWest stake now below 30%
Monday 25 March 2024 10:41 , Daniel O'Boyle
The Government’s stake in NatWest is now below 30%, after it sold off another tranche of shares.
Filings show the taxpayer’s stake in the banking giant is down from 30.98% to 29.8%. NatWest was bailed out during the financial crisis, and the Government has been selling down its stake in the following years. It has sped up the selling in recent months after the controversy over Nigel Farage’s bank account with NatWest-owned Coutts.
The Treasury is planning a retail offering of NatWest shares later this year.
Mobico and Direct Line shares under pressure, FTSE 100 slightly lower
Monday 25 March 2024 10:14 , Graeme Evans
Shares in National Express owner Mobico are down 5% or 3.3p to 68.15p after 2023 figures were put back a second time due to accounting issues at its recently-expanded German rail unit.
Today’s delay was blamed on the impact of "unexpected" changes to official German figures used to calculate the recovery of energy costs.
The results, which usually arrive in late February, are now due in the second half of next month and will show earnings of between £160 million and £175 million.
That compares with a previous forecast range of £175 million-£185 million, when Mobico said the UK-based National Express coach operation performed in line with hopes.
Mobico shares are now down 43% over the past year, having suspended its dividend in October alongside an earlier profits downgrade.
The shares were joined at the bottom of the FTSE 250 index by Direct Line Insurance as traders reacted to Friday evening’s disclosure by Belgium’s Ageas that it is no longer interested in bidding for the Churchill and Green Flag owner.
Shares skidded 13% or 26.2p to 182.8p but are still higher than the 163p seen before the start of takeover speculation in late February.
Analysts at Jefferies and UBS reckon the shares are worth 240p, having reviewed the company’s standalone strategy and new £100 million cost reduction plan.
The wider FTSE 250 fell 0.5% or 104.71 points to 19,619.61, while the FTSE 100 index held firm after last week’s 2.5% improvement led to a one-year high on Friday.
Gains by heavyweights including BP, Shell, BAE Systems and Rio Tinto offset weakness in the housebuilding sector as London’s top flight drifted 12.75 points to 7918.17.
The lacklustre session reflected worries that comments by Federal Reserve policymakers or release of the central bank’s favoured inflation gauge will upset optimism over summer interest rate cuts.
Ofgem proposes 'dynamic' energy price cap
Monday 25 March 2024 10:12 , Daniel O'Boyle
The Energy Price Cap could be replaced by a “dynamic” or “targeted” system, that could mean energy prices will change depending on the time of day.
Ofgem is consulting on “a range of options for the future of the price cap”, amid the rise of renewable energy sources like solar and wind where output can vary depending on the time and weather.
The new options include a “dynamic cap” to encourage the public to shift the time they use energy, or “a targeted cap which could be based on a variety of factors such as vulnerability”.
Tim Jarvis, Ofgem’s Director General of Retail and Markets, said: “While the price cap played an important role in protecting consumers from the loyalty penalty that existed before its introduction, the energy market is changing as we move to net zero, and we recognise the systems we have in place may need to change too.”
Virgin Wines shares rise amid return to profitability
Monday 25 March 2024 09:23 , Simon Hunt
Shares in Virgin Wines jumped 10% this morning after the online drinks retailer sounded a cheery note over consumer confidence as it returned to profitability.
The Norwich-based business posted a pre-tax profit of £1.1 million for the six months to end December, compared to a £0.7 million loss in the year to June 2023 amid a rise in sales, an uptick in membership numbers and a fall in cancellation rates.
The firm said its new digital warehouse management system was beginning to pay off, with the cost per case for fulfilment in our distribution centres reduced by 25% year-on-year.
Analysts at Liberum said: “The first half performance is admirable delivering strong profitability despite the challenging trading environment.
“Looking ahead the easing of inflation pressures as well as an ongoing focus across the business to reduce costs should ensure continued the group remain the lowest ‘cost to serve’ in the sector.”
CEO Jay Wright told the Standard: “As the consumer environment starts to ease ever so slightly we start to see customers become even more loyal. We’re optimistic about the future.”
Black Sheep coffee 'considering US IPO' in fresh City blow
Monday 25 March 2024 09:23 , Daniel O'Boyle
Black Sheep Coffee, a cafe chain founded in Camden, is reportedly planning a US IPO, in the latest blow to the City’s struggling capital markets.
Hospitality sector newsletter Propel reports that Black Sheep aims to float in the US “soon”, as it steps up international expansion plans. It is currently in the process of raising £15 million
It has 82 shops in the UK, the majority of which are in London, but is starting to open locations in the UAE. It currently has no shops in the US, though it has plans to launch there as well.
The failure to attract the float of a London-based chain would be another blow to the City, after firms like Arm, Flutter and CRH opted to either IPO in New York or move their listing there.
Alton Towers owner in the black after Legoland write downs
Monday 25 March 2024 09:19 , Simon English
Merlin Entertainments, the company behind the London Eye, Alton Towers, Madame Tussauds and a host of other attractions recorded a loss for the year of £214 million.
That was down to an impairment charge for Legoland parks in New York and South Korea, which have not bounced back from Covid as quickly as hoped, though the company remains confident in their future success.
Visitor numbers for 2023 jumped from 55 million to 62 million and sales are up 8% to £2.12 billion. Without the exceptional impairment charge, the profit before tax would have been £32 million.
Merlin, owned by a private equity consortium that includes Blackstone, also today bought the Orlando Wheel at ICON Park, one of the tallest observation wheels in the US.
CEO Scott O’Neil said: “Our solid financial performance is a testament to the passion of our 30,000 talented teammates around the world and the authentic, inspiring culture in which we work; the strength of the brands we are entrusted to bring to life, most notably the LEGO brand.”
Merlin was fined £5 million in 2016 after a crash at the Smiler rollercoaster at Alton Towers caused serious injuries. Two riders lost a leg in the accident.
Market snapshot with FTSE 100 steady
Monday 25 March 2024 08:41 , Daniel O'Boyle
Take a look at our latest market snapshot as the FTSE 100 remains close to the 8000 mark.
FTSE 100 holds firm as oil stocks rally, Direct Line down 12%
Monday 25 March 2024 08:35 , Graeme Evans
The robust run by the FTSE 100 index continued today after shares in BP, Shell, BAE Systems and Rio Tinto rose by around 1%.
London’s top flight stayed at a one-year high of 7931, in contrast to the 0.6% decline for the UK-focused FTSE 250 index.
B&Q owner Kingfisher dropped 2% or 4.8p to 228.8p after its annual results, while housebuilders Taylor Wimpey and Persimmon fell by just under 1%.
In the FTSE 250 index, Direct Line Insurance reversed 12% or 24.5p to 184.5p after Friday’s confirmation that Belgium’s Ageas is no longer a takeover suitor.
National Express owner Mobico also fell 8% or 5.5p to 65.95p after revealing a fresh delay to annual results due to accounting issues relating to its recently-expanded German rail unit.
Mobico takes big hit from German stat changes
Monday 25 March 2024 07:41 , Daniel O'Boyle
Mobico, formerly known as National Express, has warned its profits will be hit by "unexpected" changes to official German figures used to calculate recovery of energy costs.
The transport firm said its results will be delayed until mid-April as “a number of judgemental items” in its accounts still need to be settled.
Underlying profits £15m lower, and the business will take a £70 million "onerous contract provision" for 2023, plus an additional £25 million for 2022.
Mobico said: “The Group has made an initial assessment of the implications of the revised indices. Whilst it is the Group's expectation that the models used to calculate the profitability of the German Rail business remain valid, further work is now required to determine the full effect of the revised indices”.
Profits down 22% at B&Q owner Kingfisher
Monday 25 March 2024 07:36 , Michael Hunter
B&Q and Screwfix owner Kingfisher today revealed lower annual sales and profits amid tough conditions for its operations in France.
Profit before tax fell by over a fifth to £475 million, while sales declined 1.8% to almost £13 billion.
The Home improvement and builders’ merchant chain said sales in the UK and Ireland were “positive” but there was a “more challenging consumer backdrop” on the continent.
Its French business, Castorama, will be at the centre of a new plan to “significantly improve performance and profitability”.
Thierry Garnier, chief executive officer, said: “In France, where the market has been impacted by low consumer confidence, we have made significant adjustments to the cost base and started to embed e-commerce marketplace and trade customer initiatives similar to those successfully implemented in the UK.”
FTSE 100 seen lower after strong week, US rates guidance in focus
Monday 25 March 2024 07:12 , Graeme Evans
The FTSE 100 index is set for a weaker session after last week’s rise of 2.6% left London’s leading benchmark at its highest level in just over a year.
The improvement in risk appetite reflected optimism on the near term outlook for interest rate cuts by the US Federal Reserve and other central banks.
This mood will be tested in a week of speeches by several US monetary policymakers and release of the central bank’s preferred measure of inflation.
The S&P 500 index rose more than 2% last week but is expected to make a flat start today, while IG Index sees the FTSE 100 falling about 15 points to 7916.
Asia markets have traded in the red, led by a decline of more than 1% for the Nikkei 225 after last week’s record high. The Hang Seng index is down by 0.3%.
Recap: Friday's top stories
Monday 25 March 2024 06:42 , Simon Hunt
Good morning from the Standard City desk.
Vodafone knows a thing or two about mergers. The Paddington-based telco still holds the crown for the world’s biggest-ever M&A transaction, acquiring German rival Mannesman in 1999 in a $183 billion deal (double that in today’s money). Elon Musk’s $44 billion Twitter takeover, or Microsoft’s $69 billion purchase of Activision, concluded last year, look puny by comparison.
Back then, Vodafone was one of the most exciting, most valuable companies in the world — not far off the market cap of Microsoft. It was viewed as a tech stock with a big growth story to tell.
Now? Not so much. It’s a smaller, leaner organisation, and shareholders see it as a utility stock — a company with ageing infrastructure, wrestling with the high costs of maintenance and upgrades.
And that forms the rationale behind its latest deal, the proposed £15 billion merger with Three, which the competition watchdog, the CMA, on Friday said would go through its more thorough ‘phase 2’ investigation.
Voda says it can’t afford network improvements without more market share. There are four network operators today — three is the magic number, says CEO Margarita Della Valle. But the CMA fears higher prices and worse customer service could result.
Voda is destined to be emblematic of the UK stock market’s dealmaking chutzpah. If the firm behind the biggest merger failed to get a deal through at home it will ring alarm bells over what has changed and why for a once buccaneering giant and blockbuster City M&A.
Here’s a summary of our other top stories from Friday:
GfK consumer confidence figs are poor. “Improvements seen since a year ago have vanished”.
Wetherspoons booms back – profit up 54% to £26m. “Slow three year slog to get back to normal after the pandemic,” says Sir Tim Martin. “The company continues to be concerned about the possibility of further lockdowns and about the efficacy of the government enquiry into the pandemic, which will not be concluded for several years.”
Pension giant Phoenix generates cash of £2bn, up from £1.5bn
Kitchen roll and toilet paper maker Accrol is latest company to be bought off London Stock Exchange as it agrees £127.5 million deal from Portuguese firm
And in City Spy...
