A new FTSE 100 record, strong results by Experian and the IPO plans of Raspberry Pi provided cheer to London investors today.
Burberry, Imperial Brands, Britvic, Compass and TUI are among the other companies in the results spotlight.
Attention is also on the US economy as inflation ticked down to 3.4%, offering slight relief after back-to-back increases.
Meanwhile, there were major developments in two FTSE 250 takeover sagas, as John Wood Group rejected another proposal while the board of International Distribution Services said it was ‘minded to’ accept a £3.5 billion bid.
FTSE 100 Live Wednesday
Raspberry Pi reveals IPO plan
FTSE 100 touches new record
Burberry reveals flat annual sales
FTSE 100 closes at record high yet again
16:36 , Daniel O’Boyle
The FTSE 100 closed at yet another record today, finishing at 8,445.80, up 0.2% for the day.
London’s top flight hit an intraday high early on, at 8471. It failed to keep that momentum, even after a short-lived lift from US inflation data.
However, it remained in positive territory all day, and finished slightly ahead of the previous all-time high, set on Friday.
The FTSE is ow up 8% in the last month.
Experian was the top riser after posting strong results
‘Today’s inflation news keeps multiple 2024 rate cuts on the table’
16:17 , Daniel O’Boyle
Preston Caldwell, Chief US Economist at Morningstar, was optimistic on Fed rate cuts following today’s US CPI data:
Caldwell said: “Today’s inflation news keeps multiple rate cuts on the table for the second half 2024. Our base case is two cuts in 2024 (September and December) but three or four is not implausible with continued inflation progress in conjunction with weakening economic activity.
“Combining the CPI and PPI data, core PCE should post at about 0.25% month on month for April, or a 3% annualised rate.
“Motor vehicle insurance alone contributed 0.07% to the month-on-month core CPI growth of 0.29%. Prices for motor vehicle insurance are now up 47% cumulatively since January 2020, far outpacing the 20% increase in new vehicle prices or 21% increase in vehicle parts prices. It seems highly likely that excess inflation in motor vehicle insurance will cease soon.”
John Wood Group shares fall as it rejects new Sidara bid
15:52 , Daniel O’Boyle
Shares in FTSE 250 engineering firm John Wood Group fell today as it rejected a takeover bid from Dubai-based Sidara.
Sidara made an initial approach earlier this month, and Wood said it made a slightly higher 212p-per-share proposal yesterday, valuing the business at around £1.5 billion.
But the Wood board said it “continued to fundamentally undervalue Wood and its future prospects”.
Wood fought off a takeover bid from private equity giant Apollo last year.
John Wood Group shares fell by as much as 7.2% to 186.2p.
Royal Mail parent ‘minded to’ accept £3.5bn takeover bid from West Ham co-owner Křetínský
14:55 , Daniel O’Boyle
The owner of Royal Mail says it is ‘minded to’ accept a huge £3.5 billion offer from Czech West Ham co-owner Daniel Křetínský.
EP Group, a business owned by Křetínský, made an approach last month to acquire International Distribution Services, which owns Royal Mail as well as a Dutch postage business, but was rebuffed by the IDS board.
The blockbuster potential deal, at 360p per share, would be a 72.7% premium from IDS’ closing share price on 16 April, before the first approach, which was at 320p per share.
Read more here
US inflation decline offers ‘reassurence’, but won’t lead to imminent rate cut
13:35 , Daniel O’Boyle
Richard Flynn, managing director at Charles Schwab UK, said today’s US CPI reading will be welcome, but is not going to change policy for the Fed in the short term.
He says: “Today’s figures show that the rate of inflation has fallen, compared to last month. Although this will offer reassurance to markets after an unwelcome uptick in CPI figures last month, the figures are unlikely to prompt an imminent change in interest rates.
“Patience has been the Fed’s core message lately. Officials have been fairly consistent in stating that current interest rates are sufficiently restrictive to bring inflation under control and that the next move will be a cut. However, it is also clear that they are in no rush to make that move. Whether we see rates reduced in July, September, or December will depend on how inflation changes in the coming months, how the economy performs, and whether any issues arise in the financial system or jobs market. In the meantime, we watch and wait.”
London shares jump on US inflation decline
13:34 , Daniel O’Boyle
London shares have responded well to the decline in US inflation, which is seen as a sign that the persistence of price pressures in the world’s largest economy isn’t as bad as feared.
The FTSE 100 was sitting at 8435 before the reading, but has now jumped to 8459.
US inflation ticks down to 3.4%
13:32 , Daniel O’Boyle
Inflation in the US dipped to 3.4% in April, as expected, remaining sticky but ending the run of disappointing CPI readings.
The decline will be welcomed after back-to-back rises, but it’s unlikely to be enough to put interest rate cuts on the Fed’s agenda any time soon.
Core inflation was also in line with expectations at 3.6%
US inflation expected to remain sticky at 3.4%
12:44 , Daniel O’Boyle
Inflation in the US is expected to tick down only slightly to 3.4% when April figures are published today, as the world’s largest economy continues to struggle with the last mile of its prices battle.
The rate of inflation fell all the way to 3% in June 2023, but never got that low again, and increased in both February and March, to hit 3.5%.
With joblessness remaining low and GDP still growing steadily – despite a slowdown in Q1 – a 3.4% inflation reading is unlikely to convince the Federal Reserve that it needs to cut interest rates any time soon.
City Voices: Calling all UK pension funds – your country needs you!
12:34 , Daniel O’Boyle
We badly need to restore national pride in our stock market
Some of the UK’s most exciting prospects will get the chance to bend the ear of the Chancellor at his Dorneywood retreat tomorrow on the thorny topic of how to revive our struggling equity markets. They shouldn’t pass up the opportunity.
Jeremy Hunt has invited leading fintech and biotech firms to the Buckinghamshire summit to discuss how capital markets can support high-growth companies. Why the urgency? Despite the FTSE100 hitting a new all-time high, we are still underperforming the US, and we are still losing funds from the UK. More needs to be done to grasp the opportunity to restore the UK to its position as a leading financial centre, and one where the most exciting companies ‘want’ to list.
Read more here
TP ICAP sees future in battery metals trading
12:33 , Simon English
CITY trading house saw TP ICAP is suffering a bit of a slowdown compared to last year when it enjoyed record revenues.
In the first quarter of the year broking sales fell 7%, though April looked strong again.
A year ago various US banks collapsed prompting frantic trading from clients.
It claims to be the world’s leading energy broker and saw good activity in April.
Total revenue for the period was down 3% to £570 million, though it reassured the City that for the full year it will do as well as expected.
TP ICAP launched battery metals desks in London and Singapore last month to provide clients with “the opportunity to trade across these fast-growing asset classes, which are expected to a play a crucial role in the energy transition”.
Shares in the broker slipped 5p to 218p today which leaves it valued at £1.7 billion. The stock is up by a third in the last year.
City Comment: Is the Raspberry Pi float a sign of things to come?
11:27 , Jonathan Prynn
It has taken until the 105th day of the year but it will still be “nice as pi” to see London’s IPO market get its second major new listing of 2024, and first of a home grown company.
This is how it should be.
An innovative and pioneering British business gets off the ground, moves into profitability and seeks the deeper funding pools and higher public profile that a main market listing can provide.
Read more here
Tui delivers record sales amid booming demand for holidays
10:33 , Daniel O’Boyle
Holiday giant Tui has revealed better than expected results after notching up record revenues as it said travelling remains “very popular” despite rising prices for trips abroad.
The group – which is switching its listing from London to Frankfurt – reported pre-tax losses of 403.1 million euro (£346.6 million) for the six months to March 31, against 648.8 million euro (£557.9 million) a year earlier.
Holiday firms traditionally post losses over the quieter winter months.
Read more here
Experian results boost shares, Keller and Hunting surge in FTSE 250
10:28 , Graeme Evans
Data and technology firm Experian today surged 9% or 300p to 3770p after its annual results showed a strong final quarter of the year.
Revenues at the top end of guidance and the delivery of full-year underlying profit up 7% to $1.9 billion (£1.5 billion) came as Experian’s credit tools helped more households to navigate cost-of-living challenges.
The group, which employs 22,500 people in 32 countries, also pleased the City with its guidance for underlying revenues growth of 6-8% in the current year.
Hargreaves Lansdown analyst Matt Britzman said: “AI is already being integrated into products, and there’s plenty of scope to do more.
“The valuation isn’t cheap, but you’re paying for quality with Experian. That’s more than justified given the combination of sector-leading returns and growth opportunities on the horizon.”
The £32 billion-valued Experian helped to power the FTSE 100 to a record of 8474 before the blue-chip index settled 34.30 points higher at 8462.43.
Other strong performers included mobile phone giant Vodafone, which continued its improvement in the wake of yesterday’s annual results.
The shares rallied another 4% or 3.3p to 76.6p, taking the past month’s rise to 14% amid early signs of turnaround progress by boss Margherita Della Valle.
On the fallers board, Ocado gave up a large chunk of yesterday’s rebound as shares fell 5% or 20.1p to 349.7p. It was a difficult session elsewhere in the retail sector after B&M European Value Retail lost 3% and Tesco dipped 1.9p to 312p.
The FTSE 250 index improved 85.17 points to 20,703.69, led by oil field services group Hunting as a record $145 million (£115 million) order with the Kuwait Oil Company helped send shares up 23% or 85p to 457.5p.
Keller was the next best mid-cap stock, up 16% or 180p to 1316p after the ground engineering firm said a strong order book and recent contract wins meant full-year results should be materially ahead of original forecasts.
Plenish juices and milks boost Britvic results
09:59 , Daniel O’Boyle
A “truly outstanding” performance from Plenish plant-based milks and cold-pressed juices helped Britvic report profits of £78.2 million, up 13%, in the six months to March.
Sales grew by 11% to £880 million for the business behind Robinsons and Tango. Revenue from “new growth spaces” easily beat Britvic’s targets, growing by more than 60%, thanks mostly to the performance of Plenish.
The business said: “Plenish has had a truly outstanding half, with revenue up 168.5%, demonstrating Britvic’s acceleration of an already powerful consumer brand. Our product innovation team successfully completed at the start of the year the extremely technically challenging creation of a Barista range of Plenish organic plant-based milks, developing the only range in the UK free from oils and gums, while still offering creaminess, foam, and flavour.”
Britvic sold 1.2 billion litres of drinks during the half-year.
Caterer Compass hails return of Monday office work
08:44 , Daniel O’Boyle
Catering group Compass hailed the return of office workers on Monday as it upped its guidance after profits grew by 20% in the six months to 31 March.
Revenue topped $20 billion (£16 billion), with the strongest growth coming from its office canteens arm, which brought in $7.7 billion, thanks to “the continued return to office trend”.
CFO Petro Parras said much of the growth came on Mondays, with levels of activity on the first day of the working week now similar to Thursdays. Transaction volume is still significantly lower on Fridays, but Compass noted that those who did some in were spending more, suggesting a rise in Friday office workers treating themselves.
The business raised its guidance for underlying profit growth to 15%, from 13.5%.
However, that wasn’t enough to please the market, as shares slid by 3% to 2248p.
Raspberry Pi confirms plans to list on the London Stock Exchange
08:39 , Simon Hunt
Computer maker Raspberry Pi has confirmed its intentions for an IPO in London in a much-needed boost to the capital’s stock exchange.
The British business, which makes small single-board computers, said it hopes to use funds raised to invest in its sales arm to take products into more markets as well as build market share in design consultancy. It said it had a current total addressable market of approximately $21.2 billion, “reflecting a substantial opportunity for it to capitalise on and sustain its strong growth trajectory.”
Raspberry Pi is thought to be seeking a valuation of £500 million in a float.
The company was initially founded as a charity in 2012 aimed at promoting computer science in schools, before setting up a commercial subsidiary to cater to growing demand. The charitable arm will remain a shareholder in the listed business, Raspberry Pi said.
The firm reported revenues were $266 million in 2023, with gross profit of $66 million, and operating profit of $38 million.
CEO Eben Upton said: “A remarkable ecosystem of individuals and businesses has grown around Raspberry Pi, supporting both the enthusiast and industrial markets to innovate and succeed with our products.
“In an ever more connected world, the market for Raspberry Pi’s high-performance, low-cost computing platforms continues to expand. We have the technology roadmap to play an increasingly significant role, and we are excited to embark on the next stage of our growth.”
Read more here
Experian leads FTSE 100 to new record, Burberry and Compass shares fall
08:23 , Graeme Evans
The FTSE 100 index touched a new record of 8474 in early dealings today, with data and technology business Experian the best performing stock.
Experian jumped 8% or 267p to 3737p after it reported annual results at the top end of expectations and forecast revenue growth of 6-8% for this year.
Imperial Brands also rose 2% or 29.5p to 1908p thanks to half-year figures in line with expectations.
However, Burberry shares remain under pressure after its warning in annual results that the current half year period will be challenging.
The luxury goods group declined 3% or 41.5p to 1147p, just ahead of Compass Group as the caterer weakened 52p at 2269p on the back of half-year figures.
The FTSE 100 index later settled 41.30 points higher at 8469.26, with the FTSE 250 index up 61.30 points at 20,679.82.
Burberry revenue kept warm by coats and scarves as Asian markets cool
08:00 , Michael Hunter
Burberry trench coats and scarves were among the lines that helped the world-famous London fashion house deal with what it called a “challenging” year.
Revenue was flat at constant exchange rates at around £3 billion, with reported operating profit down by around a third to £418 million.
Jonathan Akeroyd, chief executive officer, said: “Executing our plan against a backdrop of slowing luxury demand has been challenging.
“While our FY24 financial results underperformed our original expectations, we have made good progress refocusing our brand image, evolving our product and strengthening distribution while delivering operational improvements. We are using what we have learned over the past year to finetune our approach.”
Known for its check pattern, Burberry highlights its London heritage with style-conscious big spenders. One of its best-known trenchcoats is called Waterloo and sells for £1,890. Its cashmere scarves cost £420.
Burberry said its outerwear range had a “strong performance”, with sales up “by a high single digit percentage … led by Heritage rainwear”.
It added that “scarves grew by a double digit percentage”.
Asia has become one of the the Bond Street giant’s most important markets, especially China. It said today that sales on the mainland were up 2% for the full year, but down 19% in the fourth quarter,
In South Korea, sales were down 8% in the year and fell 17% in the fourth quarter.
Japan fared better, with sales up by a quarter in the year and almost a fifth in the fourth quarter.
FTSE 100 set for new record, US stocks rally ahead of inflation reading
07:19 , Graeme Evans
The FTSE 100 index is set for another all-time high after US markets rose on hopes that today’s inflation reading will improve the interest rate outlook.
Economists expect the headline rate for April to have dropped by one-tenth to 3.4% and core inflation to come in about two-tenths lower at 3.6%.
The S&P 500 index closed 0.5% higher ahead of the reading, even though figures on Tuesday showed factory gate prices rose more than expected.
Comments by Federal Reserve chair Jerome Powell calling for patience as restrictive monetary policy does it work also failed to dent risk appetite.
The FTSE 100 index finished yesterday’s session 0.2% higher and is forecast by IG Index to open this morning about 0.5% or 44 points higher at a record 8472.
Recap: Yesterday’s top stories
06:51 , Simon Hunt
Good morning from the Standard City desk.
The FTSE 100 returned to making gains on Tuesday but finished just short of a record close price.
The index’s soaring increases from last week have mellowed significantly but trading was still positive despite concerns over stubborn UK wage inflation data from the Office for National Statistics.
London’s top index finished 13.14 points, or 0.16%, higher to end the day at 8,428.13.
The German Dax index was down 0.09% at the close and the Cac 40 in France ended up 0.2%.
Sterling started in weak fashion on the back of the rise in unemployment and suggestions from the Bank of England’s Huw Pill that it is “not unreasonable” to expect the Bank to consider cutting interest rates over the summer.
However, it swung higher after the weakness in the dollar caused by an unexpected rise in US producer prices.
The pound was up 0.22% at 1.258 US dollars and was flat at 1.163 euros at market close in London.
Here’s a summary of our top headlines from yesterday:
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