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FTSE 100 Live 18 June: Hargreaves Lansdown surges on new bid, index higher

FTSE 100 Live 18 June: Hargreaves Lansdown surges on new bid, index higher

Premier Inn owner Whitbread and the US-focused plant hire firm Ashtead are in the spotlight during an improved session for the FTSE 100.

Whitbread’s update for the three months to 31 May showed a stronger UK performance but with demand for weekend trips to London slowing.

Sunbelt owner Ashtead reported annual profits of around £3.9 billion after benefiting from demand linked to US mega projects.

FTSE 100 Live Tuesday

  • Ashtead powered by mega US projects

  • Whitbread in London slowdown

  • XP Power bidder walks away

Hargreaves Lansdown shares siurge on new bid

Tuesday 18 June 2024 14:00 , Daniel O'Boyle

Hargreaves Lansdown shares have surged after the business confirmed that it will engage with a bid from a group led by private equity giant CVC.

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The funds giant said it received an 1140p-per-share bid, which would value the business at almost £5.5 billion.

The shares are up 4.4% today to 1,120.06p.

Never mind the politics. The Bank of England must cut interest rates now to save the economy

Tuesday 18 June 2024 13:01 , Daniel O'Boyle

In monetary policy there is an important tool known as the Taylor Rule. Named after the Stanford economist John B. Taylor, it helps central banks decide on what interest rates should be in order to control inflation. Despite the significance of the Taylor Rule in monetary policy, the policymakers at the Bank of England will perhaps be paying more attention to Taylor Swift.

That is according to analysts at TD Securities who have forecasted that the London leg of Swift’s Eras Tour could increase services inflation by 0.3%. As such, the Monetary Policy Committee is likely not to vote to lower Bank Rate this summer and instead wait until September. And it’s not just Taylor Swift who analysts think might delay a cut to interest rates. The fact that the UK is in the middle of a General Election has led to speculation that the Bank will hold off lowering rates so as not to be seen to be helping out the government by eating pressure of household finances.

Read more here

Atom bank says UK ‘dominated’ by major lenders, as it cheers record profits

Tuesday 18 June 2024 12:14 , Daniel O'Boyle

Atom bank has criticised the dominance of large UK lenders who provide “indifferent” customer service, as the app-based bank cheered a record year of profits.

The digital bank, which offers savings accounts, mortgages and loans, revealed it made an operating profit of £27 million for the year to the end of March.

This was about seven times higher than the previous year.

Read more here

Inflation set to hit Bank of England's 2% target, but MPC not expected to cut interest rates

Tuesday 18 June 2024 11:21 , Daniel O'Boyle

Inflation is set to hit the Bank of England’s 2% target when official figures for May are released tomorrow, but it is not likely to be enough to make the Bank of England cut interest rates this week, City economists say.

According to a survey of economists for data provider Refinitiv, inflation is set to fall to exactly 2% when May figures are published tomorrow.

That would bring the rate of price rises back to the Bank of England’s target figure for the first time since July 2021.

Read more here

Dr Martens and Telecom Plus higher, BT up 1% in FTSE 100

Tuesday 18 June 2024 10:29 , Graeme Evans

Utility Warehouse business Telecom Plus today kept up its strong run in the FTSE 250 index after posting record annual profits.

The company, whose bundled services across broadband, energy, insurance and mobile help households to manage their bills, is targeting customer growth between 12% and 14% this year.

The figure rose 14% to over one million customers in the year to 31 March, a period when a 21% jump in adjusted profits came in slightly ahead of City forecasts at £116.9 million.

The shares rose 19p to 1891p and are up by around 25% in the past three months.

Elsewhere in the FTSE 250 index, bootmaker Dr Martens rebounded 4p to 85.1p and Auction Technology Group added 23p to 588p.

STEM recruitment firm SThree slipped 2p to 420p after its half-year update showed net fees dropped 7% against strong comparatives.

Aided by an “exceptional performance” in Japan, it still remains on track for full-year guidance.

The FTSE 100 index lifted more than 0.5% at one point as hopes of a soft landing for the American economy last night helped the S&P 500 and Nasdaq to fresh records.

London’s top flight later settled 26.95 points higher to 8169.10, with the shares of BT Group and British Airways owner IAG up 1%.

McMullen's sounds alarm on surge in costs facing pub industry

Tuesday 18 June 2024 09:49 , Simon Hunt

Pub chain McMullen’s has warned of the strain of tax and regulatory burdens facing the hospitality industry after it reported a surge in labour costs.

The Hertfordshire-based brewery and pub chain, which runs several iconic pubs in central London including the Old Bank of England in Fleet Street and Traitors Gate in Tower Hill, said it had seen an eye-watering 78% increase in labour costs since 2016 amid a string of successive tax rises and double-digit percentage minimum wage hikes.

The firm, which has over 1400 staff in London and the East of England, added its employer taxes in managed pubs have gone up by nearly 50% since 2019, while business rates had risen 17% with a further 6.7% increase expected in 2024.

Read more here

 (Lock Tavern/McMullen's Brewery & Pubs)
(Lock Tavern/McMullen's Brewery & Pubs)

Shell strikes deal to buy Singapore’s Pavilion Energy

Tuesday 18 June 2024 09:46 , Daniel O'Boyle

Shell has agreed to buy Singapore liquefied natural gas (LNG) trading business Pavilion Energy.

The FTSE 100 oil giant said on Tuesday that it reached a deal, for an undisclosed sum, to buy the firm from state-owned investor Temasek.

The new business has a contracted supply volume of about 6.5 million tonnes per year of LNG, from suppliers including Chevron.

Read more here

Market snapshot: FTSE 100 higher

Tuesday 18 June 2024 09:10 , Daniel O'Boyle

Take a look at our latest market snapshot as the FTSE 100 rises

Whitbread and airline stocks in demand, Ashtead under pressure

Tuesday 18 June 2024 08:37 , Graeme Evans

Whitbread is top of the FTSE 100 index after the Premier Inn owner’s first quarter trading update left shares 4% or 110p higher at 3013p.

The improvement reverses a poor run for the stock, which started the year closer to 3600p.

Ashtead moved the other way, dropping 230p to 5280p despite the plant hire firm reporting record revenue and operating profit in today’s annual results.

The FTSE 100 index rose 0.6% or 52.30 points to 8194.45, with Glencore and the airlines easyJet and IAG up by 2%.

The UK-focused FTSE 250 added 115.88 points to 20,275.60, with the Utility Warehouse business Telecom Plus among the strong performers.

Its annual results boosted shares by 50p to 1925p, taking gains this year to more than 20%.

CuspAI taps 'godfather of AI' Geoffrey Hinton as it raises $30 million

Tuesday 18 June 2024 08:09 , Simon Hunt

CuspAI has recruited the ‘godfather of AI’ Geoffrey Hinton to its advisory board as the climate tech firm raised $30 million in seed funding.

The Cambridge-based business, which makes algorithms for designing new, more efficient materials in a bid to help tackle climate change, said it hoped to develop materials for use in carbon capture and storage, a critical technology for reducing greenhouse gas emissions.

The eight-figure seed funding, an unusually high sum for an early-stage investment round, highlights the huge value investors continue see in artificial intelligence businesses as well as the UK’s success as a major destination for global AI investment. Securing Hinton to the CuspAI board is likely to be viewed as a major coup for the firm with the 76-year-old having become one of the best-known figures in the field after he dramatically quit Google last year.

Read more here

AI ‘godfather’ Geoffrey Hinton (AP)
AI ‘godfather’ Geoffrey Hinton (AP)

Advanced Energy Industries pulls £468 million bid for XP Power

Tuesday 18 June 2024 07:59 , Michael Hunter

US giant Advanced Energy Industries said this morning that it would not be bidding for London-listed XP Power, after the board of the target firm did not engage with the £468 million bid.

AEI said after the 1950p per share approach it “sought to engage with the XP Power board of directors, but the lack of any progress given relative expectations of value has prevented it from accessing due diligence necessary to make a firm offer”.

XP, which makes components used in power conversion in a range of industries, said: “he Board confirms that it has had no contact from Advanced Energy since its indicative proposal was rejected on 13 May 2024.”

Ashtead profits near $5 billion for 2024 powered by US business

Tuesday 18 June 2024 07:49 , Michael Hunter

Profit at FTSE 100 equipment rental giant Ashtead neared $5 billion (£3.9 billion) for 2024, helped by demand from what it called “US mega projects”.

The firm owns Sunbelt Rentals in the US, which now powers the bulk of its revenue, which rose 12% to almost $11 billion for the year to the end of April.

It also pointed to higher executive pay, saying “It is important that our remuneration policies reflect the Group's North American focus and enable us to retain and enhance our strong leadership team.”

Ashtead, names after the Surrey village in which it was founded in 1947, has been listed on the London Stock Exchange since 1986. It bought Sunbelt in 1990, and has been building up its position in the US market ever since via bolt-on acquisitions

Brendan Horgan, chief executive, pointed to “substantial structural growth opportunities” for the US business.

He said: “We are in a position of strength, with the operational flexibility and financial capacity to capitalise on the opportunities arising from these market conditions.”

Weekend trips to London slowing, says Whitbread

Tuesday 18 June 2024 07:34 , Daniel O'Boyle

Weekend trips to London are slowing after a post-pandemic surge, according to Premier Inn owner Whitbread.

Sales were flat at the business in the three months to 31 May. But in London, travel was slower as revenue per available room fell by 5.5% year-on-year.

Whitbread said “While midweek business demand and peak leisure demand remained robust, weekend demand at short-lead was slightly softer, particularly in London, reflecting a return to more normalised levels after what was a very strong performance last year. “

Whitbread has been upping its focus on the hotels arm, which has been outperforming its restaurant brands like Beefeater. Earlier this year it announced 1,500 job cuts as it closed or sold many of its restaurants and converted food space into hotel rooms.

Brent Crude holds at $84 after Monday's rally

Tuesday 18 June 2024 07:23 , Graeme Evans

Brent Crude futures today traded just above $84 a barrel, the highest level since late April after an advance of 2% during yesterday’s session.

The robust demand outlook and speculation that major producers will keep supply tight have triggered the recent rise.

Brent’s rebound comes after the benchmark fell from $90 a barrel in early April to start June near to $77.

FTSE 100 seen higher amid more US records, Australia rates on hold

Tuesday 18 June 2024 07:12 , Graeme Evans

A strong session on Wall Street means the FTSE 100 index is pointing higher after yesterday’s disappointing performance for London’s top flight.

The S&P 500 index rose 0.8% to a fresh record high, driven by gains of 5% for Tesla and 2% for Apple, while the tech-focused Nasdaq put on another 1%.

The Wall Street rally, which also saw the Dow Jones Industrial Average improve 0.5%, came ahead of today’s release of retail sales figures.

The FTSE 100 underperformed yesterday by finishing flat compared with a recovery of 0.9% for the CAC 40 and 0.4% for Frankfurt’s Dax. London’s top flight is forecast to open 42 points higher at 8185 this morning.

Earlier, Australia’s central bank kept its interest rate at 4.35% for the fifth meeting in a row amid concern over the strength of services inflation.

Recap: Yesterday's top headlines

Tuesday 18 June 2024 06:48 , Simon Hunt

Good morning from the Standard City desk.

What is it about Liz Truss and the French?

A few years ago she plunged Anglo-French relations into the deep freeze by saying the jury was out on whether France was Britain’s friend or foe. French officials then looked on with glee when her Chancellor’s September 2022 mini-budget threw British capital markets into chaos.

Now the French financial establishment is asking whether it is in the middle of “un moment Liz Truss” with stocks plunging and bond yields soaring after President Macron’s shock decision to test the electorate’s love for the far-Right with full-scale parliamentary elections.

France will at least be spared a currency crisis — one assumes — as its monetary fortunes are tied to the euro, although if this turns into a full-blown emergency for the eurozone’s second biggest economy then all bets are off.

The slump in French stocks has at least created some rare good headlines for the London stock market, which has regained its status as Europe’s most valuable bourse after two years in second place. Yet this is certainly no time for complacency.

So let us enjoy this moment when London returns to the top of the leaderboard by all means. But let us also not forget it is the crise across the Channel not our own brilliance that has got London back to where it belongs. For now.

~

Here’s a summary of our other top headlines from yesterday: