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FTSE 100 Live 29 February: Bank of England appoints Clare Lombardelli to Deputy Governor, Ocado in £400 million loss

FTSE 100 Live (Evening Standard)
FTSE 100 Live (Evening Standard)

Another big Ocado loss and the pandemic recovery of airline operator IAG are in focus during a packed session for corporate results.

Other blue-chip companies reporting today include consumer healthcare business Haleon and London Stock Exchange.

Traders are also watching cryptocurrency developments after the Bitcoin price topped $62,000.

FTSE 100 Live Thursday

  • IAG profits beat pre-Covid level

  • Bank of England appoints new deputy governor

  • Ocado posts £400m loss

FTSE 100 clings to positive territory, ticking up from two-week low; Sainsbury lower after job cut news

Thursday 29 February 2024 16:50 , Michael Hunter

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London’s main stock index was higher in closing trade, bouncing up from the two-week lows plumbed over the previous session, but off its best levels of the day.

The gains came after well-received updates and earnings news from Haleon, the consumer healthcare giant, and Howden Joinery which took the top two slots on the leaderboard.

The maker of Sensodyne toothpaste pointed to an increased dividend and £500 million share buyback after it cut debt, sending its shares up 6% to 333p, a rise of 19p.

But it was edged out of first place by the UK’s biggest kitchen supplier, which added 7.5% to 830p, a gain of 58p.

Overall, the FTSE 100 ticked up 5 points to 7629.62 in closing exchanges.

Sainsbury, the supermarket chain fell 1.4% to 251p after it announced more details on plans to cut 1,500 jobs. They will go at in-store bakeries, its call centre in Widnes and at some distribution centres.

Howden Joinery tops FTSE 100 after it sticks by its outlook for the year

Thursday 29 February 2024 15:19 , Michael Hunter

Shares in FTSE 100 kitchens and building products group Howden Joinery were nailed on to the top of the index’s leaderboard in afternoon trade after it stuck by its full-year guidance for 2024.

It also said it had made a strong start to the year, assuaging concerns that a the slowdown in the housing market might have darkened the outlook for the £4.2 billion company.

Andrew Livingstone, CEO of the 800-outlet chain, said: “"Our established markets for kitchens and joinery in the UK are now estimated to be around £12 billion and we continue to seek further opportunities in adjacent markets.”

The upbeat outlook came as Howdens filed profit before tax of £328 million, down by almost a fifth from 2022, but up a quarter from 2019’s level.

The stock added 55p in afternoon trade to 828p, a rise of over 7%.

New York's S&P 500 higher with inflation and jobs numbers pointing to Fed rate cut

Thursday 29 February 2024 14:44 , Michael Hunter

Wall Street’s main stock index rose in opening trade, as inflation and jobs numbers looked supportive of hopes for an interest rate cut.

The inflation measure most closely watched by Federal Reserve policymaker, the core personal expenditures index, hit forecasts with a 0.3% rise in January.

Then, initial jobless claims for the week ended February 24 came in at 215,000, deepening an impression that the economic conditions for action from the central bank were in place.

That helped offset pressure from some lacklustre earnings news in the tech and entertainment sectors.

Overall, the S&P 500 added just over 22 points to 5019.8.

US stocks rise on inflation data

Thursday 29 February 2024 14:16 , Simon Hunt

US stocks looks set to make gains after the opening bell on Wall Street this afternoon, after inflation data raised hopes of faster rate cuts by the Federal Reserve.

The Fed’s preferred gauge of inflation, known as the core personal consumption expenditures price index, rose at its fastest pace in nearly a year in January, but came in broadly in line with analyst expectations, adding confidence that inflation was cooling.

The S&P 500 index rose 0.3% in pre-market trading.

Lunchtime update: Ocado not as good as it seems

Thursday 29 February 2024 13:15 , Simon Hunt

Shares in Ocado rose as much as 10% as markets opened this morning -- they’ve now fallen right back down again.

A note from analysts at Peel Hunt may have something to do with it.

The firm said a downgrade in Ocado’s profitability was expected in the coming year.

They said: “Having spoken to the company and done some back-of-the-envelope maths, we believe consensus EBITDA...could reduce from £160 million today to £110-115 million, a 30% downgrade.” Peel Hunt put this down to “continued issues at an online supermarket retailer that is heavily tied to macroeconomic conditions.”

Here’s a look at the key market data this afternoon:

Iceland seeks to nab Ocado market share as it hires 250 more delivery drivers

Thursday 29 February 2024 11:04 , Simon Hunt

Iceland is embarking on a major expansion in its food delivery business, the Standard can reveal today, as the low-cost supermarket gears up for a surge in demand in the run up to Easter.

The Deeside-based business is poised to recruit an extra 250 delivery drivers as it seeks to claw market share from rivals by attracting customers on squeezed incomes with free delivery, for which Ocado charges as much as £7.

Helen Tindle, HR Director at Iceland Foods & The Food Warehouse, told the Standard: "We are currently recruiting for over 250 Home Delivery Driver roles across Iceland and The Food Warehouse, as we prepare for the busy Easter trading period.”

Haleon rallies in steady FTSE 100, Serco surges in FTSE 250

Thursday 29 February 2024 10:35 , Graeme Evans

Haleon surged 8% or 26p to 339.95p as the former GSK firm said its balance sheet is healthy enough to support an increased dividend and £500 million buy back of shares.

The company behind brands including Sensodyne, Centrum and Voltaren said it had cut its debt pile by £2 billion to £8.5 billion since the demerger from GSK 18 months ago.

It also reported a 9.4% rise in 2023 operating profits to £2 billion as underlying revenues surged 6% in the final quarter of the year.

Haleon was accompanied at the top of the FTSE 100 by kitchens supplier Howden Joinery, which lifted 59.2p to 831.8p following reassuring annual results.

The 19% fall in annual profits to £327.6 million was broadly in line with City expectations, with sentiment further boosted by an “encouraging start” to 2024 trading.

The FTSE 100 index improved after yesterday’s sell-off to stand 14.93 point higher at 7639.91.

Among the fallers, Barclays lost 6.4p to 162.4p after its shares were marked ex-dividend and the mining industry engineering firm Weir retreated 55p to 1821.5p following annual results.

The FTSE 250 index improved 56.74 points to 19,070.32, with outsourcing firm Serco up 11.2p to 190.4p after announcing a £140 million buyback alongside unchanged guidance for this year.

Bank of England appoints Clare Lombardelli to Deputy Governor role

Thursday 29 February 2024 10:11 , Simon Hunt

Clare Lombardelli has been appointed the new Deputy Governor, the Bank of England has announced.

The Chief Economist at the OECD and former Chief Economic Advisor to the Treasury and joint head of the Government Economic Service, Clare will be responsible for overseeing the formulation and implementation of UK monetary policy and will lead the Bank’s research, data and analytics. She has been tipped as a future BoE Governor.

Andrew Bailey, Governor of the Bank of England, said: “I’m really pleased to welcome Clare Lombardelli back to the Bank as Deputy Governor for Monetary Policy. Clare’s impressive career means she brings a huge amount of relevant experience and expertise to the Monetary Policy Committee, and the Bank more broadly, at a time of great importance for the UK economy.

“I would also like to thank Ben Broadbent for his service. He will be missed, and all at the Bank wish him the very best for the future.”

Wincanton shares surge on potential knockout offer from GXO

Thursday 29 February 2024 09:30 , Michael Hunter

The bid battle for London-listed haulage company Wincanton took another turn today, when the identity of the rival suitor and the details of a potential knockout offer for the company emerged.

GXO Logistics is offering 605p per share for the firm, in a deal valuing it at £764 million including debt. It also said the bid was backed by over a third of shareholders.

That is notably higher than with the rival bid from French shipping giant CEVA – priced at 480p and described by Wincanton, which backed it  as  “increased and final” – after CEVA upped its original, 450p per share offer.

Shares in Wincanton, which delivers for Ikea and Waitrose and is almost 100 years old, raced higher to trade above GXO’s price, up 20% to 609p and a new high for the stock.

That is a sign that traders are betting that the bid battle may not be over yet, with eyes out for a response from CEVA.

PPHE poised to benefit from Paris Olympics hospitality boom

Thursday 29 February 2024 09:20 , Simon Hunt

London is poised to welcome thousands of extra tourists over the summer as the capital becomes an ancillary hospitality hub for the nearby Paris Olympics.

Park Plaza hotel operator PPHE, which opened a new hotel at London’s iconic Battersea Power Station last year and is set to open another new site in the capital in Hoxton, said it had already seen a boost during the French Rugby World Cup last year.

Co-CEO Greg Hegarty told the Standard: “You had tour groups who came to London and then hopped on the Eurostar to go and see a match so we already saw a positive impact then.”

Park Plaza today reported bumper results with revenues up by a quarter to £415 million and occupancy jumping to 72%. It upped its dividend to 20p.

PPHE shares were broadly unchanged after markets opened.

Bitcoin rises, Haleon surges

Thursday 29 February 2024 09:02 , Simon Hunt

Bitcoin is up another 2% today taking the cryptocurrency above $62,000. It was as low as $42,000 earlier this month.

An hour into the day’s trading session in London, consumer business Haleon is leading the FTSE 100, up 9%, while Ocado has risen 4%.

Here’s a look at your key market data.

Profits tumble at Schroders but assets keep growing

Thursday 29 February 2024 08:59 , Simon English

Schroders profits slumped by £100 million to £487 million in what CEO Peter Harrison calls “one of the most challenging years for global active asset managers in recent times”.

The venerable asset manager, part of the City since 1800, saw funds under management rise from £737 billion to £750 billion, a better result than rivals can offer in turbulent times for markets.

Schroders’ wealth management arm in particular is on the up. A final dividend of 15p a share will be paid taking the total to the year to 21.5p.

Peter Harrison, Group Chief Executive, said:

"In one of the most challenging years for global active asset managers in recent times, our resilient performance in 2023 demonstrated the consistent execution and benefits of our long-term strategy for clients and shareholders.

Looking forward, the markets remain unsettled because of geopolitical uncertainty in a year of electoral change. Whilst our profits last year were impacted by headwinds in the markets and adverse foreign exchange rates, we took steps to pro-actively manage our cost base and delivered efficiency initiatives to enable future reinvestment in the business. We therefore start this year in a strong position to capitalise on some interesting market opportunities, with the prospect of interest rates falling and the rotation of clients' assets back into risk assets."

Schroders shares rose 6p to 391p.

FTSE 100 higher as Ocado and Haleon impress, LSE shares lower

Thursday 29 February 2024 08:41 , Graeme Evans

The FTSE 100 index is 16.18 points higher at 7641.16, with Ocado up 6% or 31.2p to 521.9p after the M&S retail partner narrowed its annual loss to £403 million.

Haleon also performed well, up 7% or 23.05p to 337p after announcing plans for a £500 million shares buy-back alongside full-year results.

Other strong results-day performers included kitchens supplier Howden Joinery, which jumped 48.1p to 820.7p.

The fallers board included a decline of 3% for Barclays, off 5.1p to 163.8p after shares were marked ex-dividend. Weir Group also lost 55p to 1821.5p and London Stock Exchange fell 186p to 8726p after their annual results.

The FTSE 250 index improved 39.63 points to 19,053.21, with annual results by power generation business Drax leaving its shares 25.5p higher at 444.5p.

IAG reports robust demand as profits surge

Thursday 29 February 2024 07:50 , Graeme Evans

British Airways owner IAG today reported a big jump in annual profits and said demand continued to be robust, with particular strength in leisure travel.

The group, which also owns Aer Lingus and Iberia, said it was currently 92% booked for the first quarter and 62% booked for the first half of the year, ahead of its position last year.

IAG plans to grow capacity by about.7% in 2024 as British Airways continues to rebuild to its pre-Covid long-haul capacity and as Iberia targets the growing Latin American market.

Full year operating profit before exceptional items of 3.5 billion euros (£3 billion) was significantly higher than last year’s 1.2 billion and also ahead of 2019’s pre-Covid level.

The operating profit figure for the fourth quarter was 502 million euros (£429.5 million), up from 477 euros the year before.

Chief executive Luis Gallego said: “Our airlines operate in the largest and most attractive markets globally and we will continue to invest in our brands to transform the business, improve the customer experience and support the delivery of sustainable growth and world-class margins.”

Sensodyne and Panadol maker Haleon's profits approach £2 billion and further brand sales could follow

Thursday 29 February 2024 07:45 , Michael Hunter

Haleon, the consumer goods giant spun out of fellow multinational GSK, reported operating profit of almost £2 billion today.

It also said separation costs were “significantly lower” and debt was falling and that it would continue to consider selling off some famous brands

Operating profit for 2023 rose by over 9% to £1.996 billion, from revenue of £1.3 billion, up over 4%. It said 58% of its businesses increases market share.

Brian McNamara, CEO, said: “Within 18 months of our demerger, we reduced net debt by over £2 billion .

“We will continue to actively manage our portfolio, with the agreement to dispose of ChapStick and Lamisil two examples, simplifying the business and increasing focus on our higher growth brands.”

Ocado posts another £400 million loss, guides single-digit revenue growth in 2024

Thursday 29 February 2024 07:37 , Simon Hunt

Supermarket delivery business Ocado posted another £400 million loss for the year to December 2023 as squeezed consumers shrunk their shopping baskets.

Revenue for the year closed up 9.9% to £2.8 billion, led by a 44% jump in turnover in its technology consulting arm and with retail revenue up 7%.

The firm said it saw a “reduction in items per shopping basket as consumers responded to the impact of high inflation on their cost of living.”

Average basket value increased +2.7%., which was offset by a smaller number of items per basket which declined by 4.5% to 44 items.

“Revenue growth is likely to be impacted by lower growth in [average selling prices] as we invest in value and as food price inflation continues to subside.”

It guided mid-single digit revenue growth for its retail arm in 2024.

Ocado said prices rose 5.4% on average year-on-year across its products in the three months to November 26 (Ocado/PA) (PA Media)
Ocado said prices rose 5.4% on average year-on-year across its products in the three months to November 26 (Ocado/PA) (PA Media)

FTSE 100 seen higher as Asia markets improve, Bitcoin rally continues

Thursday 29 February 2024 07:12 , Graeme Evans

The FTSE 100 index is set for an improved session after yesterday’s underperformance, when poorly-received results contributed to a 0.8% decline.

According to IG Index, futures markets are pointing to a 0.2% rise at near to 7640 following a steady handover from US and Asia markets.

The S&P 500 index declined 0.2% as traders remained on the sideline ahead of today’s release of the Federal Reserve’s preferred measure of inflation.

The Shanghai Composite recovered from the previous day’s property-led sell-off to stand almost 2% higher, while the Hang Seng index lifted 0.4%.

Meanwhile, Bitcoin’s momentum has continued as the cryptocurrency this morning topped $63,000 for the first time since November 2021. It was $42,000 earlier this month.

Recap: Yesterday's top stories

Thursday 29 February 2024 06:49 , Simon Hunt

Good morning from the Standard City desk.

Yesterday marked four years to the day since the first British death from the frightening coronavirus illness that was beginning to sweep around the world in early 2020.Fortunately the pandemic itself and the disruption that went with it is fast disappearing in the rear view mirror of history.

But the legacy of that period is still very much with us, not least for the UK business community. Taxpayer-backed Covid loans, knowns as CBILS, were just one part of the support measures developed at speed by then chancellor Rishi Sunak and his Treasury team to save untold thousands of businesses from insolvency as lockdowns starved them of income.

But what was then a lifeline has  become a noose for many of those companies still struggling to pay off CBILS as interest payments mount. At the time the loans were handed out, the Bank of England had slashed its interest rates to an emergency level of 0.1%. In any case there was no interest to pay in the first year.

But those days have long gone. Most borrowers are on a substantial margin over the Bank rate, in some cases as much as 3.99%.That means paying an interest rate at well over 9%. For a business taking out the maximum £5 million loan that is an extra £462,000 in interest to find each year at a time when the economy is still stuttering.

Latest government data shows that as of 30 June last year less than a third of the £25.86 billion of CBILs that were drawn during the pandemic have been repaid. Just under two thirds of borrowers were repaying on schedule while around 6% were either in default, arrears or settled under the Government guarantee underwriting 80% of the loans.

But that was eight months ago and rates have gone up and stayed up since then. It is likely to be another three months, at best, before the first downward tweak. Between now and then lurk hikes in business rates and the 10% rise in the living wage.

None of it is good news and for too many firms who took out CBIL loans, long business Covid is still real threat to their survival.

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