- Blue-chip index up 27 points at 7,875
- Rentokil dips following results
- easyJet bolstered following trading update
4.03: IAG leads FTSE 100 higher
British Airways-owner International Consolidated Airlines Group SA (LSE:IAG) led Thursday’s risers as the FTSE 100 approached late trading in positive territory.
Come the afternoon, London’s blue-chip index was up 27 points at 7,875.
IAG had been buoyed by positive comments on transatlantic travel demand from US-rivals earlier this week, while UK-based easyJet PLC also highlighted strong summer demand on Thursday.
This sent shares in the low-cost carrier up 2.5%, seeing it among the day’s big risers.
Rentokil Initial PLC (LSE:RTO) slipped in the meantime, falling 5.6% and leading the FTSE 100’s fallers, after seemingly underwhelming with a first quarter update earlier in the day.
3.49pm: Co-op Bank, Coventry Building Society agree takeover
Coventry Building Society has confirmed an agreement to buy The Co-operative Bank PLC for £780 million.
The combined group would have a pro forma balance sheet of £89 billion, Coventry said in a statement, with the acquisition expected to take years to complete.
“This is an exciting moment for the society,” Coventry chief executive Steve Hughs commented.
“The Co-operative Bank is a financially stable, profitable organisation with a shared heritage and products and services that complement our own.
3.29pm: Dow Jones climbs in positive start on Wall Street
The Dow Jones led the way with gains of 214 points on Thursday morning as Wall Street marked a positive start to the day.
The S&P 500 added 13 points while the Nasdaq just edged into the green with a one-point gain.
US economic strength was once again on display early on Thursday, as weekly jobless claims data remained unchanged at 212,000.
This was slightly stronger than expected, according to Validus Risk Management’s Ryan Brandham.
“This series continues to track at a strong level, with data continuing to demonstrate the strength of the US labour market and giving the Fed reason to be very patient in considering the timing of any rate cuts in 2024,” he said.
Among companies, Genuine Parts Company (NYSE:GPC) skyrocketed 11% in early trading after boosting earnings guidance in a first-quarter update.
Las Vegas Sands Corp (NYSE:LVS)’s first quarter update seemingly failed to please investors in the meantime, sending the shares down 7% to top the day’s biggest fallers.
2.37pm: Royal Mail parent sees target hiked on prospective takeover
Deutsche Bank analysts have upgraded Royal Mail owner International Distributions Services PLC (LSE:IDS) after news broke on Wednesday of a potential takeover.
IDS was bumped up from a ‘sell’ to ‘hold’ as Deutsche also lifted the delivery firm’s share price target from 160p to 268p.
West Ham co-owner Daniel Křetínský’s bid to buy embattled IDS emerged on Wednesday, with the Czech energy tycoon already holding 27.5% of the company.
Though this initial offer, made earlier this month, was rejected, Křetínský’s EP Group was said to be readying further bids.
Deutsche added Křetínský now had until May 12 under UK takeover rules to announce a firm intention to bid on IDS.
IDS shares slipped 2.5% to 269.20p, after having soared on Wednesday… Read more
1.21pm: European EV demand sinks
Sales of electric vehicles (EVs) sank across Europe last month, the European Automobile Manufacturers’ Association (ACEA) has reported.
Registrations of new battery-electric cars fell 11.3% to 134,397 units year on year in March, the group said, meaning the vehicles’ market share shrank from 13.9% to 13%.
EVs accounted for 14.6% of Europe’s car sales last year, with Volkswagen Group (XETRA:VOW), Tesla Inc (NASDAQ:TSLA) and Mercedes all reporting a dip in demand for such models over the first quarter.
Overall, new car sales were down 5.2% on a year earlier in March, as the early Easter holiday hit demand across Europe, according to ACEA.
Sales fell in all of Europe’s four largest economies, the group added, with registrations of electric vehicles declining by as much as 28.9% in Germany.
1.01pm: Small-cap Chill Brands up 5% amid shareholder revolt
Shares in Chill Brands were 6% higher in early afternoon trading after it became the unexpected target of an activist shareholder.
After hours on Wednesday, the Vape and CBD products revealed its largest shareholder wants to unseat two senior members of the board.
Jonathan Swann, who holds a 13.45% stake in the London-listed group, has lodged a letter requisitioning a meeting to oust chief commercial officer Antonio Russo and chief operating officer Trevor Taylor. It is seeking the appointment of Graham Duncan and Aditya Chathli.
Chill said it was “deeply concerned” by the development.
In a statement issued to the London, it added: “The company is taking legal advice as to the validity of the requisitioner’s letter and a further announcement will be made in due course.”
12.44pm: Co-op Bank on brink of merger with Coventry Building Society
The Co-operative Bank is set to announce its takeover by Coventry Building Society as early as this week, according to Sky News.
An agreement on the £780 million takeover could be unveiled on Thursday, reports said, after over three months of exclusive talks between the two.
A combination of the two would become increasingly likely with such an announcement, potentially creating an entity with some £90 billion in assets.
The pair would collectively cater to around five million customers, with Co-op having struggled in recent years, requiring bailouts by investors in 2013 and 2017.
12.12pm: Strong start seen on Wall Street
Futures trading had the Dow Jones up 103 points at 38,094 ahead of Thursday’s opening bell.
The Nasdaq and S&P 500 were up 54 and 13 points respectively at 5,075 and 17,713 in the meantime.
NVIDIA Corp (NASDAQ:NVDA, ETR:NVD) was among those rising, by 1% in pre-market trading, after chipmaking rival Taiwan Semiconductor Manufacturing Co reported expectation-beating first-quarter profits.
Taiwan Semiconductor has recently been “viewed as a key barometer of AI chip demand,” Scope Markets analyst Joshua Mahony said.
“There is a hope that the likes of Nvidia and Arm Holdings will see the buyers step in once again on the hope that we will see a similarly upbeat tone when they report in the coming weeks.”
Arm Holdings was up 0.3% ahead of the markets’ open on the news.
Among losers, Tesla Inc (NASDAQ:TSLA) (Tesla Inc (NASDAQ:TSLA)) fell 1.7% in pre-market deals after news broke that 300 temporary workers from its German plant had been let go as part of plans to cut staff globally.
11.44am: British Airways boosted by transatlantic demand outlook
Shares in British Airways owner International Consolidated Airlines Group SA (LSE:IAG) took off on Thursday after US-based rivals signalled a positive outlook for transatlantic demand.
United Airlines Holdings Inc (NASDAQ:UAL, ETR:UAL1) said on Wednesday that it expected to see strong demand over the summer, fuelling a record for passenger numbers this year.
“On demand, we see continued positive momentum in bookings across all customer segments,” chief executive Scott Kirby said.
“[This includes] the most price-sensitive customers to ‘domestic road warriors’ and up to the premium global customer.”
United forecast per-share earnings to exceed analysts’ expectations over the first quarter, despite being pushed to a US$164 million loss last year by forced groundings of its Boeing 737 MAX 9s after January’s Alaska Air door panel blowout.
“Current results are very strong, but the future is even brighter,” chief financial officer Michael Leskinen commented.
Delta Air Lines had also highlighted improving transatlantic travel trends in an update last week.
Stifel analysts noted on Wednesday that IAG’s upcoming results, on May 10, would likely highlight similar trends for transatlantic travel, alongside circling around summer demand.
IAG shares climbed 4% to 167.15p.
11.09am: New BP boss reshuffles boardroom
BP PLC (LSE:BP.) has announced its board of directors will be cut from 11 positions to 10 in order to simplify the business.
Corporate and solutions head William Lin will lead BP’s gas and low-carbon division, as the former is integrated into its businesses and functions wing.
He will replace Anja-Isabel Dotzenrath, who is retiring as head of the low-carbon division.
Leigh-Ann Russell will be replaced by Emeka Emembolu as head of BP’s technology division in the meantime.
“We need to deliver as a simpler, more focused and higher value company,” chief executive Murray Auchincloss commented.
“These changes will help us do just that, reducing complexity within BP, allowing our team to focus on delivering our priorities and growing the value of BP.”
10.26am: Ferrexpo results mixed – analysts
Ferrexpo PLC (LSE:FXPO)’s full-year results were a mixed bag, according to Liberum analysts, as revenue beat estimates but pre-tax earnings missed.
Iron-ore pellet producer Ferrexpo recorded an US$85 million pre-tax loss for the year to December on Thursday, against a US$220 million profit last year.
This was largely due to Ferrexpo’s US$131 million provision to cover “any possible negative outcome” from two ongoing legal cases.
“Ferrexpo continues to believe that these cases are without merit,” Liberum highlighted in a note, where it reiterated a ‘buy’ rating and 220p share price target.
“We do believe that it would be very politically sensitive if punitive fines were made against Ferrexpo, impacting institutional investors, when the actual target of the actions is the major shareholder,” Liberum said.
Revenue came in 48% lower at US$652 million, due to logistical constraints and reduced iron ore prices, though Liberum said the figure was ahead of expectations.
According to the bank, news that Ferrexpo had restarted the third of its four pelletiser operations in February was the highlight of the update, reflecting improving European demand.
Logistical challenges seem to be easing while access to export markets improves, Liberum said.
“The previously reported net cash position of $108m leaves a comfortable buffer against further disruption,” the bank added.
Shares were flat at 46.25p on Thursday.
9.58am: FTSE 100 gains altitude as airlines climb
Airlines led risers on the FTSE 100 on Thursday morning, helping the index 33 points higher to 7,881.
easyJet PLC and British Airways owner International Consolidated Airlines Group SA (LSE:IAG) led the way, with respective gains of 3.4% each, after the latter’s positive report early on.
The low-cost carrier had reported narrowing losses and hinted at strong forward bookings for the summer period.
US carriers had also signalled strong demand for the summer earlier this week.
“Consumers still seem to be willing to prioritise travel with the disposable income they have,” AJ Bell analyst Russ Mould said.
National Grid PLC (LSE:NG.) climbed 2.2% after upgrading profit guidance for the year, which also led SSE PLC (LSE:SSE) 1.6% higher.
Rentokil topped the day’s fallers in the meantime, after first-quarter results showing a 4.9% increase in revenue seemed to underwhelm investors.
9.38am: Neumann ramps up efforts to buy back WeWork
Adam Neumann has reportedly ramped up efforts to re-buy the office-sharing company he founded, WeWork.
WeWork has said it will work to beat any offers by the former boss by 10%, however, according to the Financial Times.
Neumann had led the company to a US$47 billion valuation before being ousted in 2019 as expansion plans came at the expense of profits.
WeWork then filed for bankruptcy last year, as the wide-scale move to remote working during the pandemic also took its toll.
According to Reuters-cited sources, it was unclear how Neumann would finance his roughly US$500 million bid.
WeWork is said to need around US$400 million to emerge from bankruptcy as planned later this year.
“We are committed to emerging from Chapter 11 next month as a strong and sustainable company, and that is where our undivided attention lies,” a WeWork spokesperson said.
“Any new financial investment would serve to further strengthen the company as we exit from bankruptcy.”
9.13pm: National Grid jumps on profit upgrade
National Grid PLC (LSE:NG.) climbed over 2% on Thursday after lifting underlying earnings per share guidance.
Earnings per share should sit in line with last year’s figure of 69.7p, the grid operator said, rather than “modestly below”, as previously guided.
This comes due to an accounting change after tax reliefs were offered to firms in this year’s Spring Budget.
“To represent underlying profitability more accurately, and to align with UK peers, we will now report Underlying Earnings and underlying EPS excluding the impact of deferred tax,” National Grid explained.
The move will prompt an “expected” 8p per share boost to underlying earnings, bringing the figure in line with last year, with this up 7% on 2022.
Shares climbed 2.5% to 1,038p on the news.
8.55am: The morning so far
The stock market got off on the right foot this morning, with the FTSE 100 surging around 44 points in opening trades.
Recently reinstated FTSE 100 member easyJet shot to the top of the movers list following an interim trading update, with shares soaring around 4%.
“easyJet has made measurable progress in reducing its seasonal and traditional winter losses and is now well set for a busy and profitable summer period,” was Richard Hunter, head of markets at interactive investor’s take on the update.
BA owner IAG joined the party by also adding around 4%, perhaps bolstered by this optimistic outlook for air travel.
Other top morning risers included Standard Chartered and National Grid.
Rentokil offset some of this morning’s bullishness by dipping over 4.5% following the FTSE 100-listed pest controller’s first-quarter results.
Revenues were up 4.9% in the first quarter, or 3.1% on an organic basis when stripping out the impact of acquisitions including HiCare in India.
Chief executive Andy Ransom called it “a positive overall start to 2024”, but shareholders were less convinced.
BAE System, UNITE Group and Croda were also among the biggest blue-chip fallers.
Among the mid caps, Deliveroo bounced 6.5% higher after declaring gross transaction value (GTV) was up 6% year on year at constant-currency rates in the first quarter.
Hipgnosis song fund rallied over 30% after agreeing to a US$1.4 billion cash takeover offer from Nashville-based music rights owner Concord.
Footsie is currently trading at 7,891.
8.28am: FTSE 100 surges in opening trades
The blue-chip index added 45 points to hit 7,894 in the opening stages of Thursday’s trading session, buoyed by a momentary respite in Middle East tensions.
easyJet and British Airways owner IAG are top of the movers list, while Rentokil is leading the losers list after posting its first-quarter results.
8.22am: Rentokil dips following first-quarter results
Rentokil Initial PLC (LSE:RTO)’s revenues were up 4.9% in the first quarter, or 3.1% on an organic basis when stripping out the impact of acquisitions including HiCare in India.
North American growth “stabilised” in the quarter, the FTSE 100-listed group said, with organic revenues up 1.5% in the region. LATAM, the group’s second-largest market, saw organic revenue growth of 4.1%.
Chief executive Andy Ransom called it “a positive overall start to 2024”.
“The group has performed well and our RIGHT WAY 2 plan has delivered a stabilising performance in North America.
“With the key trading period for the business ahead of us, we remain confident in delivering on our guidance of 2-4% organic revenue growth in the region.”
The market appeared underwhelmed by the results, with shares dipping 3.3% in opening trades.
8.10am: Hipgnosis Songs Fund board agrees takeover offer from Concord
Hipgnosis Songs Fund has agreed to a US$1.4 billion cash takeover offer from Nashville-based music rights owner Concord.
Concord, which owns Fantasy Records and Pulse Records, offered an equivalent of 93.2p per share, representing a premium of around 32% to yesterday’s closing price.
Robert Naylor, chairman of Hipgnosis, said: “The acquisition represents an attractive opportunity for our shareholders to immediately realise their holding at a premium, mitigating the risks we see ahead to achieving a material improvement in the share price.”
Last October, shareholders voted in favour of winding up the fund while also voting to oust former chairman Andrew Sutch.
The fund’s catalogue of royalties, which includes music from Neil Young, Justin Bieber and Mark Ronson, saw its valuation slashed following an independent valuation earlier this year, worsened by an accounting error discovered in March.
Shares soared 30% in opening Thursday trades.
7.50am: Deliveroo UK lags international order growth
Deliveroo PLC (LSE:ROO)’s gross transaction value (GTV) was up 6% year on year at constant-currency rates in the first quarter, with per-order value increasing 4%.
International order growth outstripped the UK and Ireland market, which saw no growth in order volumes compared to 4% growth internationally.
However, the revenue take rate from those orders fell 2% internationally while adding 2% in the UK and Ireland.
Deliveroo has kicked off a £30 million share buyback programme thanks to positive free cash flow.
Founder and chief executive Will Shu said he was “pleased with the start we have made to this year, building on the strong progress in 2023”.
“We made particularly strong progress in International markets during the quarter, with notable improvements in France, UAE and Hong Kong, and continued strength in Italy.
He said the UK and Ireland consumer environment “remains stable but uncertain”.
Full-year guidance was maintained at GTV growth in the range of 5-9% and adjusted earnings in the range of £110-130 million.
7.27am: easyJet losses narrow
easyJet PLC reduced its winter losses by more than £50 million compared to last year due to a 9% year-on-year growth in both ticket yields and 10% growth in extras.
Headline losses before tax are expected to be between £340 and £360 million, per today’s interim trading update.
In the first half of the financial year, easyJet increased its capacity by approximately 8% to accommodate the growing demand at the budget airline, which recently reclaimed its spot as a FTSE 100 constituent.
Looking ahead, easyJet expects third-quarter revenues to be “slightly” up year on year, helped by the Easter peak falling into March.
For the fourth quarter, revenue per seat is anticipated to remain significantly ahead year-on-year, with about 30% of capacity already sold.
Chief executive Johan Lundgren said: “We have further enhanced our network with the launch of new bases in Alicante and Birmingham providing greater choice for consumers across Europe.
“We are well set up operationally for this summer season where we expect easyJet to be one of the fastest growing major airlines in Europe and take more customers on easyJet holidays than ever before.”
He noted that the onset of the conflict in the Middle East “resulted in a pause in flights to Israel and Jordan and a temporary slowdown in flight bookings for the wider industry”.
7.12am: Blue-chip index to add 35 points
The FTSE 100 is expected to open higher today after finishing up 28 points higher at 7,848 on Wednesday.
Despite trading in the red for a large chunk of the session, the blue-chip index recovered thanks to a strong showing for mining stocks including Anglo American, Fresnillo, Antofagasta and Rio Tinto.
A momentary respite in knife-edge tensions between Iran and Israel appears to be bolstering market sentiment for now.
Without any major announcements on the macroeconomic calendar this morning, attention turns to trading updates from the likes of wealth platform AJ Bell, homewares retailer Dunelm and Rentokil, plus an interim earnings report from easyJet.
Futures contracts have the FTSE 100 adding 35 points to 7,892.
