Housebuilder Berkeley today revealed a 25% fall in the value of underlying sales in the five weeks after the mini-budget.
The brownfield regeneration specialist, which generates the bulk of its earnings in London, also reported a 2% fall in profits to £284.8 million in the six months to 31 October but has stuck by previous full-year guidance of approximately £600 million.
Meanwhile, the Financial Conduct Authority said it had fined Santander UK £107.7 million for repeated anti-money laundering failures between 2013 and 2017.
FTSE 100 Live Friday
Santander fined £108 million by FCA
Primark on track to open 27 new stores
Pendragon takeover pursuit ends
Londoners brace for blockbuster economy week with interest rate hike and inflation data
Friday 9 December 2022 15:21 , Simon Hunt
We will find out if there is hope that inflation may have peaked in the run up to Christmas during a cost-of-living crisis with interest rates poised to go up, and there will also be numbers on joblessness and average earnings.
The Bank of England is top of the bill, with its December announcement on interest rates at high noon on Thursday. A hike is all but certain and will pile pressure on mortgage holders, with policymakers determined to tame double-digit inflation.
Stocks drop after prices rise higher than expected: Wall Street open
Friday 9 December 2022 14:56 , Simon Hunt
Stocks fell in the opening minutes of trade on Wall Street after new data showed November producer prices rose faster than economist predicted. The Nasdaq fell 0.26%, while the Dow Jones fell 0.17%.
The Producer Price Index climbed 0.3% in November, higher than the market consensus of 0.2% according to data collected by Reuters, sparking concerns of a higher interest rate rise by the Federal Reserve.
ING economists James Knightly and Chris Turner said: “It is important to remember we get November inflation on 13 December – the day before the FOMC meeting – and the outcome will be important for what the Fed has to say.
“If core CPI comes in at or above the 0.3%MoM consensus forecast, its messaging as outlined above will probably prevail. If inflation is softer and yields tumble further then the Fed may have to be more forceful and perhaps raise the possibility of accelerating a run-down in the size of its balance sheet via reduced reinvestment of proceeds from maturing assets.
“The central bank will stick with the hawkish messaging until it is confident inflation is beaten.”
FTSE 100 stays flat: Lunchtime update
Friday 9 December 2022 12:09 , Simon Hunt
The FTSE 100 has stayed relatively flat so far today, down just 2 points to 1,7470 four hours into the day’s trading session.
It’s been a mixed bag for retail stocks, with Sainsbury’s shares up 1% while Frasers Group has fallen more then 2%.
Here’s a look at the biggest movers on the index:
Berkeley Group’s shares rise after it stands by full-year guidance after taking hit from mini-Budget
Friday 9 December 2022 10:53 , Michael Hunter
Berkeley Group, London’s biggest house builder, has revealed the impact of the turmoil in the mortgage market that followed the short-lived mini-Budget of the Truss government.
Sales fell by a quarter in the five weeks immediately after the measures, as mortgage rates soared and fixed-cost deals were pulled by lenders, with interest on two-year deals still above the 5% mark that is closely watched in the industry.
But Berkeley’s CEO, Rob Perrins, told The Standard that house prices would “stay firm”, even with the market set to be subdued for “longer than people think”.
His comments came as the brownfield developer, which builds around 10% of London’s new homes, reported half-year revenue of £1.2 billion, down by almost 2% and profit of £285 million, down 2%. It stood by earnings guidance of £600 million for the full year.
Shares ticked up 8p to 3806p.
Takeover halt hits Pendragon shares, Anglo American shares fall
Friday 9 December 2022 10:09 , Graeme Evans
Pendragon shares have slid 25% or 7.3p to 20.9p after Sweden’s Hedin Mobility ended its takeover interest.
Hedin, which is Pendragon’s biggest shareholder and has car dealerships across Europe, had until tonight to declare its intention to make a formal offer.
It blamed the “challenging market conditions and uncertain economic outlook” for not going ahead, a decision meaning it can’t make another approach for six months.
Pendragon, which trades through the Stratstone and Evans Halshaw brands, responded by reassuring shareholders that it continues to trade in line with City expectations. It added that the takeover interest highlighted its longer-term value through “digital innovation and operational excellence”.
The failure of industry consolidation dampened other stocks in the sector, with Vertu Motors down 1.2p at 53.7p and Lookers a penny cheaper at 76.8p.
Elsewhere, weakness among heavyweight commodity stocks meant the FTSE 100 index shed 5.31 points at 7466.86.
This week’s fall in Brent crude price to $76 a barrel left BP top of the fallers, off 7.85p to 456.1p, while Harbour Energy and Shell were also under pressure.
Anglo American shares dropped 49.5p to 3250p after the mining giant updated production guidance.
It has moderated its near-term growth plans in an effort to ensure it can deliver a “strengthened and repeatable performance". Output will be down 3% this year, before growth of 5% in the following two years.
Anglo also provided an update on the Woodsmith fertiliser project on the North York Moors, a scheme it bought from Sirius Minerals in March 2020.
It has extended the development schedule and capital budget, impacting the carrying value of Woodsmith in full-year results. But it added: “Looking ahead, we are even more positive today about the prospects for Woodsmith.”
Big fine for Santander
Friday 9 December 2022 10:05 , Simon English
SANTANDER was today whacked with a £108 million fine for what the City watchdog called “serious and persistent” money laundering failures.
While that is not the biggest fine for money-laundering dished out in recent years, it is a serious embarrassment to a bank trying to present an image as a wholesome, friendly high street bank.
It has been using TV Celebrities Ant McPartlin and Declan Donnelly in a “Bank of Antanddec” campaign that it has claimed gave it high scores for “brand love”.
The Financial Conduct Authority says that between December 2012 and October 2017 Santander failed to manage its own systems, impacting 560,000 business customers.
Primark on track to open 27 new stores despite falling profits
Friday 9 December 2022 08:54 , Simon Hunt
Primark owner Associated British Foods said it was on track to open another 27 of the discount clothing stores amid a boom in sales but warned profits would be lower than last year.
Of the 27, 10 new stores would be opening in the run-up to Christmas, including a new outlet in Angers, France.
Sales were expected to continue to grow in the months ahead, ABF said, but warned profits were set to dip as a result of “further significant input cost inflation.”
ABF shares fell 1% to 1,367p.
Julie Palmer, Partner at Begbies Traynor, said: “This morning’s update is a rare positive in what has been a very difficult period for retailers up and down the country.
“In a world where consumers are tightening their belts, Primark may well be one of the winners if people looking to spruce up winter wardrobes need to do it on a tighter budget.”
Oil stocks put pressure on FTSE 100, Ocado 3% higher
Friday 9 December 2022 08:39 , Graeme Evans
The FTSE 100 index is 17.02 points lower at 7445.15, having surrendered gains seen in the opening minutes of trading.
Declines of more than 1% for shares in BP and Shell contributed to the weaker-than-expected performance, reflecting the recent decline in the Brent crude price to around $76 a barrel.
Fellow heavyweight stocks GSK and Diageo added to the pressure on the top flight after their shares fell 19.6p to 1464p and 43.5p to 3732.5p respectively. The strongest performance came from technology stock Ocado, which rose 3% or 20.5p to 696.4p.
The FTSE 250 index stood 66.25 points higher at 18,890.26, with ASOS, Redrow and TUI among the stocks more than 1% higher.
FTSE 100 higher amid US inflation focus
Friday 9 December 2022 07:54 , Graeme Evans
Wall Street will today get an indication on the direction of US inflation when the monthly producer prices index (PPI) reading is released.
The PPI figure is expected to show November growth of 0.2%, having risen at a slower rate since the summer. A continuation of this trend will fuel optimism ahead of Tuesday’s CPI inflation print, which last month showed a surprise fall to 7.7%.
The Federal Reserve is due to hike interest rates by 0.5% next week, with this month’s inflation trends a big factor in determining the outlook for policy early next year.
US markets ended a five-day losing streak last night and CMC Markets expects the FTSE 100 index to rally 19 points higher at 7,491 this morning, having closed 0.2% lower yesterday.
Santander fined for financial crime failings
Friday 9 December 2022 07:35 , Graeme Evans
Santander UK has been fined £107.7 million after the Financial Conduct Authority (FCA) found “serious and persistent gaps” in the lender’s anti-money laundering (AML) controls.
The regulator said the failures significantly impacted the account oversight of more than 560,000 business customers between 2013 and October 2017.
It highlighted one case where a new customer opened an account as a small translation business with expected monthly deposits of £5,000. Within six months it was receiving millions in deposits and swiftly transferring the money to separate accounts.
Although the account was recommended for closure by the bank's own AML team in March 2014, the FCA said poor processes and structures meant that this was not acted upon until September 2015.
Mark Steward, the FCA’s executive director of enforcement and market oversight, said: "Santander's poor management of their anti-money laundering systems and their inadequate attempts to address the problems created a prolonged and severe risk of money laundering and financial crime.
Santander UK said it had since overhauled its financial crime technology, systems and processes.
Chief executive Mike Regnier added: “Today over 4,400 staff are focused on preventing financial crime and we continue to invest to meet our responsibilities and keep our customers and communities safe."
ProCook issues profit warning after sales disappoint
Friday 9 December 2022 07:30 , Simon Hunt
Upmarket kitchenware firm ProCook has issued a profit warning due to dwindling sales in the run up to Christmas.
The Gloucester-based business now said it hopes to break even by the end of its financial year, down from the original £-6 million underlying profit it said it would make in October.
In an update the firm said: “We have seen weaker sales performance than we anticipated, with softer consumer demand driven by the challenging consumer environment.”