FTSE 100 Live: Unilever price warning, AstraZeneca and BAT post results

FTSE 100 Live: Unilever price warning, AstraZeneca and BAT post results

Blue-chip companies Unilever, AstraZeneca and British American Tobacco today lead a busy session for end-of-year corporate earnings.

AstraZeneca boss Pascal Soriot reported a 25% rise in revenues to $44.3 billion (£36.6 billion) and said he expects to see another year of double-digit revenue growth in 2023.

Unilever profits topped 8 billion euros (£7.1 billion) last year, partly thanks to higher prices for its consumer goods brands including Hellman’s, Domestos and Ben & Jerry’s. It warned that while inflation is tempering, there are most cost increases to come this year.

British American Tobacco revenue rose to £27.7 billion, as it announced an improved forecast for its vaping division.

FTSE 100 Live Thursday

  • Unilever warns on more price rises to come

  • BAT sees vaping profit earlier than expected

  • Housebuilders encouraged by January trends

FTSE dips, but still achieves record close

Thursday 9 February 2023 16:33 , Daniel O'Boyle

The FTSE 100 declined slightly in the afternoon, from 7941 at 2:30 p.m. to a close of 7911, but this was still a new record for the close of trading.

The previous  end-of-day record had been 7901, set on Friday (3 February).

Yesterday, the index of top London companies peaked at 7931, but declined in the late morning and afternoon before closing at 7885.

The record close means the FTSE could be within touching distance of 8000 tomorrow morning when December GDP figures are announced.

Is it a problem that nobody can hold down the Business Minister position for long?

Thursday 9 February 2023 14:58 , Daniel O'Boyle

Kemi Badenoch is the sixth Business Secretary in three years, and the 10th since the 2010 election.

Has that made it harder for UK businesses to create any long-term plans?

“It isn’t a positive thing,” says Roger Barker, director of policy and corporate governance at the Institute of Directors.

Read more here

Electric cars drive Volvo revenue up in 2022

Thursday 9 February 2023 14:15 , Daniel O'Boyle

Volvo reported a 17% increase in revenue in 2022 to SEK330.1 billion, as the share of its sales that were from electric cars increased.

The automotive manufacturer said that 11% of its sales were electric last year, up from 4% in 2021. In Q4, 18% of its sales were electric.

The Stockholm-listed business also reported operating profit f SEK22.3 billion for the year.

“We managed through the heavy turbulence of the year and made significant progress on our strategic ambitions in 2022, as we accelerated towards our aim to become a fully electric car company by the end of the decade and climate neutral by 2040,” said Jim Rowan, president and chief executive of Volvo Cars.

US jobless claims increase, but remain low

Thursday 9 February 2023 13:59 , Daniel O'Boyle

Applications for unemployment benefits in the US rose to 196,000 in the week to 4 February, ending a five-week-long run of declines.

However, the figure was only up by 13,000 from the prior week and was low by historical standards, despite a number of recent high-profile layoffs at major tech companies.

The announcement comes after a suprisingly strong December jobs report last week.

The S&P 500 is projected to open around 35 points higher than it closed yesterday, at roughly 4152.

The Dow Jones Industrial Index, meanwhile, is set to rise by about 225 points to 34172.

DWP to close 20 Jobcentres, including four in London

Thursday 9 February 2023 12:55 , Daniel O'Boyle

The Department of Work and Pensions is set to close 20 Jobcentres, including four in London, but no staff will be laid off.

All of the locations in question were set up as temporary Jobcentres during the Covid-19 pandemic because of “anticipated pressures on the labour market”, DWP undersecretary Viscount Younger of Leckie said.

“The Department has always been clear the additional Jobcentres were opened on a temporary basis to help us adapt our services and support in response to the pandemic,” Viscount Younger added.

In total, DWP set up 194 temporary jobcentres in 2021 and 2022. Younger said the government would eventually close any of these which are no longer required.

“The decommissioning of these additional temporary sites, where they are no longer required, will not reduce our levels of service or access to face-to-face appointments going forward,” he said. “Most customers will return to being served by their established Jobcentre and there will be no reduction in the number of Work Coaches serving customers as a result of these changes.”

Read more here

FTSE 100 midday movers: British American Tobacco investors put out on move away from share buybacks

Thursday 9 February 2023 12:34 , Michael Hunter

British American Tobacco was among biggest single fallers on the FTSE 100 after its latest trading update, in which the highly cash-generative company said it would “prioritise strengthening the balance sheet”, in a signal it was moving away from share buybacks.

BAT said the move to hold on to cash came due to “our incremental investment plans in 2023” and to” further accelerate our transformation, and in light of the uncertain macro environment, higher interest rates, outstanding litigation and regulatory matters.”

It also said buybacks have an “important role to play” within its capital framework and it would keep plans “under review”.

Entain, the bookmaker, made the biggest single fall after its US joint venture partner distanced itself from making a full bid for the company. Merger and acquisition talk also set the pace at the top of the leaderboard, with Standard Chartered holding on to top spot amid fresh speculation of takeover interest in the London-listed emerging markets lender.

‘End of Covid effect’ buoys Westfield

Thursday 9 February 2023 11:33 , Jonathan Prynn

The owner of the Westfield shopping malls in White City and Stratford (above) today hailed “the end of any Covid effect” as it said UK sales hit 96% of pre-pandemic levels last year.

The Paris and Amsterdam-headquartered shopping centre operator Unibail-Rodamco-Westfield (URW) said like-for-like UK income was up 21.4% as footfall recovered to 89% of the 2019 peak.

The company said: “Footfall is expected to continue to grow as vacancy decreases.”

Across the group as a whole sales were up 27% at €2.26 billion (£2 billion) while profits were a third higher at €1.34 billion (£1.2 billion).

CEO Jean-Marie Tritant, said: “URW achieved excellent financial results in 2022, confirming the end of any Covid effect on our business. In particular, tenant sales and rent collection returned to pre-pandemic levels and we delivered consistent improvement in operating metrics across all regions.”

FTSE 100 rallies, Standard Chartered and Entain in bid focus

Thursday 9 February 2023 10:37 , Graeme Evans

The FTSE 100 index today rallied 0.7% to a new peak of 7946 as traders digested takeover speculation and a packed session of heavyweight results.

The biggest riser in the FTSE 100 was Standard Chartered after Bloomberg said that First Abu Dhabi Bank is still interested in buying the Asia-focused lender, reviving speculation that had appeared to fade last month.

Shares jumped 9% or 63.2p to 752p as the report said due diligence had been completed but that regulatory and compliance issues remain a hurdle to a potential deal.

Liverpool sponsor Standard Chartered was the biggest riser after Bloomberg said First Abu Dhabi Bank may submit a $35 billion bid / Getty Images (Getty Images)
Liverpool sponsor Standard Chartered was the biggest riser after Bloomberg said First Abu Dhabi Bank may submit a $35 billion bid / Getty Images (Getty Images)

Entain shares slumped, however, after US casino giant MGM said it had “moved on” from attempts to buy its Bet MGM joint venture partner.

MGM, which runs Las Vegas casinos such as the Bellagio, made an unsuccessful $11 billion bid for Entain last year but takeover speculation has continued to swirl.

Reports have focused on a fresh bid once the UK publishes its long-awaited white paper on gambling reform, although MGM chief executive Bill Hornbuckle made it clear this was not the case during an earnings call last night.

His comments ensured Entain shares lost all of this year’s gains, diving 10% or 159.5p to 1408p, at the top of the FTSE 100 fallers board.

Other stocks under pressure included British American Tobacco after a results-day fall of 140.5p to 2950.5p. Rival Imperial Brands also weakened 45p to 1963p.

However, the support of AstraZeneca after its shares jumped 4% or 486p to 11,238p and further gains in the oil sector ensured London’s top flight stood 60.90 points higher at 7946.07.

The performance of the FTSE 250 index was more subdued, with the UK-focused benchmark up 14.08 points to 20,317.89. Darktrace featured on the risers board, lifting 3% or 6.7p to 249.3p after it announced the launch of a new AI-powered cyber attack prevention tool.

Unilever on inflation -- it is not over yet

Thursday 9 February 2023 09:40 , Simon English

THE cost of basic foodstuffs and other kitchen staples will keep rising for at least another six months, consumer goods giant Unilever warned today.

In a clear sign that the battle against inflation is not yet won, the maker of everything from Hellman’s mayonnaise to Dove soap and Domestos bleach said price increases that will exacerbate the cost-of-living crisis are far from over.

That’s a blow to central bankers and politicians who have been signalling that inflation has peaked and that interest rates could soon stop rising.

Unilever, which today reported a 14.5% jump in sales for 2022 to e60.1 billion, said that while inflation is tempering, there are most cost increases to come this year, especially in the first half.

Finance chief Graeme Pitkethly said: “Pricing will start to moderate, there will be lower rates of increase. I think we are probably past peak inflation but not past peak price increases.”

Prices are up a record 13.3% at Unilever, even higher than the official UK inflation figure of 10.5%.

read more here

FTSE 100 at record, Astra shares up 2%

Thursday 9 February 2023 09:03 , Graeme Evans

The FTSE 100 index is back at a record level, having made a stronger-than-expected start on the back of results-day gains for two of the London market’s biggest stocks.

The progress also reflected the positive mood across European markets after Germany’s delayed inflation reading for January came in below forecast at 8.7%.

The top flight added 0.6% or 49.23 points to 7934.40 as AstraZeneca rose by 2% or 264p to 11,016p and Unilever cheered 16.5p to 4116p.

Shares in Asia-focused bank Standard Chartered led the FTSE 100 following a surge of 8% or 54.2p to 743p.

The FTSE 250 index was broadly flat, up 16.05 points at 20,319.86, led by cyber security firm Darktrace after its shares rose 3% or 7.5p to 250.1p.

Ladbrokes owner Entain’s shares plunge as MGM rules out acquisition

Thursday 9 February 2023 08:39 , Daniel O'Boyle

Shares in Ladbrokes and Coral owned Entain plummeted after US casino giant MGM said it had “moved on” from attempts to buy the London-listed betting operator.

MGM, which runs Las Vegas casinos such as the Bellagio, made an $11 billion bid for Entain last year, which was rejected.

MGM and Entain share a joint venture together targeting the US online market - which has grown rapidly as states legalise sports betting and online casino games. As a result, rumours of a merger did not go away, with reports earlier this year that MGM was waiting until the UK publishes its long-awaited white paper on gambling reform before delivering a fresh bid.

However, during an earnings call after MGM’s 2022 financial results, CEO Bill Hornbuckle definitively ruled out a deal to buy Entain.

“I think it’s time to be definitive and give a little direction,” he said. “The simple answer on Entain is no, we’ve moved on.”

Entain shares were down 12.9% to 1367p this morning.

End of the Covid-19 boost for AstraZeneca as it looks to new medicines for growth

Thursday 9 February 2023 08:14 , Simon Hunt

The boost to Astrazeneca’s growth fuelled by its coronavirus vaccine is coming to an end as the firm looks to new medicines for future streams of income.

The Cambridge-based business said it would see double-digit growth excluding Covid-19 medicines in 2023, but only single-digit growth when they are factored in.

Boss Pascal Soriot said: “We plan to initiate more than thirty Phase III trials this year, of which ten have the potential to deliver peak year sales over one billion dollars.”

AzstraZeneca shares climbed 1.5% to 10,914p in the opening minutes of trade.

 (PA Wire)
(PA Wire)

FTSE 100 chasing records again after stronger-than-expected opening

Thursday 9 February 2023 08:09 , Daniel O'Boyle

The FTSE 100 opened higher than expected, at 7920, as it again chases a record.

The index of top-flight London-listed companies peaked at 7931 yesterday, an all-time high, before dipping in the afternoon and closing at 7885.

Trading on IG Index expected an opening of just over 7900, around where the FTSE started yesterday. However, strong results from a number of blue-chip companies such as Unilever mean the index started at 7920 today and may once again reach new heights.

Redrow points to ‘new, natural level’ for housing market

Thursday 9 February 2023 07:49 , Michael Hunter

Redrow, the FTSE 250 housebuilder, said today that the housing market “appears to be finding a new, natural level.”

It made the statement as it reported first-half revenue of £1.03 billion, around the record of £1.05 billion hit last year, with profit for the period slipping to £198 million from £203 million. That came as what Redrow called “economic an political uncertainty” led to a halving of private sales in the period, when the “mini”-Budget of the short-lived government of Liz Truss roiled mortgage markets.

But the Flintshire-based company said it had made an “encouraging start” to the second half of the year, with reservation rates recovering.

It said: “Whilst 2023 will be a challenging year as the market resets, early indications are better than anticipated and the market appears to be finding a new, natural level.”

Unilever warns on more price rises to come

Thursday 9 February 2023 07:46 , Simon English

UNILEVER profits topped e8 billion (£7bn) in the last year, partly thanks to higher prices for its consumer goods brands including Hellman’s, Domestos and Ben & Jerry’s.

It warned that while inflation is tempering, there are most cost increases to come this year.

Finance chief Graeme Pitkethly said: “Pricing will start to moderate, there will be lower rates of increase. I think we are probably past peak inflation but not past peak price increases.”

Sales in 2022 rose 14.5% to e60.1 billion, with profits up 25% to e8.3 billion.

That might anger some retailers who think Unilever is squeezing too hard on price.

Sales in the fourth quarter rose 9.2%, somewhat better than the City was expecting.

The company handed investors dividends of e4.3 billion and share buybacks of e1.5 billion during the year.

Chief executive Alan Jope, soon to be replaced by Hein Schumacher, said: “Unilever delivered a year of strong topline growth in challenging macroeconomic conditions. Underlying sales growth was 9.0%, driven by disciplined pricing action in response to high input cost inflation. Growth was broad-based across each of our five Business Groups, led by strong performances from our billion+ Euro brands. Despite sharp rises in material costs, we have prioritised stepping up our brand and marketing investment. Underlying operating margin was delivered in line with our guidance, with underlying operating profit up for the year.”

Unilever has faced strong criticism for still doing business in Russia. It says it has a responsibility to the 3000 staff it has in the country.

Jope said last month: “If we hand [our] assets over to the Russian state or some other Russian oligarch they will be used to support this war and we are minimising [the Russian] business not maximising that business.”

Good times for Watches of Switzerland

Thursday 9 February 2023 07:42 , Daniel O'Boyle

There was no sign of a slowdown in the luxury watch market, as Watches of Switzerland reported a 17% increase in revenue in the three months to 29 January.

The company, which owns almost all of the world’s most famous luxury watch brands including Rolex, Patek Philippe and Omega, brought in £402 million during the period.

Chief executive Brian Duffy added that trading remains strong this quarter, suggesting that recession fears have not stopped customers from buying luxury timepieces.

UK and Europe revenue was up 7% to £238 million, thanks in part to the expansion and reopening of a multi-brand Canary Wharf showroom.

US markets lower on rate fears, FTSE 100 steady

Thursday 9 February 2023 07:42 , Graeme Evans

The FTSE 100 index is expected to open slightly higher today, despite a downbeat session for US markets last night.

The S&P 500 fell by more than 1% and the Nasdaq Composite declined 1.7% amid fears that US interest rates will stay high for longer than markets currently expect.

Futures markets are pricing a steadier start on Wall Street later, with CMC Markets looking for London’s FTSE 100 index to open 18 points higher at 7903.

The top flight set a new record of 7934 yesterday, but fell back later in the day to finish the session 0.3% higher at 7885.

Bellway encouraged by January trends

Thursday 9 February 2023 07:36 , Graeme Evans

Housebuilder Bellway today said its reservation rate “sequentially improved” throughout each week in January, echoing the comments made by larger rival Barratt Developments yesterday.

As well as the usual seasonal pick-up, Bellway said the improvement reflected the easing of affordability pressures as wages rise and mortgage rates fall back.

It has been encouraged by visitor numbers at its outlets in January, which were significantly ahead of the levels in the fourth quarter of 2022.

The company reported a “robust” performance for the six months to 31 January, with record completions of 5,695 homes and a 1.6% increase in the average selling price to £316,900. However, the reservation rate reduced by 31.7% to 138 per week.

Compass Group revenue heads north as returning office workers and weak pound provide a boost

Thursday 9 February 2023 07:33 , Michael Hunter

Compass Group, the world’s biggest contract caterer, has said that the return of office workers has helped it, while the weak pound flattering earnings made abroad left earnings on course for a £1 billion boost.

The FTSE 100 group, which operates canteens and staff restaurants around the world, said “foreign exchange translation” would lift annual revenue for 2022 by £1.3 billion and operating profit by £94 million.

Compass also caters for big sporting occasions, including Wimbledon, which have also come back strongly after the pandemic.

It said “like for like volumes were particularly strong in Business & Industry, as employees continued to return to the office, and in Sports & Leisure, where participation rates remained high.”

It also said inflation “remained elevated”, but it was working to “mitigate this pressure”.

BAT vaping division to turn a profit earlier than expected

Thursday 9 February 2023 07:26 , Daniel O'Boyle

British American Tobacco expects its “new category” division, including vaping products, to be profitable by 2024, one year earlier than previously anticipated.

The company announced the update as part of its 2022 financial results.

Revenue from the group is set to come to £27.7 billion for 2022, up 7.7% from 2021.

The new categories division - made up of vapes, tobacco heating products and pouches - contributed £2.9 billion of this revenue, which was up by 40.9%.

“Our new category business delivered strong volume, revenue and market share growth and has become a significant contributor to the group’s financial delivery,”  chief executive Jack Bowles said.

Group operating profit also increased slightly, to £10.5 billion. The company said a number of one-off charges, including its exit from Russia and the need to set aside money because of a US investigation into alleged historical breaches of sanctions, brought its profits down.

Last week, BAT announced a restructuring of its regional divisions which would include merging Europe with the non-US Americas. A spokesperson told the Standard at the time that the new plan could lead to layoffs, but that no decisions on the matter had been made yet.

Darktrace announces new AI-powered cyber attack prevention tool

Thursday 9 February 2023 07:14 , Simon Hunt

Cybersecurity Darktrace has launched a new tool which uses AI to pre-empt cyber attacks, in a bit to reverse its fortunes amid a bleaker revenue outlook.

The product has been setup to identify the paths adversaries may take to attempt to disrupt the operations of critical infrastructure, using AI to “think like an attacker” and keep ahead of the adversary.

Last month, Darktrace saw its shares tumble below its flotation price for the first time after slashing its revenue outlook as the deepening economic gloom impacts new customer growth.

Recap: Yesterday’s top stories

Thursday 9 February 2023 06:52 , Simon Hunt

Good morning. Here’s a look at yesterday’s top stories.

Coming up today:

  • Unilever Q4 results

  • AstraZeneca results

  • EU Economic Confidence data

  • US initial jobless claims

  • PepsiCo Q4 results