Kignfisher profits come in better-than-expected, Diageo reports strengthening business
London open
Beverages
22,168.52
14:50 26/04/24
Diageo
2,780.00p
14:50 26/04/24
FTSE 100
8,131.78
14:50 26/04/24
FTSE 350
4,465.87
14:50 26/04/24
FTSE All-Share
4,419.29
14:50 26/04/24
The FTSE 100 is expected to open seven points higher on Wednesday, having closed up 0.3% at 7,275.25 on Tuesday.
Stocks to watch
Kingfisher posted better profits than were expected for the first half of the year but the do-it-yourself retailer remained cautious on the second half backdrop in the UK and France. The FTSE 100 group, which had released most of its sales figures already that showed continued weaker sales in France and disruption to its UK business from product availability, reported retail profit in the six months to 31 July up 0.5% to £467m, underlying pre-tax profit up 1% to £440m and adjusted pre-tax profit down 6% to £394m.
Diageo issued an update on its trading on Wednesday morning, claiming its business continued to strengthen through improved marketing, innovation and commercial execution, as investors prepared for the company’s annual general meeting. The FTSE 100 distilling giant said it remained “well set up” to deliver in line with its own expectations. “We expect the H1 organic net sales growth rate will be impacted by the later timing of Chinese New Year and by the expected impact of the highway ban in India,” chief executive Ivan Menezes noted.
In an update for the period from 1 April, Babcock said trading is in line with its expectations and the outlook for the year is unchanged. Revenue visibility has continued to improve, with 89% of revenue now in place for 2017/18 and around 57% for 2018/19. Meanwhile, the order book and bid pipeline of opportunities are stable and continue to provide the group with the confidence to grow revenue as expected over the medium term.
Newspaper round-up
Bidders for UK stock market listed companies must lay out more detailed plans for their target, including location of its head office and research and development investment, under proposed rules put forward by the takeover watchdog and backed by the government. The new rules, which were published in a consultation document on Tuesday, also give companies, unions and other employee representatives more time to respond to bids in changes which follow the controversial £115bn attempted takeover of Unilever by Kraft Heinz earlier this year. - Guardian
Military chiefs are considering reducing the size of the Royal Marines by 1,000 as part of a cost-cutting defence review, The Times understands. Other options include scrapping at least one amphibious assault ship, the early retirement of a fleet of C130 transport aircraft and a slowdown in the purchase of F35 fast jets as the Ministry of Defence must find up to £3 billion a year in savings to fund a ten-year plan for the shape and size of the armed forces that was unveiled in 2015. - The Times
Public services will deteriorate unless the government scraps its cap on public sector pay and finds the money to cover the extra cost without squeezing budgets, a leading think tank has warned. The Institute for Fiscal Studies said that standards would drop at hospitals and schools in particular if the government were to run into recruitment problems because of low pay. - The Times
The weak pound may have proved a boon to British hotels, but the rising cost of imported goods is starting to put a squeeze on margins while filling job vacancies is proving a challenge. According to a report by PWC, the accountancy firm, the slump in the value of sterling has attracted more foreign tourists, helping the hotel industry to withstand the impact of the terrorist attacks in London and Manchester, but the report predicts growth next year will be slower because of a deceleration in the economy, some waning of the effect of the weak pound on tourism and a big increase in new room supply. - The Times
US airlines have told the UK to move faster to ensure passenger and cargo flights to Heathrow, Stansted and other airports will continue without disruption after Britain leaves the EU. The aviation trade body Airlines for America, whose members include United, American Airlines and FedEx, says the multibillion pound traffic in both directions will be put at risk unless politicians concentrate their minds on the impact Brexit will have on the industry. - Guardian
US close
Stocks on Wall Street finished higher on Tuesday as investors listened in on a speech by the American president to the United Nations general assembly, and ahead of the US Federal Reserve's policy decision the next day.
The Dow Jones Industrial Average added 0.18% to 22,370.80, while the S&P 500 finished ahead 0.11% at 2,506.65 and the Nasdaq 100 was 0.17% firmer at 5,991.08.
Giving sentiment a boost, a CNBC report reignited speculation of a potential merger between Sprint and T-Mobile, lighting a fire under the entire telecoms space.
Additionally, in a speech at the UN's New York headquarters US president Donald Trump told the General Assembly "much more" needed to be done on North Korea and labelled Tehran a "murderous regime".
Looking out to the next session, following their two days of meetings rate-setters at the US central bank were expected to announce the start of their balance sheet tapering, which many analysts appeared to believe would go largely unnoticed because it had been clearly 'telegraphed' for some time now.