FTSE 100 Live April 18: Rising UK profit fuels speculation; Airlines are leading the FTSE index higher

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1681809734 FTSE 100 keeps moving forward, Mitie up 13%

The Chinese GDP figure and a strong start to Wall Street earnings season today helped the FTSE 100 rise for the eighth consecutive session.

Mining-heavy stocks led the recent improvement after stronger-than-expected numbers showed that China’s gross domestic product accelerated 4.5% in the first quarter of the year.

A rebound in the world’s second largest economy helped Anglo American and Antofagasta shares rise 2%, while Rolls-Royce rose 1.5p to 152.5p as traders view China Airlines as key to a sustainable recovery in engine hours.

Resilient profit flows from major US lenders also helped the mood in London as the FTSE 100 index improved by 18.15 points to 7897.66.

Ahead of the reporting season for the UK sector which begins next week, NatWest shares rose 3.8p to 275.1p and Barclays added 1.9p to 156.2p in another sign of confidence returning after last month’s industry turmoil.

The blue-chip bullish board also featured betting giant Entain after its latest update highlighted the “strong momentum” driven by its US joint venture BetMGM.

Shares jumped 32.5p to 1338p as Entain said BetMGM’s Super Bowl quarter saw a 76% increase in revenue in line with 2023 guidance for an annual figure of $2 billion.

The standout performance in the FTSE 250 came from facilities manager Mitie after it added £10m to its earnings guidance for the year just ended.

The company, which has 68,000 employees working on behalf of clients including Eurostar and the Ministry of Defence, expects a surplus of at least £155m. Mitie shares jumped 13%, or 10.5p, at 92p as it also pledged to buy back £50m of shares.

In contrast, the dull FTSE 250 rose 18.41 points to 19,306.42 after dropping more than 3% for homebuilders Redrow and Harbor Energy. Moneysupermarket.com rose 4 points to 252.5 as the price comparison site reported strong growth in the first quarter from insurance and travel revenue.

1681808999 Insolvencies exceeded Covid-era levels to hit a new record in March

Bankruptcies rose last month to the highest level since the government began compiling statistics four years ago, surpassing pandemic-era highs.

There were 2,457 companies that declared bankruptcy last month, up 16% from March 2022, in addition to 288 compulsory liquidations, double the number from the previous year.

David Kelly, PwC’s head of insolvency, said the figures showed whether the UK could avoid a technical recession would not be a huge relief for business owners, who would struggle either way.

“While there was some good news earlier this month that the UK had avoided a technical recession, this has not been comforting for businesses, many of which are still suffering from adverse economic conditions,” he said.

1681806619GSK to spend £1.6 billion on Canadian blockbuster cough medicine company

GlaxoSmithKline today announced plans to spend £1.6 billion on the purchase of Canadian drugmaker Belows Health in a move that will help revitalize the city’s reputation for deal-making while also bringing a potential cough remedy to the FTSE 100 company.

The $2 billion deal in the capital arm comes after a recent lull in mergers and acquisitions that has heightened concerns about its status as a major international location for mergers and acquisitions.

Read more here

Airplane flying high

EASYJET offered hope for the beleaguered airline trade and broader consumer economy today when it said summer bookings were rising even as ticket prices soared.

At the height of Covid, easyJet incurred losses of more than £2 billion amid broader concerns about the future of air travel. Some have said that the days of cheap flights for the masses are over.

The budget carrier said today that profit for the year will beat City’s forecast of £260m.

Demand was strong over Easter with 1,600 flights a day. Passenger levels have returned to pre-Covid levels, despite French air traffic control strikes and pressure on consumer spending due to a widely reported cost-of-living crisis.

80% of easyJet’s summer holidays are already sold out suggesting that its pricing point is an advantage in difficult economic times.

Passengers reached 15.6 million during the first three months of the year, up more than a third from 11.6 million during the same period in 2022.

Read more here

1681803251FTSE 100 Rising, Airline Stocks Rise After EasyJet Upgrade

The FTSE 100 rose 22.89 points at 7,902.40, with the gambling firm taking the top-performing blue chips after the latest trading update.

Ladbrokes owner shares rose 3%, or 35.5 points, to 1,341 pence, outpacing miners such as Antofagasta and Anglo American as traders also welcomed stronger-than-expected GDP numbers in China today.

The FTSE 250 rose 43.56 points to 19,330.46, with outsourcing firm Mitie up nearly 10%, or 7.8p, to 89.3p after it raised earnings guidance and announced it would launch a new £50m share buyback.

Low-cost airline easyjet rose 2%, or 12.2 points, to 523.2 points, near its highest level since May, after it reported a sharp drop in winter losses and raised its full-year forecast as summer booking momentum picked up.

Easter demand was strong with an average of around 1,600 flights operating a day. Wizz Air benefited from the update as its shares rose 3%, or 89p, to 2850p.

1681802640 Wise shares sank after revenue halted

Shares of Wise fell 10.6% to 523 penn after an unexpected drop in fourth-quarter revenue.

Sales at the fintech giant fell 1% to £224m in the three months to March, while average transaction volume fell 7%, meaning costs rose for every £1 transacted.

Wise said: “We continue to see a slower pace of growth in our larger (>£10,000) customer groups. We believe that payments between these groups, such as property purchases and investments, are more discretionary in nature and affected by macroeconomic conditions to a greater extent.”

1681801861 Acquisitions keep Ladbrokes owner growing as UK arm stalls amid reform delays

The Ladbrokes Entain owner has relied on acquisitions and the US to continue to grow with UK online revenue slumping while the company awaits a package of reforms that appears to be further overdue.

Organic revenue was flat, but Entain noted that without the UK and Germany — where reforms also affected the company — revenue would have grown 6%.

In the UK, the company has introduced a number of changes to get out ahead of widely expected government reforms such as “affordability checks” for high-spending customers. It says it will cost £110m a year.

However, while the white paper laying out these reforms was originally slated for 2021, it has yet to be published. Reports last month said that the deployment may come yesterday, but it did not materialize.

While organic revenue was flat, the acquisition of Dutch betting site BetCity helped ensure that the company’s total revenue rose 16%. Revenue growth would also have been higher if the numbers included Entain’s US joint venture BetMGM, which grew rapidly as states legalized sports betting.

1681801920 Earnings growth fuels higher speculation rates

A larger-than-expected 5.9% rise in UK earnings in today’s labor market report added pressure on the Bank of England ahead of its May policy meeting.

Annual earnings growth including bonuses for the three months through February compared to Citi’s forecast of 5.1%, however it was still well below the latest inflation rate of 10.4% as wage pressure in real terms continues to weigh on households.

The number and evidence of a tight labor market will worry monetary policy makers as they look for signs that inflation is back under control after a series of interest rate hikes.

The pound rose 0.3% to $1,241 this morning after a labor market report indicated the need for further rate hikes.

1681800858 Saatchi pays 10.8 million pounds to fight takeover offers

Marketing giants M&C Saatchi spent £10.8m fending off two takeover bids last year.

Advanced Computer Software founder Vin Moriah and Next Fifteen Communications had hoped to buy the company that Morris and Charles Saatchi founded in the 1990s, with Saatchi’s board accepting a $390 million offer from Next 15. However, after Next 15’s stock price plummeted, The board withdrew its approval, but the group continued to try to strike a deal before giving in in October.

Saatchi’s cost of almost £11m to fend off those bids meant that although her main earnings were at a record high, her final figure was down to £5.4m.

The announcement comes at a time when several London-listed companies appear to be targeted for takeovers by US private equity firms.

1681800118 Al-Hakim outperforms guidance in 2022-23

Wise reported income for the year to March 31st of £964m, beating previous expectations.

The fintech giant expected income — which represents revenue plus interest income — to grow between 68% and 72% for the year, but the final figure instead represented growth of 73%.

note

“At Wise, we are focused on our mission of building money without borders and offering faster, fairer choices to more people and businesses around the world,” said CEO Cristo Carman. “To achieve this mission, we are building a resilient and profitable business that our clients can trust to be here for them through the good times and through the challenges of an uncertain macro environment.

“Our financial results for this quarter show significant progress in our mission.”

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