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| Upstream | UPS | London | Ordinary Share |
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Posted at 31/1/2025 13:15 by master rsi MARKET REPORTLONDON MARKET MIDDAY: FTSE 100 at new peak ahead of US inflation print (Alliance News) - The FTSE 100 traded close to new all-time highs around midday on Friday, led by an 11% jump in Smiths Group, ahead of key US inflation data. The blue-chip index is on track to post a gain of around 6.2% for January, its biggest monthly gain since November 2022. Russ Mould at AJ Bell said: "Investors will be relieved that the markets have successfully negotiated a week full of major events including a Federal Reserve interest rate meeting and the start of the Magnificent Seven earnings season." "Later on, there’s one more hurdle to get over this week as core PCE inflation data is released in the US. This metric is a big factor in informing the decision making of the Fed so a surprise in either direction could make markets increasingly febrile again." The FTSE 100 index climbed 33.01 points, 0.4%, at 8,679.97. It earlier hit a new high of 8,692.84. The FTSE 250 was up 77.66 points, 0.4%, at 20,882.73, and the AIM All-Share firmed 0.57 of a point, 0.1%, at 718.80. The Cboe UK 100 was up 0.3% at 869.85, the Cboe UK 250 rose 0.4% to 18,273.39, but the Cboe Small Companies was down 0.5% at 15,849.94. The feel good factor in equities spread to Europe. In Frankfurt, the DAX 40 rose 0.3% in early afternoon trade, just below a new intra-day all-time high, while the CAC 40 was 0.5% to the good. Over in New York, the Dow Jones Industrial Average is called up 0.3%, the S&P 500 is seen rising 0.5% and the Nasdaq Composite 0.8% higher. Apple, the world's most valuable listed firm, is 3.5% higher in premarket trading after a mixed results. The firm delivered better than expected earnings, and reassuring guidance, despite weak iPhone sales and a muted showing in China. Gains in stock markets came despite fresh warnings of tariffs from Donald Trump, which prompted fresh dollar strength. Deutsche Bank's Jim Reid noted Trump has said that he plans to follow through on his threat to impose 25% tariffs on February 1, saying that "we’ll be announcing the tariffs on Canada and Mexico for a number of reasons", citing trade deficits, immigration and fentanyl flows. But Reid said Trump's comments did leave an open question on the exact scope of tariffs to be announced, notably saying he was still considering whether Canadian oil would be exempted. "We’ll have to wait and see just what measures are implemented, or indeed if last minute concessions might yet be reached, or if the most aggressive tariffs are short lived. But it does look less likely that Feb 1st will pass with no tariff action and the exact approach may be instructive for how the new administration are going to approach the tariff question more broadly." But Reid thinks Trump has to "follow through" on some of his threats or "he will lose some negotiating power". The pound traded at USD1.2418 on Friday, down from USD1.2461 late Thursday. The euro fell to USD1.0378 from USD1.0423. Against the yen, the dollar rose to JPY154.68 from JPY154.37. Ahead of the US open, investors will assess the Federal Reserve's favoured inflation gauge, core personal consumption expenditures price index. JPMorgan predicts the core PCE deflator for December, rose 0.2% on month or 2.8% annually. In November, core PCE rose 0.1% on-month for an annual rate of 2.8%. The Federal Reserve's target for core PCE is 2.0%. Fed officials generally consider the core reading to be a better gauge of long-run inflation trends as it excludes the volatile gas and groceries category. On the FTSE 100, Smiths Group jumped 11% after it responded to an activist investor's call for change with plans for a break-up and increased share buy backs. London-based Smiths said it plans to sell its electronic connectors business by the end of 2025 and separate is threat detection arm, either by UK demerger or sale. This will leave the group focused on the John Crane and Flex-Tek businesses giving a focus on "high performance industrial technologies for efficient flow and heat management". Smiths said the proposals would "unlock significant value and enhance returns to shareholders." Analysts at Stifel were pleased. "This is a big, bold plan, finally breaking up the group's conglomerate structure. We think it should unlock material value." Earlier this month, US activist investor Engine Capital said Smiths should explore a split, according to a Financial Times report. Analysts at Citi noted Friday's proposals stop short of re-listing John Crane in the US, as recommended by the activist, but "we see the plan as significant". Retailer Next rose 2.6% after UBS upgraded to buy' from 'neutral and increased its share price target to 11,700 pence from 10,500p. "We believe Next is at an inflection point in terms of growth and valuation" with "a de-risked near term outlook", the broker said, adding it sees Next as a "safe haven". But J Sainsbury fell 1.6% after HSBC downgraded the grocer to 'hold' from 'buy' with a 285p share price target. A barrel of Brent declined to USD75.50 on Friday lunchtime, from USD77.18 at the time of the London equities close on Thursday. An ounce of gold rose to USD2,779.2 an ounce from USD2,793.57, although it eased from an all-time high posted on Thursday of more than USD2,500. Elsewhere in London, Tribal Group leapt 23%. The educational software and services provider expects to report a "positive trading performance" for 2024. Adjusted earnings before interest, tax, depreciation and amortisation, as well as revenue, are to be ahead of current market expectations. It puts revenue consensus at GBP85.6 million, with the market adjusted Ebitda forecast at GBP14.4 million. Still to come in Friday's global economic calendar, US personal consumption expenditures price index and employment cost index data at 1330 GMT. |
Posted at 28/1/2025 22:23 by master rsi MARKET REPORTLONDON MARKET CLOSE: FTSE's defensive qualities shine amid tech volatility (Alliance News) - Stocks in London made strong progress on Tuesday as a degree of calm returned to US markets after Monday's heavy tech-led losses. The FTSE 100 index ended up 30.16 points, 0.4%, at 8,533.87. The FTSE 250 jumped 219.01 points, 1.1%, at 20,588.51, and the AIM All-Share rose 3.93 points, 0.6%, at 715.32. The Cboe UK 100 ended up 0.4% at 855.97 on Tuesday, the Cboe UK 250 gained 1.1% at 18,011.11, and the Cboe Small Companies rose 0.1% to 16,034.53. Russ Mould at AJ Bell noted the FTSE 100 "continued to be an island of calm", with investors lapping up its "plethora" of defensive stocks. "Utilities and healthcare were in demand, implying that investors were keen to ensure portfolios had some support in case of another tech-related wobble," he added. On Monday, concerns that China's DeepSeek's artificial intelligence app could threaten the dominance of the US tech giants sparked carnage with Nvidia dropping 17%. Broadcom and Oracle followed suit, dropping 17% and 14% respectively. On Tuesday, markets in New York were brighter. The Dow Jones Industrial Average was up 0.1%, the S&P 500 was 0.4% higher, while the Nasdaq Composite rallied 1.0%. "The DeepSeek shock has reminded investors they cannot be complacent when trying to play the AI trend. Stocks do not travel in unison and neither do they always travel upwards. Sometimes it’s good to be reminded of this. Valuations have been getting lofty in the tech space and investors need to appreciate that richly priced stocks can fall hard on the slightest bit of bad news," Mould added. Bank of America sees winners and losers in the technology world from DeepSeek. "The exact cost of development and energy consumption of DeepSeek are not fully documented, though...we believe that the implications of lower cost to run AI models is a benefit to the general software group," the broker commented. "The lower cost to run AI should enable capex scale for Microsoft while easing graphics processing constraints likely a negative for Oracle," BofA said in a note to clients. In European equities on Tuesday, the CAC 40 in Paris ended up 0.1%, while the DAX 40 in Frankfurt advanced 0.7%. Tariff chat sparked fresh dollar strength. The pound was quoted at USD1.2432 late Tuesday afternoon in London, down from USD1.2479 at the equities close on Monday. The euro stood lower at USD1.0424, against USD1.0505. Against the yen, the dollar was trading higher at JPY155.63 compared to JPY154.16. Donald Trump said Monday that the US will soon place tariffs on foreign-made semiconductor chips, pharmaceuticals and metals such as steel. Speaking at a Republican congressional retreat in Miami, Trump said the levies could take place in the "very near future," so as to "return production of these essential goods to the US of America." "If you want to stop paying the taxes or the tariffs, you have to build your plant right here in America," he added. Trump was speaking ahead of Wednesday's interest rate decision by the Federal Reserve. Last week the US president called on the US central bank to lower rates but he is likely to be disappointed. The Fed is widely expected to keep the federal funds rate range unchanged at 4.25% to 4.50%. Data on Tuesday showed US consumer confidence declined in January, with both present and future outlooks deteriorating. The Conference Board's Consumer Confidence index dropped by 5.4 points to 104.1 in January, from a revised December reading of 109.5. December's figure was revised upward by 4.8 points but remained 3.3 points lower than November's level. In London, Prime Minister Keir Starmer said the government's "growth mission" was now the driving force behind policy decisions. He told business chiefs in the City of London that had been made clear to "each of our Cabinet colleagues". On Wednesday, Chancellor Rachel Reeves will deliver a major speech setting out plans for growth, expected to include support for expansion of Heathrow airport. Starmer told business leaders: "When you're answering the question, 'should we do X, or should we do Y', that is guided by the mission. "Should we do X? If it's good for growth, good for wealth creation the answer is 'yes', if it's not then the answer is 'no'. "It prioritises and gives a sense of direction to government." He added he was "hard-wiring growth into all the decisions of the Cabinet". On the FTSE 100, Rentokil Initial firmed 0.8% as it kept its outlook unchanged in an unscheduled update on Tuesday, offering a slight lift to shares still beleaguered by a troubling update in September. In a trading statement, Rentokil said organic revenue growth in the final three months of last year was 3.0%. North America organic revenue growth accelerated to 2.3% on-year in the fourth-quarter from 1.4% in the third. The pest control and hygiene firm said its group adjusted operating margin, adjusted pretax profit before amortisation and its North America adjusted operating margin were all in line with prior guidance. Analysts at Stifel took heart from Rentokil's update. "We view this as a robust trading update, and look forward to more details being provided at the prelims," Stifel said. On the FTSE 250 well received trading updates prompted gains for Computacenter, AG Barr and Pets at Home, which rose 6.1%, 6.7% and 5.4% respectively. Hatfield-based Computacenter gave mixed messages in its update, guiding to profit at the lower end of analyst forecasts alongside a product order backlog "significantly ahead" of 2024. Cumbernauld-based soft drink and energy drink manufacturer AG Barr said Irn-Bru, Rubicon and Boost had all performed strongly in the financial year ending January 25, with Rubicon the stand-out performer. In a trading update, AG Barr said annual revenue is expected to be around GBP420 million, up 5% from GBP400 million a year prior. This is line with company compiled consensus. AG Barr said Rubicon achieved another year of double digit revenue growth. Irn-Bru also delivered strong revenue growth and is now one of the top five carbonates in the UK, the firm said, while Boost gained momentum in the second half with a step up in profitability. At Cheshire's Pets At Home, a forecast of "modest" profit growth during its current financial year was enough to put some energy into the share price. Brent oil was quoted lower at USD77.21 a barrel at the time of the equities close in London on Tuesday, down from USD77.26 on Monday. Gold firmed to USD2,755.79 an ounce against USD2,740.66. Wednesday's global economic calendar sees Australian inflation figures overnight and interest rates decisions in Canada and the US at 1445 and 1900 GMT respectively. Wednesday's local corporate calendar sees a trading update from trading platform AJ Bell. |
Posted at 22/1/2025 21:43 by master rsi MARKET REPORTLONDON MARKET CLOSE: Pound stays above USD1.23 keeping lid on FTSE 100 (Alliance News) - The pound was resilient as nerves over Trump tariffs calmed, putting pressure on a FTSE 100 stacked with international earners and ensuring London's large-cap benchmark was unable to replicate the strong gains seen in European counterparts on Wednesday. The FTSE 100 index fell just 3.16 points at 8,545.13. The FTSE 250 lost 15.43 points, 0.1%, at 20,580.30, and the AIM All-Share ended up 1.89 points, 0.3%, at 721.00. The Cboe UK 100 lost 0.1% at 856.60, the Cboe UK 250 fell 0.2% at 17,962.96, and the Cboe Small Companies ended down marginally at 15,773.05. In European equities on Wednesday, the CAC 40 in Paris ended up 0.9%, while the DAX 40 in Frankfurt shot up 1.0%. Among those putting pressure on the FTSE 100 were brewer Diageo, consumer goods firm Unilever and lender HSBC. The trio, among the FTSE 100's largest firms and earn big chunks of the money in international currencies, fell 1.3%, 1.0% and 0.3%. The pound remained above the USD1.23 on Wednesday, despite some unfavourable data, as markets take the threat of Donald Trump tariffs in their stride. Sterling did surrender some earlier progress but is well off deeper lows under the USD1.22 mark it sank to earlier this week. The pound was quoted at USD1.2317 late on Wednesday afternoon in London, largely flat compared to USD1.2319 at the equities close on Tuesday. It had traded as high as USD1.2375. The euro stood at USD1.0417, where it was a day prior, but off an earlier high of USD1.0475. Against the yen, the dollar was trading higher at JPY156.49 compared to JPY155.43. XTB analyst Kathleen Brooks commented: "As we move into the second Trump era, it is the new US President, and not the Federal Reserve who is dominating market sentiment. His executive orders and investment plans have had the biggest impact on stock markets. So far, he has not spooked markets with tariff threats, or with concerns about the deficit. "Although tariffs have featured heavily in his first few days in office, tariffs for Chinese imports have been milder than feared. Trump is turning his attentions to Canada and Mexico, which could face higher tariffs than China. This is bad news for Mexico and Canada, and the MXN and CAD continue to be big under performers in the FX space so far this week. However, by levying lower tariffs than feared on China, this is less of a threat to global growth, which is more important for risk sentiment and global stock markets." UK public sector net borrowing was much higher than expected in December, figures released by the Office for National Statistics showed on Wednesday. PSNB totalled GBP17.81 billion in December, up from GBP11.8 billion in November. The November figure was revised up from GBP11.25 billion, and the December one far outpaced FXStreet-cited market consensus of GBP13.4 billion. The GBP17.81 billion figure was GBP10.1 billion more than in December 2023 and the highest December borrowing for four years, the ONS noted. Rachel Reeves said she would not apologise for the budget but insisted she would like to see taxes come down. The UK chancellor said she was "absolutely" relaxed about wealth creation and said the government wanted to attract the "highest-skilled" immigrants to the UK despite plans to crack down on the overall number of arrivals. Reeves, who announced GBP40 billion of tax hikes in her first budget, said she would like to bring the overall burden down but she could not yet afford to do so and "I'm not going to make promises that I can't keep". Brent oil was quoted at USD78.31 a barrel late on Wednesday in London, falling from USD79.51 late Tuesday. Gold was higher at USD2,757.82 an ounce against USD2,740.35 on Tuesday. Back on the London Stock Exchange, easyJet fell 5.2%. The budget carrier said results for the winter will reflect "improvements" during the first-quarter ended December 31, offset by "underlying unit revenue trends being modestly lower" in the second-quarter. easyJet said that at this stage of the year, "current booking trends are supportive" of consensus. A company compiled consensus for headline pretax profit is GBP709 million, would be growth of 16% from GBP610 million in the 12 months to September 30, 2024. AJ Bell analyst Russ Mould was not surprised to see the shares coming under duress. "easyJet's update lacked pizzazz. Saying that current booking trends are 'supportive' of full-year market expectations doesn't exactly instil confidence. It's woolly language which doesn't go down well with investors," the analyst said. "Admittedly the airline is only one quarter into its financial year, but the market needs reassurance that everything is going swimmingly for the business given the fragile economic backdrop and weakening consumer confidence. The fact the share price fell on the update suggests investors are disappointed." Hochschild Mining slumped 16%. It said all-in sustaining costs were higher last year, citing a slow ramp-up at Mara Rosa in Brazil's Goias state and higher-than-forecast inflation in Argentina. The miner of silver and gold in Peru, Argentina and Brazil said production rose 16% to 347,374 gold equivalent ounces in 2024 from 300,749 ounces in 2023. In the fourth quarter alone, gold equivalent production rose 15% to 117,230 ounces from 101,590 ounces a year before and 6.4% from 110,180 ounces in the third quarter. For 2025, the company targets a production of 350,000 to 378,000 gold equivalent ounces, between 0.8% and 8.8% higher than in 2024. However, Hochschild expects to report all-in sustaining cost for 2024 to be above guidance of between USD1,510 to USD1,550 per gold equivalent ounce, with that set to increase to between USD1,587 and USD1,687 in 2025. Trainline lost 8.5% as Great British Railways plans came back to haunt the stock. In a statement, the Department for Transport said: "After Great British Railways is established following legislation, it will retail online by bringing together individual train operators' ticket websites." The DfT said it will work alongside a "thriving" private sector retail market, where all rail retailers can compete in an open and fair manner. It stressed the private sector will continue to play a key role in driving growth and encouraging more people to choose rail. Trainline Chief Executive Jody Ford welcomed the "unequivocal commitment to a competitive retail market, underpinned by a level playing field." Nonetheless, investors were spooked and shares in the rail ticketing platform declined. Stocks in New York were higher on Wednesday. The Dow Jones Industrial Average was up 0.1%, the S&P 500 added 0.7%, while the Nasdaq Composite shot up 1.3%. Netflix jumped 11% after the streaming service's earnings impressed overnight. Swissquote analyst Ipek Ozkardeskaya commented: "Netflix blew past the market expectations last quarter and closed the year on a very high note. The company added 18.9 million new subscribers last quarter – its biggest ever quarterly jump in subscriptions. The company added more than 41 mio subscribers over the year and has now more than 300 mio subscribers around the world. And it’s not even due to a pandemic or a temporary situation (like the Squid Game peak). It’s because their strategic bet of streaming major live sport events is paying off and hints at a further upside potential." Thursday's economic calendar has the latest US initial jobless claims reading at 1330 GMT. The local corporate calendar has a trading statement from Primark owner AB Foods. |
Posted at 15/1/2025 13:04 by master rsi MARKET REPORTLONDON MARKET MIDDAY: Stocks stay green thanks to inflation "joy" (Alliance News) - Stock prices in London were mostly higher at midday on Wednesday following the morning's surprisingly substantial slowdown in consumer price inflation. The consumer price index rose 2.5% in December from a year before, slowing from a 2.6% annual increase in November. The FXStreet-cited market consensus had expected inflation to pick up to 2.7%. "A surprise pullback in the rate of [UK] inflation has given joy to investors," commented AJ Bell's Russ Mould. "It strengthens the argument for the Bank of England to continue cutting interest rates and that's fired up shares in housebuilders in the hope that mortgage rates will go down and more people will be able to afford to get onto the housing ladder." He added: "The inflation reading has also helped to lower bond yields, with the 10-year gilt easing back a little to 4.841%, which will be welcomed with open arms by the under-fire chancellor, Rachel Reeves. "However, the prospect of higher costs for companies this year still threatens to drive up inflation if they decide to raise prices, which means people's living standards won't suddenly improve because of today's inflation reading." The FTSE 100 index was up 59.10 points, 0.7%, at 8,260.64. The FTSE 250 was up 280.98 points, 1.4%, at 20,047.25, and the AIM All-Share was up 3.48 points, 0.5%, at 711.29. The Cboe UK 100 was up 0.7% at 828.10, the Cboe UK 250 was up 1.7% at 17,448.24, and the Cboe Small Companies was slightly down at 15,266.90. On the FTSE 100, miner Anglo American was the biggest loser with a 1.7% decrease. "RBC slashed its rating on the mining company to 'underperform'," Mould noted. "Changes to broker ratings have been having a big impact on stocks so far this year as analysts and investors reappraise the outlook for companies and how that relates to equity valuations." On the FTSE 250, Currys jumped 11%. The electricals retailer expects adjusted pretax profit between GBP145 million and GBP155 million for financial 2025, ahead of a company-compiled market consensus of GBP140 million. Also, it continues to expect growth in free cash flow for the year. Reflecting the strong cash flow performance and continued business momentum, Currys intends to resume dividend payments, with a final dividend of around 1.3 pence per share expected to be announced alongside full-year results in July. "The true sign of a turnaround story reaching its maturity is the resumption of dividends and Currys has finally reached this status," Mould said, adding: "In an environment where consumers continue to watch every penny, it's impressive that Currys has managed to report a good festive trading period...Currys has also cemented its reputation as the go-to place to get help when technology goes wrong." Among small caps, fast fashion retailer Asos was up 4.5%. "Asos continues to reshape its business after going off the boil in recent years," Mould commented. "A US distribution centre will be mothballed as it revamps its network for getting products from A to B. While this involves writing off a significant amount of money already spent on the facility, investors won't be surprised given it is having to make tough decisions to get the business back on track." In other UK news, annual house price growth in the UK accelerated to reach 3.3% in November from 3.0% in October, Office for National Statistics data showed. This took the average UK property value in November to GBP290,000. In the 12 months to November 2024, average house prices increased 3.0% on-year in England to GBP306,000, by the same rate in Wales to GBP219,000, and by 4.7% in Scotland to GBP195,000, 4.7%. "With mortgage rates still elevated, all eyes will be on the Bank of England, with many hoping for a rate cut at the next meeting in February," said Iain McKenzie, chief executive of the Guild of Property Professional. "This should spur sentiment in the market and will hopefully have a knock-on effect on mortgage rates. Many are expecting a few rate cuts throughout 2025, but the frequency will depend on inflation playing its part." In European equities on Wednesday, the CAC 40 in Paris was up 0.4%, while the DAX 40 in Frankfurt was up 0.7%. France's CPI was up 1.3% on-year in December, leaving the pace of inflation unchanged from November. On a harmonised level, allowing for EU-wide comparison, annual CPI inflation picked up to 1.8% in December from 1.7% in November. Germany's economy shrank a bit less in 2024 than in 2023, data published by the Federal Statistical Office showed. In 2024, gross domestic product declined by 0.2%, in line with the FXStreet-cited consensus, slowing from a fall of 0.3% in 2023. The pound was quoted higher at USD1.2227 at midday on Wednesday in London, compared to USD1.2202 at the equities close on Tuesday. The euro stood slightly higher at USD1.0304, against USD1.0295. Against the yen, the dollar was trading lower at JPY156.90 compared to JPY157.95. Stocks in New York were called higher. The Dow Jones Industrial Average, the S&P 500 index and the Nasdaq Composite were all called up 0.2%. "Donald Trump's return to the White House next week has major implications for people's money," said AJ Bell's Dan Coatsworth. "Whether that's investments in the stock market, government bonds, cash in the bank and even holiday money, his policies have far-reaching consequences." He noted: "The US stock market initially responded favourably to the election result last November but recent headwinds have curtailed some of the Trump-related gains...There is a big risk that investors have now priced in a lot of potential good news and that markets don't do as well once Trump is back in power." Coatsworth continued: "Tariffs are the big unknown with regards to Trump...The latest speculation is that [his] economic team might consider a ramp-up in trade tariffs rather than going straight in guns a-blazing. Markets would like such an approach as it gives companies on the receiving end of tariffs more time to consider their options, and it could also mean a slower increase in inflation." Brent oil was quoted lower at USD79.37 a barrel at midday in London on Wednesday from USD79.84 late Tuesday. Gold was quoted higher at USD2,685.65 an ounce against USD2,673.07. Still to come on Wednesday's economic calendar are three US releases, the most notable of which is consumer price inflation. |
Posted at 13/1/2025 12:58 by master rsi MARKET REPORTLONDON MARKET MIDDAY: Stocks stay red as UK inflation data nears (Alliance News) - Stock prices in London were lower midday on Monday, as pressure increases on UK Chancellor Rachel Reeves. A survey of UK chief financial officers by consultancy Deloitte found a net 26% felt more pessimistic about their businesses than they did three months ago. However, sentiment is still well above the lows seen during the Covid-19 pandemic and in 2022 during Liz Truss's brief premiership. Also, Reeves returned from her trip to China as concerns swirled that the government is in danger of failing to meet its own fiscal rules and will need to take action to remain on track. Reeves however insisted over the weekend that those fiscal rules are "non-negotiable". "Gilt yields continued to creep higher as the market fretted about Rachel Reeves’ spending plans and borrowing requirements," commented AJ Bell's Russ Mould, who added: "The higher the yields go, the higher the cost of borrowing for the government and the greater the likelihood that we’ll see spending cuts to public services. "The number of stocks falling on the FTSE 100 outnumbered the risers two-to-one as investors reassessed their portfolios. Technology, industrials, healthcare and consumer stocks were firmly out of favour, while commodities, utilities and real estate shone. Those movements are what you might expect when investors believe inflationary pressures are going to intensify." Those investors' eyes will therefore be on Wednesday, when UK consumer and producer price inflation data are scheduled for release. The FTSE 100 index was down 33.52 points, 0.4%, at 8,214.97. The FTSE 250 was down 44.20 points, 0.2%, at 19,689.74, and the AIM All-Share was down 1.91 points, 0.3%, at 711.47. The Cboe UK 100 was down 0.4% at 823.46, the Cboe UK 250 was down 0.4% at 17,121.59, and the Cboe Small Companies was up 0.3% at 15,320.91. In large caps, Entain gained 2.5%, down from an early-morning high of 682.40 pence each. The Isle of Man-based bookmaker said loss before interest, tax, depreciation and amortisation is expected to be around USD250 million at the BetMGM business for financial 2024. However, Entain expects group Ebitda to be "at the top" of the GBP1.04 billion to GBP1.09 billion guidance range, owing to "operator friendly" results in the fourth quarter. "Rather than deliver the bad news investors had expected, Entain...took the market by surprise and triggered a surge in the share price," Mould said. However, he added: "Entain might have scored the winning goal in recent months, but its share price has more than halved since 2021 which implies something drastic needs to be done to revive its fortunes and win back the market’s favour. Today’s trading update is a good start, but the market will need more good news rather than a stroke of luck." On the FTSE 250, Serco lost 1.9%. The Hampshire, England-based provider of services to governments has promoted Anthony Kirby to chief executive, starting on March 1 and replacing Mark Irwin. Kirby is currently CEO of Serco's largest division, UK & Europe, while Irwin has been with Serco for 12 years - although Mould noted that he served "only two years in the [CEO] job". "His predecessor Rupert Soames did a brilliant job turning around the company and Irwin kept things ticking over, but to leave after such a short time seems odd," Mould said, adding: "It will be interesting to see the scale of Kirby’s ambitions and whether he has bold plans to take Serco to the next level." Among smaller caps, Eagle Eye Solutions plummeted 23%. The London-based software-as-a-servic However, it also said group revenue increased by 0.4% on-year in its first half to GBP24.2 million, with SaaS revenue growing 10% to GBP19.5 million, although Professional Services revenue was down 16% to GBP4.4 million from GBP5.2 million. Blue Star Capital soared 74%. The Crawley, England-based investing company, which is focused on the esports and blockchain industries, reports that SatoshiPay Co-Founder Meinhard Benn - through Pinnow, Germany-based Flakenwerder Investment UG - holds an 8.34% stake in Blue Star as of Wednesday, January 8, up from none reported. In European equities on Monday, the CAC 40 in Paris was down 0.9%, while the DAX 40 in Frankfurt was down 0.8%. The pound was quoted lower at USD1.2133 at midday on Monday in London, compared to USD1.2200 at the equities close on Friday. Sterling last week hit its lowest level against the dollar since November 2023, with government borrowing costs rising ever higher. UK government bonds – also known as gilts – continued to see 10-year yields hit fresh highs not seen since 2008, up six basis points at 4.9%. The yield on 30-year gilts also hit new 27-year highs, up five basis points at 5.5%. The euro stood at USD1.0198, down against USD1.0233. Against the yen, the dollar was trading lower at JPY157.27 compared to JPY157.81. Stocks in New York were called lower. The Dow Jones Industrial Average was called down 0.4%, the S&P 500 index down 0.8%, and the Nasdaq Composite down 1.2%. Brent oil was quoted higher at USD80.52 a barrel at midday in London on Monday from USD78.61 late Friday. Gold was quoted lower at USD2,678.91 an ounce against USD2,690.05. Still to come on Monday's economic calendar are the consumer inflation forecast and the monthly budget statement from the US. |
Posted at 06/1/2025 13:39 by master rsi MARKET REPORTLONDON MARKET MIDDAY: Stocks mixed while UK firms warn of price rises (Alliance News) - Stock prices in London were mostly higher at midday on Monday, with investors mostly awaiting US inflation data in the afternoon. As well as Monday's composite and services PMI readings, the first full trading week of 2025 has various jobs data releases from the US culminating in Friday's nonfarm payrolls. More than half of UK companies plan to raise prices by early April, according to research by the British Chambers of Commerce. A survey of more than 4,800 firms found that 55% of them expect prices to increase in the next three months, up from 39% in a similar poll in the second half of 2024. The survey also found business confidence has fallen since the spending statement, with 49% of firms saying they expect turnover to grow in the next year, down from 56% last year. The group's Director General Shevaun Haviland, called the situation "a pressure cooker of rising costs and taxes". "Last year's changes to the UK listing rules should make it more attractive for companies to list in London, which explains the widely held view that 2025 will be a much better year for IPOs," AJ Bell analyst Russ Mould commented. "However, with business sentiment currently weak due to government decisions in the budget, we may have to wait until the second half of the year before the pace of UK IPOs starts to accelerate. Businesses are still getting their heads around new cost pressures and solutions need to be found before they rush into a stock market listing." The UK service sector remained in growth territory in December, numbers on Monday showed, though it was a largely tepid final quarter of the year. The S&P Global UK service purchasing managers' index rose to 51.1 points in December, showing accelerated growth from 50.8 in November but below the flash estimate of 51.4. "Meanwhile, survey respondents were still cautious about the outlook for business activity in 2025...Service providers widely commented on concerns about cutbacks to business and consumer spending, alongside the impact of rising employers' national insurance contributions," S&P Global said. The FTSE 100 index was up 10.62 points, 0.1%, at 8,234.60. The FTSE 250 was up 109.86 points, 0.5%, at 20,701.26, and the AIM All-Share was up 3.44 points, 0.5%, at 728.84. The Cboe UK 100 was up 0.1% at 825.75, the Cboe UK 250 was up 0.6% at 18,110.04, and the Cboe Small Companies was up 0.1% at 15,936.38. Intermediate Capital led the FTSE 100, up 2.9%. Experian was also among the winners, up 1.4%. RBC raised Experian to 'outperform' from 'sector perform' with a price target of 4,200 pence. WPP and Unilever were the biggest losers, down 3.1% and 2.1% respectively. UBS raised WPP's price target to 720 from 680 pence, keeping its 'sell' recommendation. RBC cut Unilever to 'underperform' from 'sector perform' with a price target of 4,000 pence, cut from 4,800p. "The FTSE 100 started the week on the back foot, dragged down by consumer non-cyclicals, basic materials and industrials," AJ Bell's Mould commented. "Share price weakness in big brand companies including Unilever, Reckitt and Haleon is often a signal that investors are worried about consumer spending and growing inflationary pressures. Renewed cost pressures may prompt companies to hike prices and this could see shoppers switch to cheaper supermarket own-brand items. It's a major risk for investors in big brand stocks to consider. "Driving down the shares in the sector this time was negative broker comment as RBC downgraded Unilever to 'underperform', which hurt the Marmite maker and took its big brand peers down at the same time." Ferrexpo led the FTSE 250, up 6.4%. Bytes Technology came second, up 3.3%. Investec started its Bytes Technology ratings with 'buy' and a price target of 600 pence. Raspberry Pi was the biggest loser, down 3.6%. Diversified Energy was also in the red, down 2.5%. The Birmingham, Alabama-based natural gas producer on Monday said it has acquired natural gas properties from Summit Natural Resources for around USD45 million. The deal is expected to close during the first quarter of 2025. The facilities have a current net production of around 12 million cubic feet equivalent per day and existing coal mine methane volumes with the opportunity to extend production, and 300 wells in Appalachia overlap with existing operations which allows for increased cash margins. The company said it has an estimated 2025 adjusted earnings before interest, tax, depreciation and amortisation of USD12 million. Among smaller caps, THG was up 9.9%. The e-commerce firm announced that the Financial Conduct Authority has approved the transfer of its listing category to the equity shares (commercial companies) category, effective from Monday. This will make THG eligible for FTSE UK index inclusion. Gresham House Energy Storage Fund gained 6.3%. The London-based fund investing in utility-scale battery energy storage systems said trading has improved and it has made "solid progress", adding that it expects full-year operational portfolio revenues of around GBP42 million. It sees operational portfolio earnings before interest, tax, depreciation and amortisation of around GBP29 million in 2024, up from GBP25.8 million in 2023. In European equities on Monday, the CAC 40 in Paris was up 1.1%, while the DAX 40 in Frankfurt was up 0.8%. The pound was quoted higher at USD1.2536 at midday on Monday in London, compared to USD1.2414 at the equities close on Friday. The euro stood at USD1.0416, higher against USD1.0297. Against the yen, the dollar was trading flat at JPY157.31 compared to JPY157.33. Stocks in New York were called higher. The Dow Jones Industrial Average was called up 0.1%, the S&P 500 index up 0.5%, and the Nasdaq Composite up 0.8%. Shortly before the end of his term in office this month, US President Joe Biden is pushing through far-reaching protections of US waters from further oil and gas extraction. The two "presidential memoranda" issued on Monday exempt all areas of the outer continental shelf off the east and west coasts of the country, the eastern Gulf of Mexico and other parts of the northern Bering Sea in Alaska from future oil and gas production. They will be in force indefinitely. Brent oil was quoted at USD76.50 a barrel at midday in London on Monday, up from USD76.33 late Friday. Gold was quoted higher at USD2,644.65 an ounce, higher against USD2,641.67. Still to come on Monday's economic calendar are the composite PMI, services PMI and factory order readings from the US this afternoon. |
Posted at 02/1/2025 22:34 by master rsi MARKET REPORTLONDON MARKET CLOSE: Pound sinks but FTSE 100 starts 2025 with a bang (Alliance News) - London's FTSE 100 made an impressive start to the new year, shrugging aside drab manufacturing data, lifted by rising oil majors, gold miners and retailers. The FTSE 100 index ended up 87.07 points, 1.1%, at 8,260.09. The FTSE 250 rose 17.62 points, 0.1%, at 20,640.23. The AIM All-Share jumped 4.07 points, 0.6%, at 723.70. The Cboe UK 100 closed up 1.1% at 827.66, the Cboe UK 250 fell 0.2% at 18,028.35, while the Cboe Small Companies advanced 0.3% to 15,967.18. In Paris, the CAC 40 reversed early heavy losses to close 0.2% higher on Thursday, while the Dax in Frankfurt advanced 0.5%. In New York, markets were higher. At the time of the London close, the Dow Jones Industrial Average was up 0.2%, the S&P 500 was 0.3% higher and the Nasdaq Composite was 0.4% to the good. Figures showed the US labour market remains robust while manufacturing activity, although weak, ticked up from an earlier estimate. The seasonally adjusted S&P Global US manufacturing purchasing managers' index fell to 49.4 in December, down from 49.7 in November. But December's reading was better than the preliminary "flash" estimate of 48.3, although it marked the sixth consecutive month of contraction. Meanwhile, data showed weekly jobless claims, considered a proxy for lay-offs, fell by more than expected, allaying fears of a slowing jobs market. According to the Department of Labor, in the week ending December 28, the advance figure for seasonally adjusted initial claims was 211,000, a decrease of 9,000 from the previous week's revised level. The previous week's level was revised up by 1,000 from 219,000 to 220,000. FXStreet consensus was for a slight increase to 222,000 in the most recent week. The 4-week moving average was 223,250, a decrease of 3,500 from the previous week's revised average. The previous week's average was revised up by 250 from 226,500 to 226,750. Nancy Vanden Houten at Oxford Economics said the claims data are consistent with a labour market that is "strong enough to allow the Federal Reserve to proceed with rate cuts at a more measured pace in 2025". "The level of initial claims is consistent with a relatively low pace of layoffs, and while the level of continued claims suggests unemployed workers face some challenges finding new work, the recent decline in continued claims is encouraging. Our baseline is for three rate cuts this year, although the risk following the mid-December FOMC meeting is for fewer cuts." The pound was lower at USD1.2378 on Thursday afternoon, from USD1.2535 at the time of the local equities close on Tuesday, its lowest level since last April. The euro slid to USD1.0251 against USD1.0402. Versus the yen, the dollar was higher at JPY157.63 from JPY156.74. On London's FTSE 100, gold miners Fresnillo and Endeavour Mining rose 4.5% and 4.9% respectively after fresh gains in the price of the yellow metal. Oil majors BP and Shell climbed 2.6% and 2.3% respectively, tracking a rise in the price of Brent crude. A barrel of Brent rose to USD76.43 on Thursday afternoon, from USD74.21 at the time of the London equities close on Tuesday. Gold jumped to USD2,657.49 an ounce from USD2,610.61. Marks & Spencer rose 3.7% on speculation the retailer has enjoyed a strong Christmas. Next was also in demand, up 2.1%. Both retailers will issue Christmas trading statements next week. Russ Mould, investment director at AJ Bell said: "Judging by its share price jump, investors are putting their money on Marks & Spencer to have cleaned up over the festive season. There were already reports pre-Christmas that shoppers were loading up their baskets with Marks & Spencer's premium-quality food and drink products, and its clothes were such a big hit with the nation during 2024 that it seems logical to suggest many people gifted them on December 25." Investors also weighed data showing the UK manufacturing sector downturn deepened more sharply than expected in December, with the fastest rate of decline since last January. According to S&P Global, the UK manufacturing purchasing managers' index fell to an 11-month low of 47.0 in December, from 48.0 in November. The final reading was below the flash estimate of 47.3 points. Survey respondents pointed to depressed market confidence and restructuring in response to upcoming increases to the minimum wage and employers' national insurance contributions. But Elliott Jordan-Doak at Pantheon Macroeconomics struck an optimistic note. "Despite the weakness in the manufacturing PMI in December, we think that it will steadily improve in 2025. Businesses have been rocked by domestic policy changes in the form of NICs hikes, and external shocks in the form of the threat of a global trade war. But, the budgetary plans are for more spending than taxation, which will mechanically lift the PMI. What's more the focus on investment in the budget should help the manufacturing sector. The [Monetary Policy Committee] will also cut rates in 2025, which will reduce borrowing costs for firms and should boost sentiment. We expect three cuts in 2025, one more than the market is currently priced for." The picture was no brighter in Europe where a report showed the eurozone manufacturing sector remained in decline. The Hamburg Commercial Bank purchasing managers' index fell to 45.1 points in December, from 45.2 in November. The latest figure was further below the 50-point neutral mark and was a three-month low. "The year was closed off with accelerated contractions in both new orders and output, while sharp reductions were made to purchasing activity and inventories of inputs. Factory employment levels also continued on a downward trend, but there was a modest improvement in business confidence as growth expectations hit a four-month high," S&P Global said. On a quiet day for company news, Revolution Beauty shot up 31%, after a claim by Chrysalis Investments was settled. Chrysalis traded down 2.1%. Chrysalis, a former shareholder in the beauty products seller, said Revolution will pay "a non-material sum". The figure is less than 1% of the Chrysalis market capitalisation of around GBP613.3 million at the time of Tuesday's close in London. Analysts at Panmure Liberum said: "We think this removes a significant risk [for Revolution] that had previously stopped potential new investors in the shares. With Chrysalis being one of the biggest investors in Revolution Beauty at the time of IPO, we believe this outcome draws a line in the sand for any similar claims as they are unlikely to be worthwhile. While there is still an on-going Financial Conduct Authority investigation, the settlement with Chrysalis makes the investment case much simpler at a time when the business is turning a corner." Elsewhere, shares in Poolbeg Pharma slumped 38% after it said it was in talks regarding an all-share combination with US-listed biopharmaceutical company Hookipa Pharma. Emmerson leapt 20% after securing a USD11 million litigation funding deal which it said "secures the medium-term future of the company." On Friday, the ISM manufacturing PMI will be the highlight of the global economic calendar. The corporate diary is empty. |
Posted at 02/1/2025 12:58 by master rsi MARKET REPORTLONDON MARKET MIDDAY: Gold, oil supports FTSE 100; pound takes a fall (Alliance News) - Stocks in London were mixed around midday on Thursday with rising commodity prices boosting gold miners and oil majors, helping to offset falls for banks and airlines. The FTSE 100 index traded up 9.94 points, 0.1%, at 8,182.96. The FTSE 250 was down 78.07 points, 0.4%, at 20,544.54, and the AIM All-Share was up 2.45 points, 0.3%, at 722.08. The Cboe UK 100 was up 0.2% at 820.39, the Cboe UK 250 was down 0.4% at 17,988.12, and the Cboe Small Companies rose 0.3% at 15,965.57. On London's FTSE 100, gold miners Fresnillo and Endeavour Mining rose 2.6% and 2.1% respectively after fresh gains in the price of the yellow metal. Gold traded at USD2,641.38 an ounce on Thursday lunchtime, rising from USD2,619.91 at the time of the London close on Tuesday. Oil majors BP and Shell climbed 1.2% and 1.0% respectively, tracking a rise in the Brent price. A barrel of Brent oil climbed to USD75.61 midday Thursday from USD74.21 on Tuesday. But the rising oil price saw airlines trade in the red with British Airways owner IAG, down 2.4%, and budget airline easyJet losing 1.7%. Also heading lower were banks with Barclays down 1.8% and NatWest losing 1.2%. Weak Asian markets on the back of disappointing data from China saw HSBC and Standard Chartered 1.6% and 1.5% lower. Marks & Spencer rose 1.6% on speculation the retailer has enjoyed a strong Christmas. Russ Mould, investment director at AJ Bell, said: "Judging by its share price jump, investors are putting their money on Marks & Spencer to have cleaned up over the festive season. There were already reports pre-Christmas that shoppers were loading up their baskets with Marks & Spencer’s premium-quality food and drink products, and its clothes were such a big hit with the nation during 2024 that it seems logical to suggest many people gifted them on 25 December." Investors also weighed data showing the UK manufacturing sector downturn deepened more sharply than expected in December, with the fastest rate of decline since last January. According to S&P Global, the UK manufacturing purchasing managers' index fell to an 11-month low of 47.0 in December, from 48.0 in November. The final reading was below the flash estimate of 47.3 points. Survey respondents pointed to depressed market confidence and restructuring in response to upcoming increases to the minimum wage and employers' national insurance contributions. But Elliott Jordan-Doak at Pantheon Macroeconomics struck an optimistic note. "Despite the weakness in the manufacturing PMI in December, we think that it will steadily improve in 2025. Businesses have been rocked by domestic policy changes in the form of NICs hikes, and external shocks in the form of the threat of a global trade war. But, the budgetary plans are for more spending than taxation, which will mechanically lift the PMI. What’s more the focus on investment in the budget should help the manufacturing sector. The [Monetary Policy Committee] will also cut rates in 2025, which will reduce borrowing costs for firms and should boost sentiment. We expect three cuts in 2025, one more than the market is currently priced for." The picture was no brighter in Europe where a report showed the eurozone manufacturing sector remained in decline. The Hamburg Commercial Bank purchasing managers' index fell to 45.1 points in December, from 45.2 in November. The latest figure was further below the 50-point neutral mark and was a three-month low. "The year was closed off with accelerated contractions in both new orders and output, while sharp reductions were made to purchasing activity and inventories of inputs. Factory employment levels also continued on a downward trend, but there was a modest improvement in business confidence as growth expectations hit a four-month high," S&P Global said. In Europe, the CAC 40 in Paris was down 1.2%, and the DAX 40 in Frankfurt was 0.3% lower. In contrast, markets in New York are expected to start the New Year on the front foot. The Dow Jones Industrial Average is called up 0.5%, the S&P 500 up 0.6% and Nasdaq Composite up 0.8%. The pound was quoted at USD1.2443 at Thursday lunchtime, down from USD1.2535 at the time of the London equities close on Tuesday. The euro was lower at USD1.0323 from USD1.0402. Against the yen, the dollar rose to JPY157.20 from JPY156.74. Back in the UK, annual UK house price growth accelerated last month, in a strong end to the year, according to figures from Nationwide. House prices rose 4.7% on-year in December, picking up speed from a 3.7% rise in November. On-month, prices rose 0.7% in December, after a 1.2% rise in November from October. "Mortgage market activity and house prices proved surprisingly resilient in 2024 given the ongoing affordability challenges facing potential buyers. At the start of the year, house prices remained high relative to average earnings, which meant that the deposit hurdle remained high for prospective first-time buyers. This is a challenge that had been made worse by record rates of rental growth in recent years, which has hampered the ability of many in the private rented sector to save," Nationwide analyst Robert Gardner said. Housebuilders gave a muted response to the data. Barratt Redrow eased 0.6% but Taylor Wimpey rose 0.1%. On a quiet day for company news, Revolution Beauty shot up 33%, after a claim by Chrysalis Investments was settled. Chrysalis traded down 1.6%. Chrysalis, a former shareholder in the beauty products seller, said Revolution will pay "a non-material sum". The figure is less than 1% of the Chrysalis market capitalisation of around GBP613.3 million at the time of Tuesday's close in London. Analysts at Panmure Liberum said: "We think this removes a significant risk [for Revolution] that had previously stopped potential new investors in the shares. With Chrysalis being one of the biggest investors in Revolution Beauty at the time of IPO, we believe this outcome draws a line in the sand for any similar claims as they are unlikely to be worthwhile. While there is still an on-going FCA investigation, the settlement with Chrysalis makes the investment case much simpler at a time when the business is turning a corner." Elsewhere, shares in Poolbeg Pharma slumped 35% after it said it was in talks regarding an all-share combination with US-listed biopharmaceutical company Hookipa Pharma. Under the proposed terms, shareholders in the London-based clinical stage biopharmaceutical firm would receive 0.03 Hookipa shares for each Poolbeg share. This would leave Poolbeg with 55% of the enlarged company with co-founder Cathal Friel becoming executive chair. Hookipa plans a USD30 million fundraise on completion of the deal. This would dilute Poolbeg's stake in the combined firm to just over 40%, with Hookipa holding around 33% and new investors about 27%. Poolbeg is expected to become a private subsidiary of Hookipa and apply for the cancellation of its shares to trading on AIM. Hookipa, which is based in New York and Austria, intends to retain its listing on Nasdaq. Emmerson jumped 27% after it signed a deal with a specialist litigation funding firm to secure USD11.0 million in financing. The funding will go towards a dispute with the government of Morocco. The dispute, the Morocco-focused potash development company explained in November, arose from "various breaches" to the bilateral investment treaty signed in 1990 between the UK and Morocco for the promotion and protection of investments, which came into force in 2002. Still to come, US initial jobless claims data at 1330 GMT and US manufacturing PMI figures at 1445 GMT. |
Posted at 01/1/2025 21:27 by master rsi If interested in buying shares by their valuation what to use?Three key measures every stock investor should know – price-to-earnings (PE) ratio, price-to-earnings growth (PEG) ratio, and price-to-book (PB) ratio. 1 - Price-to-earnings ratio The PE ratio is one of the most widely used tools to evaluate a company’s share price compared to its earnings. It tells you how much investors are willing to pay for every £1 of a company’s profit. A lower PE might suggest a stock is undervalued or that its growth prospects are limited. A higher PE can indicate the stock is expensive, investors expect strong growth in the future, or that earnings are high quality. 2- Price-to-earnings growth ratio The PEG ratio takes the PE ratio one step further by factoring in a company’s expected growth rate. While a stock might look expensive based on its PE, its growth prospects can sometimes justify the higher price. A PEG ratio below one is generally seen as good value, suggesting the stock is good value relative to its growth. A PEG ratio above one means the stock might be overvalued relative to its growth rate. The PEG ratio is particularly useful for growth stocks, where higher PE ratios are common. For instance, technology companies often trade at high PE levels, but their rapid growth can make them attractive investments when the PEG ratio is reasonable. 3 - Price-to-book ratio The PB ratio is another key measure that compares a company’s market value to its ‘book value’, which is essentially the net worth of its assets after liabilities. A PB ratio below one could indicate the stock is undervalued, or that investors are wary about its prospects. A higher PB ratio could reflect strong market confidence in the company’s future growth. The PB ratio is particularly useful for industries like banking and manufacturing, where cash and physical assets like property and equipment play a major role. |
Posted at 28/12/2024 16:16 by master rsi THG share price: shareholders vote to spin off ecommerce platformThe Times - Helen Cahill,- Friday December 27 2024, 5.00pm, The demerger is part of a plan to streamline Matthew Moulding’s beauty and wellness group and revive its share price, which has slumped since its IPO The spin-off will leave THG a simpler business focused on retail, with brands such as Illamasqua make-up THG Shareholders in Matthew Moulding’s beauty and wellness business have voted in favour of a plan to spin off its Ingenuity ecommerce platform at a valuation of £90 million. THG, formerly known as The Hut Group, will press ahead with a divestment of its technology platform after 89 per cent of voting shareholders backed the plan at a general meeting on Friday. Ingenuity provides technology to support the online operations of retailers including Holland & Barrett, The Range and L’Oréal. The division has 13 distribution centres and employs about 3,500 people. THG launched a funding round to raise capital of £95.4 million to fund the transaction, and has secured debt funding of £55 million. The company has told investors the money will be used to fund Ingenuity until its operations are no longer lossmaking. The technology platform made a loss of £140.9 million in the year ending June 30, compared with a loss of £227.6 million in the previous 12 months. Revenues for the division fell from £712.3 million to £671.4 million over the 12-month period. Mike Ashley’s retail conglomerate has taken a stake in Ingenuity by investing in THG’s fundraiser in October. Frasers Group, which owns Flannels, House of Fraser and Sports Direct, made a strategic investment of £10 million. THG also brought in funding from new shareholders and longstanding investors. Moulding co-founded THG in 2004 and listed the group on the London stock market at a £5.4 billion valuation in 2020. The company has come under pressure from activist investors to break up its business divisions following a substantial fall in its share price since its initial public offering. The demerger of Ingenuity will help to reduce THG’s debt burden as lease liabilities of £298 million will transfer to the spun-off entity. Announcing details of the transaction in November, THG said: “The demerger simplifies THG’s business model as a free cash-flow generative consumer, beauty and nutrition group, with an improved balance sheet, capital expenditure and cash-flow profile. “The board believes that there is a significant opportunity to create value for shareholders by demerging Ingenuity into a separate private company with no public listing or other trading facility for the Ingenuity shares.” |
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