- FTSE 100 finishes 3 points higher
- US stocks hold gains as services PMI data holds firm
- Shell boss reviewing plans to cut oil and gas output
4.40pm: FTSE holds head above water
At the close, the FTSE 100 was just about back where it began the day at 7,947 points.
The FTSE100 has underperformed its European peers today largely due to weakness in the energy sector which is offsetting the gains in basic resources, noted CMC's Michael Hewson, with BP and Shell sliding back.
"The general mood has also been helped by better-than-expected economic reports, which while raising concerns about further rate hikes, have also helped to create a mood that the economic picture may not be as dire as had been predicted at the start of the year," Hewson said.
3.50pm: Thanks for your services
The US Institute for Supply Management's (ISM) non-manufacturing purchasing managers' index (PMI) held firm at 55.1 in February, better than consensus expectations for a deceleration to 54.5
A PMI reading above 50 signifies monthly expansion, a number below that level indicates activity in the sector contracted from the prior month.
New orders in the US services sector jumped, employment stepped back into expansion territory, and the prices paid component - an inflation indicator - fell 1.8 points to a still-elevated 65.6.
"Business Survey Committee respondents indicated that they are mostly positive about business conditions," said Anthony Nieves, chair of ISM's services business survey. "Suppliers continue to improve their capacity and logistics, as evidenced by faster deliveries. The employment picture has improved for some industries, despite the tight labor market."
S&P Global also released its final take on services PMI, which it revised slightly higher from its initial reading release a few weeks ago to 50.6.
"A return to growth of US service sector business activity in February for the first time in eight months has offset a decline in manufacturing output, helping stabilize the economy and hopefully avert a downturn in the first quarter," says Chris Williamson, chief business economist at S&P Global.
The mood in New York market remained upbeat as the Friday morning session progressed, with the Dow Jones Industrial Average ahead 125 points or 0.4% at 33,129 points, the S&P 500 was up 0.8%, and the Nasdaq Composite rose 1.2%.
In London, around 3.50pm, the FTSE 100 index was still about 4 points, or 0.05% lower at 7,940, staying above the day's low of 7,920.07.
3.35pm: Good news for Barclays boss
Barclays has revealed that its chief executive C.S. Venkatakrishnan has completed treatment for non-Hodgkin lymphoma, a type of cancer, and is now in remission.
"I am pleased to inform you that I have completed the treatment for non-Hodgkin lymphoma that I commenced last November. I am now in remission (no evidence of disease)," Venkatakrishnan told colleagues in a letter, according to a brief statement from the bank on Friday.
The CEO had previously said in November that doctors viewed his prognosis as "excellent" and that he would keep working when possible, while receiving treatment in New York.
Venkatakrishnan's letter noted: "Over the coming weeks, I plan to be working more from the office, and ultimately resuming travel."
"I am very grateful for the care I have received," he added. "As always, I encourage you to pay close attention to your physical and mental wellbeing. If you or eligible members of your family have been diagnosed with cancer, please do make use of the support we provide to employees worldwide."
3.15pm: Arm wrestle over
The London Stock Exchange said on Friday that chip designer Arm's decision to pursue a US-only listing this year rather than return to London's stock market showed Britain needed to speed up plans for regulatory and market reforms, Reuters reported.
Arm, owned by Japan's SoftBank, is to pursue a U.S.-only listing this year, dashing the British government's hopes that the tech giant would choose London.
"Arm is a great British company and a world leader in their field which we continue to believe can be very well served by the UK capital markets," said Julia Hoggett, chief executive of London Stock Exchange plc, part of London Stock Exchange Group told Reuters. "The announcement demonstrates the need for the UK to make rapid progress in its regulatory and market reform agenda, including addressing the amount of risk capital available to drive growth."
Arm has not completely ruled out an eventual London listing and has said it intends to consider a subsequent IPO there in due course, without providing further details.
Arm, based in Cambridge in east England, was listed on the London market for 18 years until it was bought by SoftBank in 2016 in a $32 billion deal.
2.50pm: Signs of life
The FTSE 100 index pushed back into the green as US stocks kicked off the final session of the trading week higher with investors digesting commentary from Federal Reserve policymakers ahead of the release of February’s ISM non-manufacturing purchasing managers index (PMI).
Around 20 minutes after the New York market opened, the Dow Jones Industrial Average had added 133 points or 0.4% at 33,137 points, the S&P 500 was up 0.7%, and the Nasdaq Composite had gained 1.0%.
FOREX.com market analyst Fiona Cincotta noted that the USD was falling after investors focused on the more dovish comments from Fed President Bostic, who suggested that the tightening cycle could be paused by the summer.
“More US Federal Reserve speakers are also set to hit the airwaves at various times across the session. These include Dallas Fed President Lori Logan and Richmond Fed President Ton Barkin, among others,” she said. “ISM services data and Fed speakers will drive trade.”
Cincotta added that should the ISM service PMI for February show a larger-than-forecast decline, this could calm hawkish Fed bets and support stocks.
Around 2.40pm in London, the FTSE 100 index was 4 points, or 0.05% higher at 7,948, bouncing off the day's low of 7,920.07
2.35pm: Hunt Energy Price No-Brainer
Commenting on reports that the Government is expected to extend the Energy Price Guarantee, Laura Suter, head of personal finance at AJ Bell said: "It’s a no-brainer for Jeremy Hunt to extend the Energy Price Guarantee for another few months, until energy prices fall further. The plan to make the Energy Price Guarantee less generous at the same time as the Government stops the monthly rebate we’ve all been getting off our bills would have landed the average household with an extra £900 on their annual fuel bills in one swipe.
“Wholesale energy prices are falling anyway, meaning that the plans to delay the increase in the Energy Price Guarantee from £2,500 to £3,000 should mean that by the time it kicks in energy prices will be lower anyway. The move is expected to cost the Government around £3bn, but falling wholesale energy prices mean the so far Energy Price Guarantee hasn’t cost the Government as much as expected, providing it with some wiggle room to extend support now. There’s no doubt that Jeremy Hunt would have preferred to unveil the measure during his upcoming Budget, to provide the much-anticipated rabbit out of the hat to grab headlines. But the practicalities of energy companies needing to get their systems in order and notify customers could well put that out of his reach."
She added: “It’s a confusing situation for billpayers, who are having to keep track of two price capping systems: Ofgem’s energy price cap and the Government’s Energy Price Guarantee. The hope is that by the next Ofgem announcement the price cap will have dropped below the Government’s £3,000 guarantee and average bills will be cheaper than that anyway. However, the past few years have taught us not to rely on predictions and there’s certainly no guarantee energy prices will drop that far.
“While the move will protect average households from an extra £500 on their annual bills, it still remains the case that energy bills will cost us all more. The £400 off bills the Government has been dishing out this winter, to the tune of around £66 a month, will still end in April. At the same time, the Cost of Living support payments for those on certain benefits is less generous this year than it was last year – which all adds up to bigger bills.
“The news will disappoint some campaigners who argued that the universal energy support should be ditched and more support offered to those on the lowest incomes. By scrapping the Energy Price Guarantee far more help per household could be offered to the poorest in society who are struggling the most with their bills. But if he extends support for all Mr Hunt will have gone for the popular vote, rather than the more targeted help.”
2.20pm: Cheers for beers
The beer market is set for strong growth in 2023, according to analysts at broker Jefferies after three of the world's largest brewers - Carlsberg, Heineken, and Anheuser-Busch InBev - released upbeat results.
“We like beer as it is resilient in a weaker consumer environment and valuations are favourable,” said the US bank's analysts.
The analysts believe that beer as a category remains strong when the macro-outlook is tougher, with sales volumes during the global financial crisis only dipping by 1%.
“Brewers also trade at a cheaper rate compared to global staples, offering around a 20% discount,” they added.
AB InBev, which owns beers like Corona and Stella Artois, said in its full-year results that revenues were boosted by increased prices and consumers switching to premium brands, mirroring that of Heineken and Carlsberg.
1.30pm: Here’s a quick recap on the biggest risers and fallers on the market so far today
Conroy Gold and Natural Resources PLC (AIM:CGNR, OTC:CGDNF) shares shone today, climbing 10% to 19.9p, after the company told investors it discovered a new gold target in County Monaghan.
This, Conroy said, alongside a recent discovery of a gold target in County Armagh, has led to the identification of a second gold trend in the Longford-Down Massif.
AMTE Power, a UK-based developer and manufacturer of lithium-ion and sodium-ion battery cells, jumped 5% to 57p after announcing the delivery of its first Ultra Prime cells to its customer for testing.
The Ultra Prime cell is non-rechargeable and designed for use in difficult environments with “very high energy density and high-temperature performance,” according to a statement.
Active Energy Group rallied 22% after the international biomass-based renewable energy business announced it has received a trade mark for the registration of CoalSwitch in Canada.
The trade mark builds on the recent award of trade marks by the United States Patent and Trademark Office and the UK Intellectual Property Office in February 2023.
Longboat Energy shares dropped around 20% after the company reported that a previously proposed appraisal well at the Egyptian Vulture light oil discovery will not presently proceed.
The project, in the Norwegian North Sea, is located in the vicinity of infrastructure and has a wide estimate of potential resources, between 4mln and 68mln barrels oil equivalent.
1.00pm: Wall Street set to extend gains on Friday
Wall Street is expected to end the week on a positive note after stocks staged a recovery on hopes the US Federal Reserve will soon hit pause on interest rate hikes. Key today will be the release of ISM Services PMI data for February.
Futures for the Dow Jones Industrial Average rose 0.2% in Friday pre-market trading, while those for the broader S&P 500 index gained 0.3% and contracts for the Nasdaq-100 added 0.4%.
After a mixed session on Thursday, stocks rebounded in afternoon trading and the 10-year Treasury yield retreated to around 4.02% after hitting 4.1%. The Dow closed 1.1% up at 33,004, the S&P 500 rose 0.8% to 3,981 and the Nasdaq finished at 11,463 for a 0.7% gain.
“Dovish? Atlanta Federal Reserve President Raphael Bostic said he favours a "slow and steady" approach to hikes, calling for a hike of 25 basis points later this month,” commented Neil Wilson, chief market analyst at Markets.com.
“This seemed to placate markets somewhat after being on a relentless ‘higher for longer’ train for the last few days.
"Governor (Christopher) Waller was more direct saying that "if those data reports continue to come in too hot, the policy target range will have to be raised this year even more to ensure that we do not lose the momentum that was in place before the data for January were released."
My view is to focus on Waller more than Bostic,” Wilson added.
With investors eyeing the February ISM services survey release later today, TickMill Group market analyst Patrick Munnelly noted that market watchers anticipate the headline ISM will remain anchored in expansionary territory above the 50-point level.
“The January increase to 55.2 surprised to the upside, however, the uptick was widely attributed to milder weather leading to an increase in activity. The prices index remained buoyant despite retreating from elevated levels over the past 12 months.”
Ahead of the US restart and the FTSE 100i srunning out of steam now at 7,952.47, up 8.43 points, or 0.11%.
12.35pm: BP charges up Northants
BP has opened its fastest, most powerful and largest electric-vehicle charging hub in Kettering in Northamptonshire.
Drivers using the site at the intersection of the A14 and A43 will be able to use one of ten 300kW chargers, capable of adding up to 100 miles of charge in just 15 minutes.
BP's electric vehicle charging business bp pulse has already built hubs in Park Lane, London, and at Gatwick Airport.
A site is under construction in the West Midlands, which when completed will contain 16 ultra-fast 300kW chargers capable of charging 32 EVs at any one time.
Shares in BP were down 1% around midday in London.
12.18pm: Could Pearson head stateside?
Could the FTSE 100 educational publisher Pearson follow CRH and move its listing to the US. Well, yes if it were in the best interest of stakeholders, adding to concerns about a potential exodus of businesses from the listed London market.
The Times said Sally Johnson, chief financial officer, told a media call: “We keep all sorts of things under review. We don’t have any plans at the moment but where anything makes sense for our stakeholder groups of course we consider it.”
The company makes more than 60% of its revenue in the US and some of its senior management team are based there.
12.11pm: Shell's new CEO reviewing plans to cut oil and gas output
Shell PLC (LSE:SHEL, NYSE:SHEL)’s new boss said today that cutting oil and gas output would be bad for consumers, and “not healthy.”
In an interview with The Times, Shell chief executive Wael Sawan stated: “I am of a firm view that the world will need oil and gas for a long time to come.”
“As such, cutting oil and gas production is not healthy,” he continued.
Sawan said Shell is reviewing its current plan to reduce oil output by 1% to 2% per year by 2030 .
"We're reflecting on what is the right guidance to the market," Sawan told the Times.
Shares in Shell fell 0.6% to 2,589.60p each reflecting a fall in the oil price while the FTSE 100 is steadily seeing its gains eroded, now at 7,957.45, up 13.41 points, or 0.17%.
11.45am: Incentives for listing in London need some work – Panmure Gordon
The debate around the attractiveness or otherwise of London as a listing location for the world’s leading companies remains a subject of debate after CRH confirmed its was moving its primary listing to the US and ARM confirmed its IPO would be in the US and not the UK as reported on Proactive yesterday.
Panmure Gordon’s chief economist Simon French has had his say.
In a series of tweets he highlighted some reasons as to why firms are looking elsewhere.
Firstly liquidity. Low liquidity on UK equity market (vs US & some EU markets) is a serious impediment. He noted average daily volumes have fallen sharply since 2006 and for large funds this means they can’t own significant parts of UK market which fuels a valuation discount.
Second. He pointed out the UK has been out of favour amongst investors since the Brexit referendum which has generated a discount for equivalent firms (controlling for growth, sector) of between 15% to 25%. This is a disincentive for a UK listing.
French noted that historically investors have allocated more to UK equity markets than the relative size of her economy. He said now there is a reallocation going on - although it is hard to know for certain how much is structural and how much is cyclical from persistent underperformance.
Lastly, he highlighted regulation. The playing field on corporate governance, ESG, reporting is very different for public and private companies. Some of the best UK companies have remained or gone private as the disparity has grown, he explained.
Other factors mentioned by French include that sector benchmarks/deep analysis that technology companies need is underweight in the UK. He also questioned whether the tax treatment of debt sufficiently incentivises equity financing.
Overall, French said he was a big fan of the good that public equity markets can have on access to capital returns, financing innovation and supporting UK productivity. But he feels the incentives for UK listing needs work.
Meanwhile the FTSE 100 is holding steady at 7,957.34, up 13.30 points, or 0.17%.
11.16am: PPHE flies as Jefferies upgrades to buy
Shares in PPHE Hotel Group Limited (LSE:PPH) shot higher after Jefferies put the stock on its buy list with a £16 price target.
“We see a disconnect between PPHE's share price and fundamental performance,” the broker said.
It pointed out shares in the international hospitality real estate group have fallen 6% in the past three months while the wider sector has risen between 15% to 23%.
It felt this underperformance was unjustified given PPHE has seen continued demand strength in January and February and forward bookings growth for 2023. Guidance for sales and EBITDA growth is in line with peers, Jefferies noted.
Jefferies sees greater scope for recovery in 2023 than its peers given its prime city centre locations are well-positioned to capture the recovery and the partnership with Jin Jiang gives unique access to the Chinese consumer.
It also thinks leverage should come to down 7.6x net debt/NOI from the current 8.4x.
The broker raised fiscal year 2023 sales/EBITDA/EPS forecasts by 16%/25%/104% respectively, driven by a stronger recovery, operating leverage and financial leverage.
Shares in PPHE soared 7% to 1,241p in London on Friday. FTSE 100 is steady at 7,960.47, up 16.43 points, or 0.21%.
10.46am: Pennon shares advance on Deutsche upgrade
Shares in Pennon PLC flowed higher as Deutsche Bank took the water utility company off its sell list.
The German bank downgraded the stock to sell from hold six weeks ago but now feels environmental risks are reflected in the share price.
At the time Deutsche had concerns about its environmental performance, in particular around the ongoing Ofwat investigation.
It felt that the risks were not reflected in the stock price, particularly given that it felt the valuation of the shares required Pennon to restore its strong spending outperformance.
“It appeared that the company may come under pressure to increase spending, which could limit its ability to step back up its cost savings.”
However, after the recent share price decline the broker has taken a more positive view
Pennon’s share price has fallen 10% year to date but is up 1.9% today at 820p. Despite the upgrade in rating Deutsche trimmed its price target to 840p from 870p.
Meanwhile the FTSE 100 has paused for breath at 7,956.95, up 12.91 points, or 0.16%.
10.15am: Energy guarantee scheme to be extended - The Times
The chancellor Jeremy Hunt is poised to extend the £2,500 energy price guarantee for another three months according to The Times.
The report cited Whitehall source as saying it will act as a 'bridge' until wholesale prices fall below energy price cap in July. The cost is estimated at £3bn but could be less, the report said.
EXCLUSIVE:
Jeremy Hunt poised to extend £2,500 energy price guarantee for another three months
Whitehall source says it will act as a 'bridge' until wholesale prices fall below energy price cap in July
Cost estimated at £3bn but could be lesshttps://t.co/QiDxkCBrOU
— Steven Swinford (@Steven_Swinford) March 3, 2023
9.42am: UK's service sector returns to growth
The UK's service sector returned to growth in February as business activity expands at fastest pace since June 2022, according to the S&P Global/CIPS services PMI report.
At 53.5 in February, up from 48.7 in January, the headline index was above the 50.0 no-change value for the first time in six months with February's data indicating that the UK service sector gained considerable momentum, with business activity and incoming new work both expanding for the first time since August 2022.
Tim Moore, economics director at S&P Global Market Intelligence said: "UK service providers moved back into expansion mode in February as fading recession fears and improving business confidence resulted in the strongest rise in new orders since May 2022."
????????The #UK service sector gained considerable momentum, with business activity and incoming new work both expanding for the first time since August 2022 (headline #PMI at 53.5; Jan: 48.7). Input cost inflation fell to its lowest since June 2021. Read more: https://t.co/dyrtXAp4VT pic.twitter.com/EdkXaHM75y
— S&P Global PMI™ (@SPGlobalPMI) March 3, 2023
Mirroring the trend for business activity, service providers indicated that volumes of new work returned to expansion territory during February.
Measured overall, the rate of new business expansion was the strongest since May 2022. Rising export sales contributed to the rebound in total new orders in February.
Higher levels of new work from abroad have been recorded for three months running, with the pace of expansion accelerating throughout this period. Service sector companies often noted stronger demand from clients in the US and western Europe. A modest rise in employment numbers was reported.
Average prices charged by service providers continued to rise sharply in February, and the rate of inflation slowed to a much lesser extent than seen for input costs.
The news supported the FTSE 100 which is just off session highs at 7,961.06, up 17.02 points.
9.33am: Barclays raises Euro rate expectations
Over in the currency markets and the Euro has made early progress against the US dollar after yesterday’s strong inflation data in the Eurozone.
Data showed inflation eased to 8.5% in February but was above the market consensus of 8.2%, while the core rate hit a fresh record high. ECB president Christine Lagarde said that rates will have to rise higher and stay higher for some time to combat inflation.
Barclays has upped its expectations for interest rates in Europe and now expects them to peak at 4% in July.
“We now expect the ECB to raise rates by 50bp in both March and May given the the acceleration in core inflation,” the bank said.
“We expect the June macroeconomic projections to lay the groundwork for a reassessment of the policy stance, justifying a downshifting to 25bp. We forecast a final 25bp in July, for a terminal depo rate of 4%.”
The Euro was up 0.2% against the US dollar at US$1.0616.
Perceived ‘dovish’ comments from Atlanta Fed President Raphael Bostic also supported European currencies. The pound 0.4% to US$1.1994.
9.11am: ARM confirms plans for US listing
British chip technology firm Arm Holdings, owned by Japan's SoftBank confirmed it would pursue a US-only listing this year, dashing the hopes of the British government that the tech giant would return to the London stock market.
But it did not completely rule out an eventual London listing, saying it intended to consider a subsequent IPO there in due course, without providing further details.
ARM finally confirms it plans (initially at least) to float in NY over London in a massive blow to the UK government’s ambitions to make Britain a “science and technology superpower.”
— Katie Prescott (@kprescott) March 3, 2023
ARM chief executive Officer Rene Haas said: "After engagement with the British Government and the Financial Conduct Authority over several months, SoftBank and Arm have determined that pursuing a US-only listing of ARM in 2023 is the best path forward for the company and its stakeholders.”
Sky's Ed Conway reported reaction from the UK government.
Chip design giant Arm is the jewel in the crown of UK tech sector.
So its decision to list its shares only in the US, despite energetic lobbying from @RishiSunak & @Jeremy_Hunt is a massive blow. Undermines their promises to make the UK a "new Silicon Valley".
Treasury statement: pic.twitter.com/klSCQrvrq1
— Ed Conway (@EdConwaySky) March 3, 2023
9.00am: Airlines fly as Lufthansa returns to profit
Stocks in London continue to make headway on Friday with airlines prominent risers in both the FTSE 100 and FTSE 250.
At 9.00am the lead index was at 7,972.36, up 28.32 points, or 0.36% and the broader FTSE 250 stood at 19,919.58, up 67.93 points, or 0.34%.
Sentiment in the sector was lifted by news German carrier Lufthansa returned to profit in 2022 as revenue jumped on doubled passenger numbers, although they remained below pre-pandemic 2019 figures.
The Cologne, Germany-based airline said it made a net profit of €791mln in 2022, from a loss of €2.19bn in 2021. However, this is still 35% lower than a pre-pandemic net profit of €1.21bn achieved in 2019.
Revenue jumped 95% to €32.77bn from €16.81bn and was 10% lower than €36.42bn in 2019. Passenger numbers more than doubled to 101.8mln from 46.9mln, but was 30% below 2019's 145.2mln. The load factor improved to 80% from 62% but was below 83% in 2019.
Shares in Lufthansa jumped 5.5% and helped lift shares in British Airways owner International Consolidated Airlines Group SA (LSE:IAG) by 2% and Wizz Air Holdings PLC (AIM:WIZZ) by 2.8% and easyJet PLC by 3%.
Elsewhere Pearson fell 2% despite reporting slightly better than expected profits.
Victoria Scholar, head of investment, interactive investor said the lack of a “share buyback announcement is putting pressure on the stock today which is languishing at the bottom of the FTSE 100. Also, a lot of its positive news has already been priced in, weighing on shares in today’s trade.”
Rightmove also remained lower, down 2.5%, after its annual numbers. Sophie Lund-Yates, lead equity analyst at Hargreaves Lansdown noted the online property website had, “reported a decline in the level of engagement on its site as the housing market cools compared to the pandemic.”
“Consumers paid over 2.3bn visits to the group’s platforms last year, down from 2.5bn.”
She also highlighted a reduction in the number of minutes spent searching for properties.
“This is little surprise given we’ve heard from the major housebuilders who have called out tough mortgage affordability as a reason sales rates are dipping,” she pointed out.
The company itself said it didn’t expect to see a material impact from the slowdown in the property market.
8.15am: Footise pushes higher
The FTSE 100 made a bright start on Friday taking heart from strong gains in the US and Asia with mining stocks leading the way..
At 8.15am London’s lead index was at 7,957.87, up 13.83 points, or 0.17% while the FTSE 250 advanced to 19,912.18, up 60.53 points, or 0.30%.
In the US, equities rallied late in the session after Atlanta Federal Reserve President Raphael Bostic put the case for a 25 basis point rate increase at the Federal Reserve's next meeting, favouring a slow and steady course of action. He also argued for a pause in raising interest rates in the Summer lifting investor hopes that US rates may not rise as high as feared.
The bright mood continued in Asia where markets rose following better than expected economic data in China. The Caixin services purchasing managers' index rose to 55.0 from 52.9 in January. This was above consensus expectations for a reading of 54.5 and comfortably above the 50.0 mark that separates contraction from expansion.
The good news from China lifted mining and commodity stocks on hopes for increased demand. Rio Tinto Ltd rose 1.6%, Glencore PLC (LSE:GLEN) advanced 1.3% and Anglo America gained 1.3%
But results from Rightmove PLC (LSE:RMV) and Pearson PLC (LSE:PSON) failed to inspire investors despite healthy increases in profits at both.
Rightmove said on Friday it does not expect to be materially impacted by the slowing property market other in the “most extreme circumstances.”
The online property website made the forecast as it unveiled a 9% increase in full-year revenue in the 12 months to December 31 to £332.6mln from £304.9mln in 2021 as customers continued to upgrade their packages and increase their use of digital products.
Operating profit rose 7% to £241.3mln from £226.1mln a year ago, earnings per share improved to 23.8p from 21.8p and a final dividend of 5.2p was declared (2021: 4.8p) giving a total payout of 8.5p, up from 7.8p in 2021.
Broker Peel Hunt described the results as "resilient" but noted the forecast operating margin of 73% was slightly lower than the 73.8% achieved in 2022. Shares slipped 1.7%.
Educational publisher Pearson also fell, down 2.3%. Sales increased 12% to £3,841mln (2021: £3,428mln) reflecting underlying performance, portfolio changes and currency movements with operating profit £271mln, up from £183mln in 2021.
The increase in 2022 was driven by operating leverage on revenue growth, property cost savings, and a lower restructuring charge, partially offset by inflation and a reduction in other net gains and losses arising from business acquisitions and disposals, the company said.
Earnings per share reached 32.8p, a big jump from 23.5p a year ago while a final dividend of 14.9p gave a total dividend of 21.5p up from 20.5p.
Elsewhere and utility companies were in focus as the BBC reported energy companies expect the government to change course and maintain its support for households for high gas and electricity bills at or near existing levels after the current package expires in April.
The companies are preparing to amend bills to reflect the current level of support being renewed rather than reduced, the BBC said without naming the companies.
Under the plans announced by the government, its financial help will be scaled back from April, meaning the average energy annual bill will rise to £3,000 per year, up from the current level of £2,500.
Simon French, chief economist at Panmure Gordon, said the chancellor could afford to extend the current energy bill support beyond April.
Speaking on BBC Radio 4 this morning he pointed out that last September, when the energy price guarantee was announced, the wholesale gas price was about three times the level it is today. Shares in Centrica PLC (LSE:CNA), the owner of British Gas, rose 0.5%.
Another utility on the rise was Pennon PLC which advanced 0.8% as Deutsche Bank upgraded its rating to 'hold' from 'sell'.
7.45am: Footfall growth slows in February
New data on Friday revealed that growth in UK footfall decelerated in February as the cost-of-living crisis continued to bite at consumer demand.
According to data from BRC-Sensormatic IQ, total UK footfall increased by 10.4% in February against the prior year, slowing from an annual increase of 12.5% in January.
February's footfall growth was also worse than the three-month average annual increase of 12.8%.
Helen Dickinson, chief executive of the British Retail Consortium, said: "Growth in footfall slowed this month after the rush of Christmas shopping and January sales. Some people are making fewer visits as the cost of living continues to bear down ahead of the April energy price rise. Despite this, high streets continue to show the biggest improvement compared to last year, when concerns around Covid kept people away from town and city centres."
Compared to pre-pandemic levels, total footfall in February was 8.8% lower than in 2019.
7.40am: Sales and profits jump at Pearson
A healthy looking set of numbers from educational publisher Pearson PLC (LSE:PSON).
Sales increased 12% to £3,841mln (2021: £3,428mln) reflecting underlying performance, portfolio changes and currency movements with operating profit £271mln, up from £183mln in 2021.
The increase in 2022 was driven by operating leverage on revenue growth, property cost savings, and a lower restructuring charge, partially offset by inflation and a reduction in other net gains and losses arising from business acquisitions and disposals, the company said.
Earnings per share reached 32.8p, a big jump from 23.5p a year ago while a final dividend of 14.9p gave a total dividend of 21.5p up from 20.5p.
Pearson said it remained on track to deliver around £120mln of cost efficiencies in 2023 which will help accelerate improved margin expectation to 2023 from 2025.
“We are confident of further group underlying sales growth of low to mid-single digit, excluding OPM and the strategic review businesses, with adjusted operating profit and tax in line with current market expectations,” Pearson said.
Pearson continues to expect to achieve mid-single digit underlying revenue 3-year CAGR from 2022 to 2025 and for margins to be mid-teens in the near term.
7.28am: Rightmove sees no material impact from slowing housing market
Rightmove PLC (LSE:RMV) said on Friday it does not expect to be materially impacted by the slowing property market other in the “most extreme circumstances.”
The online property website made the forecast as it unveiled a 9% increase in full-year revenue in the 12 months to December 31 to £332.6mln from £304.9mln in 2021 as customers continued to upgrade their packages and increase their use of digital products.
Operating profit rose 7% to £241.3mln from £226.1mln a year ago, earnings per share improved to 23.8p from 21.8p and a final dividend of 5.2p was declared (2021: 4.8p) giving a total payout of 8.5p, up from 7.8p in 2021.
Average revenue per advertiser rose 11% to £1,314 per month, the second-highest year ever for absolute ARPA growth, while total membership was flat at 19,014 (2021: 18,969), with Agency branches down 178 and New Homes Developments up 223 since the start of the year.
“While we remain alert to the ongoing economic uncertainty, Rightmove is not materially impacted by the property market cycle, other than in the most extreme circumstances,” the company said in a statement.
The strong ARPA growth in the second half in 2022, and the momentum it provides for 2023, gives increased confidence in ARPA growth in 2023.
“We expect customer numbers to follow a similar pattern to that of the second half of 2022,” Rightmove said.
The company plans to focus on profitable revenue growth as it continues to invest in innovation and forecast an underlying operating margin for 2023 of around 73%.
7.00am: FTSE 100 expected to open higher
FTSE 100 is expected to open higher after US markets pushed higher after comments from a Federal Reserve official arguing for a pause in raising interest rates in the Summer.
Spread betting companies are calling London’s lead index up by around 26 points.
On Wall Street, the Dow Jones Industrial Average soared 341.73 points, or 1.1%, to 33,003.57. The S&P 500 gained 29.96 points, or 0.8%, to 3,981.35, and the Nasdaq Composite rose 83.50 points, or 0.7%, to 11,462.98.
Atlanta Federal Reserve President Raphael Bostic put the case for a 25 basis point rate increase at the Federal Reserve's next meeting, favouring a slow and steady course of action.
In Asia there was encouraging news. China's service sector sped up sharply in February, according to final survey data on Friday, as business continued to rebound after the rollback of anti-Covid measures.
The Caixin services purchasing managers' index rose to 55.0 points in February from 52.9 in January. Rising further above the 50-point no-change mark, it shows the pace of growth picked up during the month.
In Asia on Friday, the Nikkei 225 index closed up 1.6%. In China, the Shanghai Composite was up 0.5%, and the Hang Seng index in Hong Kong was up 1.2%.
Back in London and results from Rightmove and Pearson will be the early with service PMI figures due in the UK, Europe and ISM PMI figures in the US.