- FTSE 100 closes 29 points lower
- US stocks cautious on US debt ceiling worries
- Vodafone hits 16-year low as results disappoint
4.40pm: FTSE 100 closes lower
The FTSE 100 index was underwater at the closing bell, finishing 0.3% lower at 7,752 points.
"Coming on the back of disappointing Chinese retail sales numbers which are weighing on luxury retail and basic resources, there's been little reason to buy stocks today, with the FTSE100 underperforming," CMC's Michael Hewson noted.
Meanwhile, US retail sales in April rose by 0.4%, coming in below expectations of a rise of 0.8%.
?Comments from House Speaker Kevin McCarthy that there had been no progress on debt ceiling talks in contrast to more recent optimistic comments from Lael Brainard has seen markets drift lower," Hewson added.
3.50pm: Seeing through Smiths
Smiths Group shares got a lift on Tuesday afternoon as analysts at Bank of America Merrill Lynch (BofA ML) double-upgraded their rating for the X-ray detection firm to 'buy' from 'underperform' and lifted the price target to 2,000p from 1,150p
The US bank's analysts said they believe the FTSE 100-listed group has "optionality to unlock significant value from broader portfolio transformation, such as we have seen elsewhere in the UK industrial space (e.g. Spectris & IMI)."
The BofA ML analysts noted that: "Smiths' portfolio exposure is biased towards defensive, regulated and late-cycle markets (e.g. safety & security, energy) that should appeal to investors given macro concerns.
"Aftermarket (AM) is circa 38% of mix and concentrated in Detection & John Crane where demand is elevated on post-pandemic aviation security upgrades & energy security/transition."
They added: "Management have optionality to invest organically e.g. in R&D to drive product vitality and growth, or to add scale or technology through M&A, which we think Interconnect in particular would benefit from given its sub-scale positioning vs peers."
The analysts also raised their operating profit estimates for Smiths Group by 5% to 22% on a stronger outlook for Detection & John Crane, particularly in the aftermarket segments.
In late afternoon trading, Smiths Group shares were 1.4% higher at 1,679p.
3.30pm: CryptoEU
European Union (EU) states have agreed the world's first comprehensive set of rules to regulate cryptoassets, Reuters has reported, putting pressure on the UK and US to play catch up.
An EU finance minister meeting in Brussels approved rules that were thrashed out with the European Parliament, which gave its approval in April. The rules are expected to be rolled out from 2024.
Regulating crypto has become more urgent for regulators after the collapse of crypto exchange FTX.
The EU rules require firms that want to issue, trade and safeguard cryptoassets, tokenised assets and stablecoins in the 27 country bloc to obtain a licence. Ministers took steps to combat tax evasion and the use of cryptoasset transfers for money laundering by making transactions easier to trace.
They agreed on a requirement that from January 2026 service providers obtain the name of senders and beneficiaries in cryptoassets, regardless of the amount being transferred.
There was also agreement on amending rules on how member countries cooperate with each other in taxation to cover transactions in crypto-assets, and on exchanging information on advance tax rulings for the wealthiest individuals, Reuters noted.
The UK has already outlined a phased approach to crypto regulation, starting with stablecoins and broadening out to un-backed cryptoassets later on, but there is no firm timetable.
The US has focused on using existing securities rules for enforcement action in the sector while it decides on whether to introduce bespoke new rules and who would apply them.
3.15pm: Crude rises
Oil prices edged higher after the International Energy Agency (IEA) upped its demand forecast, although weaker-than-expected Chinese economic data limited the gains.
Around 3.15pm, Brent crude futures were 0.0.3% higher at $73.66 a barrel, while US West Texas Intermediate crude was up 0.2% at $71.33. Both benchmarks rose more than 1% on Monday, reversing a three-session losing streak.
The IEA raised its forecast for global oil demand this year by 200,000 barrels per day (bpd) to a record 102 million bpd. It said China's recovery after the lifting of COVID-19 curbs had surpassed expectations, with demand reaching a record 16 million bpd in March.
Data from China released earlier today showed that industrial output and retail sales growth undershot forecasts in April, suggesting the world's second-largest economy lost momentum at the start of the second quarter.
However, an 18.9% rise in China's oil refinery throughput in April from a year earlier to the second-highest on record helped to keep a floor under crude prices.
"The risks remain tilted to the downside amid a sluggish recovery in China, uncertainty around the US economy and banking system and the impact of much higher interest rates on demand," said OANDA analyst Craig Erlam.
He added: “The primary bullish case for oil prices comes from OPEC+ and the prospect of another output cut in a couple of weeks but even that has been downplayed. Perhaps Brent has simply consolidated for now in a $70-$80 range, with a move below here potentially difficult as the US seeks to refill the SPR at these levels, while OPEC+ wouldn't hesitate to pull the trigger if prices slipped too far.”
2.50pm: Hitting the ceiling a worry
The FTSE 100 index dropped to fresh session lows as US stocks fell back at the open ahead of a key meeting of congressional leaders and the President on the country’s debt ceiling.
Around 20 minutes after the New York market open, the Dow Jones Industrials Average had shed 164 points, or 0.5% at 33,184, while the S&P 500 was down 0.3%, and the Nasdaq Composite had shed 0.1%.
Meanwhile, data released Tuesday showed US retail sales rose 0.4% in April after falling by 0.6% in March, below the consensus expectation of a 0.8% increase. Sales excluding autos rose 0.4%, in line with expectations, while retail control sales were up 0.7%, above the consensus 0.3%.
“The April rebound in total retail sales follows two straight months of decline, but still leaves spending comfortably below its recent January peak,” noted Pantheon Macroeconomics senior US economist Kieran Clancy.
“The upshot here is that even flat sales in May and June seem a tall order; we are braced for outright declines, helping to tip the economy into a spring/summer recession," he added.
2.35pm: 'Farm to Fork' pressure
New research from consumer group Which? shows prices for some grocery items have doubled over the past year, while others including some prices for onions, sausages and yoghurt have risen over 85%.
This has led to calls for Prime Minister Rishi Sunak to help struggling consumers with sky-high supermarket price inflation, just as an investigation has been launched by the UK competition watchdog over high food and fuel prices.
Downing Street is hosting a 'farm to fork' summit today with bosses from the supermarket, farming and food production industries, while the Competition and Markets Authority (CMA) said overnight that it is stepping up its probe into the grocery sector, with concerns that "weak competition" may be resulting in consumers paying higher prices than they should be.
Grocery industry inflation data showed prices in April were 17.3% above where they were the year before, while the latest official inflation numbers showed a 19.1% jump in food prices in March, while world wholesale food costs dropped by 19.7% year-on-year.
Inflation on supermarket own-label budget items stepped up to 25% in April, according to data from Which, though overall food price inflation had started to ease to 17.1% from 17.2% the month before.
PM Sunak was urged by Which to "challenge supermarket chief executives to do more" at the food summit.
"He should ask them to take urgent action to help consumers cope with rampant food price increases by ensuring that smaller convenience stores stock a range of essential budget lines that support a healthy diet, especially in areas where they are most needed," the consumer group said.
2.15pm: It's a gas
Centrica, the owner of British Gas is firmly in favour with analysts at US bank Citi, who have reiterated a 'buy' recommendation ahead of what they say are four big catalysts coming up.
Thursday sees the first of these potential shots in the arm with an LNG teach-in focused on the sustainability of earnings from its trading arm (EM&T). Next, regulator Ofgem’s underlying profit [EBIT] margin review also can structurally uplift Centrica’s energy supply remuneration.
The Citi analysts also expect Centrica's next trading statement to highlight robust retail profits due to a clawback of past costs, while, fourthly, first-half results might see a further £500mln cash return.
“In our view, the Centrica shares are cheap, with the prospect of c.20% from its market cap being returned over 18 months, currently trading on an unchallenging one-year forward 5x P/E and 2x EV/EBITDA," they concluded.
Centrica shares were up 1.2% to 119p.
1.30pm: A look at the risers and fallers on the junior market
Rurelec PLC (AIM:RUR) shot up nearly 60% after the power-production company entered into a conditional agreement to sell its Argentinian Interests to Verafont, Basic Energy Limited and Esteban Reynal for a consideration of up to US$5mln (£4mln).
Glantus Holdings PLC (AIM:GLAN) shares rose 13% after the provider of Accounts Payable automation and analytics solutions reported upbeat trading for the first quarter (Q1) of 2023 and revealed a change of chief financial officer (CFO).
On the Beach Group (LSE:OTB) plc fell 9% after investors took the view that the company's first-half performance may leave the online travel agent struggling to meet some punchy full-year targets.
Genus PLC (LSE:GNS) shares fell 5% following a cut in its full-year profit forecast due to difficulties in the animal genetics firm's Chinese porcine business.
Shoe Zone PLC (AIM:SHOE) shares fell 12.5% to 210p on Tuesday morning as the retailer reported a halving in first-half profits.
1.05pm: US markets seen lower ahead of crunch debt ceiling talks
US stocks are expected to open lower on Tuesday as all eyes turn to a meeting between President Joe Biden and congressional leaders on the US debt ceiling.
In pre-market trading, futures for the Dow Jones Industrial Average (DJIA) were 0.3% lower, while those for the S&P 500 shed 0.2%, and contracts for the Nasdaq 100 fell 0.1%.
Wall Street stocks closed higher on Monday, with the DJIA breaking five-consecutive sessions of losses, ending 0.1% higher, while the S&P 500 added 0.3%, and the tech-heavy Nasdaq Composite led the charge with a 0.7% gain.
Today, however, investors are anxiously awaiting progress on a deal to raise the debt ceiling before June 1, which is the earliest date the Treasury Department has said the US could default on its debt obligations. Treasury Secretary Janet Yellen said last week that a lack of a deal could spur an “economic catastrophe.”
President Biden gave a more optimistic view of the ongoing negotiations over the weekend, while House Speaker Kevin McCarthy said significant obstacles still remain. Biden has so far maintained that raising the debt ceiling is non-negotiable. McCarthy, however, has pushed for talks to broker a deal to raise the debt ceiling be tied to spending cuts.
Ipek Ozkardeskaya, senior analyst at Swissquote Bank thinks an agreement on the US debt ceiling is unlikely before the last minute but pointed out that, for investors, "a default means US government not servicing the debt."
She said: "Investors don’t care much whether the US government workers will get paid or not. They just care about whether the US will be able to service its debt. So here, there is a nuance. And even in an extreme case, like in 2013 when we saw the US government shut for weeks, it wasn’t considered a default because 1. US didn’t default on its debt payments, so for investors, frankly speaking, there was no default whatsoever ... even politicians didn’t call the 2013 government shutdown a default, they said it was just a ‘lapse in appropriations’. So even in case of a government shutdown, the US can avoid a proper default."
In economic data, April US retail sales are due at 8.30am ET on Tuesday, with economists anticipating an increase of 0.8%.
An array of Federal Reserve speakers are also lined up today, with Fed vice chair for Supervision Michael Barr to go before the House Financial Services Committee at 10am, while Fed presidents Raphael Bostic of Atlanta, John Williams of New York and Austan Goolsbee of Chicago will appear at other events.
On the corporate front, Home Depot shares fell after the home improvement retailer reported disappointing quarterly revenue and cut its full-year guidance.
12.37pm: Vodafone share price at lowest level since 1997
Vodafone Group PLC (LSE:VOD) shares have hit their lowest level since 1997 as shareholders were left unconvinced by the turnaround plan for the British mobile phone giant.
Shares in the UK telco have slumped around 6% to 84.93p after earlier hitting a session low of 83.13p.
It’s fair to say AJ Bell’s Russ Mould wasn’t overly impressed.
“The company can adjust, rebase and try to flatter its reported figures all it wants, but the share price fall shows the FTSE 100 firm isn’t fooling anyone, and that is because there are three glaring flaws in new Vodafone boss’ Margherita Della Valle’s plan to return Vodafone to investors’ favour,” he said.
“First, the strategy focuses on ‘Customers, Simplicity and Growth,’ but growth is not a strategy – it is what results from strategy.
“Second, there is no growth, as Vodafone is steering down profit and cash flow guidance for the new fiscal year and declares another unchanged dividend.
“Finally, the company still looks like an over-indebted investment trust of telecoms assets and the new CEO’s plan does nothing to address the structural challenges that face Vodafone, as it tries to compete on too many fronts, in too many markets with too little resource, thanks to its hefty borrowings,” Mould concluded.
12.20pm: Kingfisher slips after Home Depot warning
Shares in Kingfisher PLC (LSE:KGF) tumbled late morning after US home improvement retailer Home Depot warned that profits this year will fall below its expectations.
Home Depot now expects earnings per share to fall by between 7% and 13% this year. In February, it had guided to a decline of “mid-single digits”.
The company said it now expects sales and comparable sales to decline between 2% and 5% for the fiscal year. It had previously predicted roughly flat sales for the period.
The DIY sector did well during the pandemic as consumers in lockdown invested in their homes but the economic slowdown and rising interest rates have pressured sales.
Home Depot CFO Richard McPhail said customers are buying fewer big-ticket items, such as patio sets and grills, and taking on smaller home improvement projects.
Shares in Home Depot were 3.7% lower in pre-market trading in New York, while Kingfisher was down 3.3%.
12.05pm: CMA says strong competition a positive signal for UK's reputation
The chairman of the Competition and Markets Authority (CMA) has said that it is not worth "turning a blind eye" to anti-competitive mergers in order to boost confidence in the UK as a place to do business.
Marcus Bokkerink told MPs on the business and trade committee: "We are vigilant, as it is our duty to be vigilant, about investments that consolidate and entrench market power.
"I think I would challenge the premise that if there is an impact on international confidence in doing business in the UK, that the best way that that confidence is served is by turning a blind eye to anti-competitive mergers."
CMA chief executive Sarah Cardell said that having strong competition in the UK was good for the country's reputation.
She said: "Individual cases need to be decided on their merits When we're looking strategically at the role of the competition authority, absolutely, we will consider the impact of the decisions that we have and the impact that has for the UK economy, including the reputation externally.
"I believe that strong competition is a very positive signal for the UK's reputation externally."
The CMA has been in the spotlight after blocking Microsoft's planned acquisition of Activision Blizzard. Yesterday, its European counterpart cleared that deal. The blockbuster acquisition remains the subject of a further probe in the US by the FTC.
11.35am: Could UK interest rates have peaked?
Today’s figures on the jobs market and average earnings suggest the Bank of England’s rate rising spree is beginning to take effect raising hopes that a peak in borrowing costs may be close.
James Smith at ING commented: “Momentum in UK wage growth appears to have eased since 2022, and together with signs that the heat is coming out of the jobs market, there's nothing in the latest report that screams a need to keep hiking rates.”
Figures from the Office for National Statistics showed a fall of 55,000 in the number of vacancies in the three months to April and a 156,000 drop in the number of inactive workers alongside a slight increase in the unemployment rate in the quarter to March.
The ONS figures also showed a 136,000 fall in payrolled employees between March and April – the first reduction since February 2021.
There were also signs that growth in pay was softening with total pay rising 5.8% year-on-year in the first quarter, down from 6% in the fourth quarter.
Samuel Tombs at Pantheon Macroeconomics thinks “wage growth is slowing rapidly enough for the MPC to keep Bank Rate at 4.50% at its next meeting on June 22.”
He pointed out that year-over-year growth in private sector average weekly earnings excluding bonuses dropped to 7.0% in the first quarter - in line with the Committee’s forecast in last week’s Monetary Policy Report - from 7.3% in the fourth quarter.
Martin Beck, chief economic advisor to the EY ITEM Club, noted: “On balance, the latest developments in labour market quantities and prices don’t offer any obvious support to another rate rise when the MPC meets next in June.
“The focus now switches to the next set of inflation data, due on 24 May, to see if that shows the evidence of inflation persistence required to make the MPC increase rates again.”
ING's Smith agreed: “Our base case is a pause next month, though by its own admission, the Bank of England is data-dependent now, and there’s still another jobs report and two CPI releases before next month’s meeting.”
The pound was little moved after the figures trading 0.1% higher at $1.2539 while the FTSE is up 9 points at 7,793.
11.02am: Warren Buffett's Berkshire Hathaway takes stake in Diageo
Warren Buffett’s Berkshire Hathaway has taken a $41.3mln stake in Diageo PLC (LSE:DGE), the FTSE 100 maker of Johnnie Walker whisky and Tanqueray gin.
Shares in the world's biggest spirits group rose 1.4% after the holding was revealed in a quarterly filing which disclosed Berkshire's exposure to stocks as of March 31.
Diageo, based in London, has a stock market valuation of around £80 billion and owns brands such as Guinness, Baileys cream liqueur and Smirnoff vodka.
Its primary listing is in London, but in addition, it has American depository receipts on the New York Stock Exchange.
Buffett's fund also made a $954mln move into credit card issuer Capital One, exiting from US Bancorp and Bank of New York Mellon to help make room in the portfolio.
Meanwhile, the FTSE 100 has run of steam and is back to its opening levels, at 7,778.
10.38am: Primark to drive double-digit earnings growth for AB Foods
RBC Capital Markets has taken a more favourable view on Associated British Foods PLC (LSE:ABF), upgrading to 'outperform' from 'sector perform'.
“We think an improvement in Primark profitability should drive double-digit earnings growth for ABF, which is not being captured by the current valuation,” the broker said.
RBC explained ABF is one of the companies most sensitive to moderating inflation trends.
“Its main business Primark (44% of sales, 51% of profit) has a fairly low gross margin meaning it should see a strong improvement in profitability in FY24,” the broker said, while the USD vs the GBP and EUR looks neutral to slightly positive for Primark gross margin, as does raw materials.
RBC also pointed out Primark is a big volume player in freight, meaning it should see a material benefit from falling freight costs.
The broker also sees potential for Primark to open space at a CAGR of 5% over 10 years, “which should support at least mid-single-digit sales growth.”
Progress is seen in the Food business which RBC estimates will generate 7% profit growth this year or 13% excluding Sugar.
“In particular Ingredients has been performing very well and is now generating close to 15% of group profit.”
RBC has lifted its price target from 2,150p to 2,250p offering around 17% upside from today's share price of 1,917p.
10.00am: Pound steady after wage figures
Sterling is little changed after today's average earnings and jobs figures.
ING Economics noted momentum in UK wage growth appears to have eased since 2022, and together with signs that the heat is coming out of the jobs market, "there's nothing in the latest report that screams a need to keep hiking rates."
ING's James Smith pointed out last month’s surprisingly strong UK wage growth figure "was almost certainly a key driver" behind last week’s Bank of England decision to raise interest rates further. This month though, the story appears more benign, he added.
"In practice, we still suspect it’s going to take time for wage growth to slow and that hiring issues will remain a medium-term economic challenge," he cautioned.
"But from the BoE’s perspective, today’s report was the first big data test ahead of the June meeting, and there’s nothing here that screams a need for further hikes."
Smith expects the BoE to pause next month, accepting further data was still to come.
9.36am: UK should scrap stamp duty on share purchases to boost City
The UK should remove stamp duty on share purchases and introduce tax incentives for R&D to support its position as a leading player in the financial markets, according to UK Finance.
The trade association for the UK banking and financial services sector said the UK remains a top-tier global capital markets centre but this position is being challenged and without further action, the potential for decline is clear.
Collective and harmonised action is required to reverse adverse trends and set the UK’s markets on a new path, it felt.
Today we have launched our 'UK Capital Markets: Building on strong foundations' report, which includes findings and recommendations on how to further improve the UK's capital markets. Featuring research conducted by @EY_UKI, you can view it here > https://t.co/OGdXlVuQnH pic.twitter.com/nBFLZT99hi
— UK Finance (@UKFtweets) May 16, 2023
UK Finance believes the UK needs to address the structural challenges hindering UK growth companies, reboot the nation’s culture towards financial empowerment and entrepreneurship, continue to improve ‘the plumbing’ of the UK’s capital markets and reinforce the UK as a destination of choice.
Actions identified to assist this include introducing larger and sustained tax-based incentives for R&D for targeted sectors and incentivise UK equity investment by removing the 0.5% stamp duty on share purchases.
9.06am: Land Securities beats expectations, shares rise
Land Securities Group PLC (LSE:LAND) has made solid early progress with shares up 1.4% after its full-year results.
Peel Hunt noted EPRA NTA per share has, as anticipated, “come in well ahead of our 828p forecast and at 936p is c.2% ahead of consensus.”
The broker pointed out this reflects a c.12% decline over the year, with the portfolio showing a 7.7% decline in value over the 12 months (a +50bp rise in yield on average, and +3.6% ERV growth).
“It is highly likely that our EPRA NTA per share forecasts will have to be upgraded to reflect the c.13% beat today, while EPS and DPS forecasts look well underpinned,” the broker said
“We still see value here given the 34% discount to today’s EPRA NTA per share, and the 6.2% covered dividend yield, which looks well underpinned going forwards.”
The news pulled British Land with it, with shares advancing 1.3%.
8.55am: Vodafone falls as earnings disappoint, new CEO now needs to deliver on promised change
The FTSE 100 has pushed higher now, up 13 points but top of the fallers is Vodafone PLC.
The telco reported full-year results below recently downgraded guidance and forecast flat earnings in the coming year.
The company also unveiled plans to cut 11,000 jobs as new CEO Margherita Della Valle launched a turnaround plan for the business.
Matt Britzman, equity analyst at Hargreaves Lansdown said: "Lacklustre performance has been something markets have come to expect from Vodafone of late, and full-year results didn’t buck the trend."
"Higher energy costs and continued weakness in Germany meant underlying cash profit came in below the recently downgraded company guidance."
Britzman noted Della Valle has "been very vocal about the host of challenges she’s facing in her new role – the honesty is refreshing but not enough to keep shares from falling on the news."
"Today, Vodafone outlined some of its new strategies to combat poor performance, which include cutting around 11,000 jobs over the next three years, streamlining operations and focusing on Vodafone Business."
"This makes sense on paper, but markets will need to see tangible results over the coming year before they get more excited," he added.
8.30am: Boohoo cash position surprises on the upside, ShoreCap upgrades to buy
Shares in Boohoo Group PLC (AIM:BOO) soared 13% in early exchanges after full-year results from the online retailer beat consensus expectations.
Shore Capital analyst Eleonora Dani upgraded her rating on the stock to buy from hold on the back of the numbers with a 54p fair value.
Dani pointed out that group revenue, although down 11% to £1,768mln, slightly exceeded the consensus of £1,756mln while adjusted EBITDA of £63.3mln also surpassed the consensus of £62.1mln.
The big surprise came on cash, with Boohoo reporting a surprising net cash position of £6mln contrary to the consensus expectation of net debt of £60mln.
This positive result was attributed to strong cash generation, driven by a free cash flow of £30.2mln, resulting from notable improvements in inventory management and working capital, Dani explained.
Shore Capital's projected financial year 2024 EBITDA has been raised by 12%, and there is potential for further gains driven by margin improvements.
"Despite a recent decline in boohoo's market share, the upcoming fiscal year (FY24) offers favorable year-on-year comparisons, along with a streamlined inventory and the phased launch of a US warehouse, which are expected to boost the company's prospects," Dani said.
8.15am: Vodafone falls but Boohoo soars
The FTSE 100 was flat in early exchanges as investors looked ahead to key debt ceiling talks in the US and mulled turnaround plans at Vodafone Group PLC (LSE:VOD) as the telco unveiled plans to cut 11,000 jobs.
At 8.15am, London’s leading index was unchanged at 7,778, while the FTSE 250 edged higher to 19,270.13, up 11.38 points.
The unemployment rate in the UK unexpectedly ticked higher in the three months to March, according to figures released on Tuesday by the Office for National Statistics.
The UK unemployment rate rose 0.1 percentage points to 3.9% in the quarter to March with the increase largely driven by people unemployed for over 12 months.
The data also showed UK wage growth showed little sign of easing in the three months to March with average earnings in the private sector, excluding bonuses, 7% higher than a year earlier, up from 6.9% in the three months to February, while growth in public sector earnings reached a 20-year high of 5.6%.
But Samuel Tombs at Pantheon Macroeconomics felt "wage growth is slowing rapidly enough for the MPC to keep Bank Rate at 4.50% at its next meeting on June 22."
He pointed out "the three-month-on-three-month annualised growth rate has slowed to 5.9% in Q1, from 6.9% in Q4."
Turnaround plans at Vodafone have failed to impress the market so far with shares marked down around 3%.
"Today I am announcing my plans for Vodafone. Our performance has not been good enough. To consistently deliver, Vodafone must change,” Margherita Della Valle, Chief Executive said.
“We will focus our resources on a portfolio of products and geographies that is right-sized for growth and returns over time,” Vodafone said as it unveiled full-year results. The telco also said earnings in the new financial year will be flat.
But Boohoo Group PLC (AIM:BOO) soared 13% despite plummeting to a pre-tax loss in the year to 28 February 2023.
The online retailer reported a loss of £90.7mln compared to a pre-tax profit of £7.8mln the previous year.
Sales also fell by 11% to £1.7bn, although revenue was 43% greater than in 2020, the last pre-pandemic reporting year.
Shore Capital analysts said the results surpassed consensus expectations.
Group adjusted EBITDA reached £63.3mln, beating the consensus of £62.1mln, analyst Eleonora Dani said.
The broker has upgraded the stock to buy from hold with a fair value of 54p.
"Our projected FY24F EBITDA has been raised by 12%, and there is potential for further gains driven by margin improvements," Dani said.
7.55am: Unemployment edges higher, average earnings rise
The unemployment rate in the UK unexpectedly ticked higher in the three months to March, according to figures released on Tuesday by the Office for National Statistics.
The UK unemployment rate rose 0.1 percentage points to 3.9% in the quarter to March with the increase largely driven by people unemployed for over 12 months.
Between February and April, the estimated number of vacancies fell by 55,000 on the quarter to 1,083,000, the ONS said.
The data also showed UK wage growth showed little sign of easing in the three months to March with average earnings in the private sector, excluding bonuses, 7% higher than a year earlier, up from 6.9% in the three months to February, while growth in public sector earnings reached a 20-year high of 5.6%.
In real terms (adjusted for inflation), growth in total and regular pay fell on the year in January to March 2023, by 3.0% for total pay and by 2.0% for regular pay.
The ONS said there were 556,000 working days lost because of labour disputes in March 2023, up from 332,000 in February 2023.
7.51am: Marston's revenue rises, current trading positive
Marston's PLC reported higher revenue driven by good drink sales had helped the pub chain more than halve pre-tax losses at the half-year stage.
The firm which runs 1,440 pubs said revenue climbed to £407.0mln in the 26 weeks to April 1 from £369.7mln a year ago while the underlying pre-tax loss narrowed to £3.6mln from £7.5mln.
Andrew Andrea, CEO said: “Our H1 performance clearly demonstrates that consumers remain as keen as ever to celebrate - and socialise within - the Great British Pub.”
First-half like-for-like sales were 10.7% higher year-on-year and up 17.9% against the financial year 2020.
Drink sales continue to perform well and food sales were encouraging, demonstrating the “trading resilience” of the group's pub estate.
Marston’s reported positive current trading, with like-for-like sales in the last six weeks up 7.9% against last year with the key Easter and first May bank holiday dates also strong.
“Trading patterns normalising with encouraging consumer resilience,” Marston’s said, as it said operating profit is in line with expectations, with further cash generation and debt reduction expected.
7.32am: Vodafone to cut 11,000 jobs, forecasts flat earnings
Vodafone PLC plans to cut 11,000 jobs as part of a turnaround plan after its new boss said its performance had been poor.
"Today I am announcing my plans for Vodafone. Our performance has not been good enough. To consistently deliver, Vodafone must change,” Margherita Della Valle, Chief Executive said.
“We will focus our resources on a portfolio of products and geographies that is right-sized for growth and returns over time,” Vodafone said.
The telco plans to maximise the potential of Vodafone Business, which continues to accelerate growth, while it pledged to go back to basics to improve its consumer markets.
The FTSE 100-listed firm said the focus would be on three priorities Customers, Simplicity and Growth.
Vodafone is looking to turnaround its underperforming German business and announced a strategic review of its Spanish operation.
But in pledging “a leaner and simpler organisation,” the firm said 11,000 jobs are to go.
For the new financial year, Vodafone forecast adjusted EBITDAaL to be 'broadly flat' at around €13.3bn and adjusted free cash flow to be 'around' €3.3bn, reflecting expected working capital movements, interest and dividend receipts
The news came as the company unveiled group revenue increased by 0.3% to €45.7bn in the year to March 31 driven by growth in Africa and higher equipment sales, offset by lower European service revenue and adverse exchange rate movements.
Adjusted EBITDAaL declined by 1.3% to €14.7bn due to higher energy costs, and commercial underperformance in Germany.
Germany remains under pressure with a 1.6% drop in service revenue and a 6.1% fall in adjusted EBITDAaL.
Basic EPS climbed to 42.77c from 7.71c while operating profit nearly tripled to €14.3bn from €5.8bn lifted by gains on the sale of Vantage Towers.
Vodafone reported adjusted free cash flow of €4.8bn, reflecting lower adjusted EBITDAaL and tax phasing but there was a “significant” reduction in net debt to €33.4bn with proforma net debt to adjusted EBITDAaL improving to 2.5x.
A final dividend of 4.5 cents was paid making the total payout 9 cents, unchanged from the previous year.
7.00am: FTSE 100 seen lower, unemployment, Vodafone the early focus
The FTSE 100 is expected to slightly lower on Tuesday as Chinese retail sales and industrial production both fell short of expectations in April and with key debt ceiling talks in the US.
Spread betting companies are calling London’s lead index down by around 10 points.
Equities in New York pushed higher on Monday despite further signs the US economy is slowing down, with the Empire State manufacturing survey plunging in May.
US President Joe Biden will reconvene crunch debt talks today with senior Republican leaders including House Speaker Kevin McCarthy in another attempt to avert a costly US default.
On Wall Street, the Dow Jones Industrial Average rose 47.98 points, or 0.1%, to 33,348.60. The S&P 500 firmed 12.20 points, 0.3%, at 4,136.28 points while the Nasdaq Composite advanced 80.47 points, 0.7%, at 12,365.21.
In Asia, on Tuesday, the Nikkei 225 index was up 0.7%. The Shanghai Composite was down 0.3%, but the Hang Seng index in Hong Kong was up 0.1%.
Back in London and the early focus will be updates from boohoo, Greggs, Imperial Brands and Vodafone while economic data on unemployment and average earnings is due.