- FTSE 100 down 17 points at 7,465
- Activist funds building stake in Entain - FT
- Oil prices slides as Opec+ pulls meeting
4:40pm: FTSE drops as weak oil price hurts BP and Shell
The FTSE 100 fell, the pound dropped and the oil price slid on an eventful day in the markets which were also digesting the Chancellor's Autumn Statement.
At the close, London's blue-chip index down 12.48 points, 0.2%, at 7,469.51 while the FTSE 250 was up 132.54 points, 0.7%, at 18,480.17.
The Chancellor Jeremy Hunt unveiled a surprise 2% reduction in employee national insurance, a permanent expensing tax break for business among 110 proposals to boost growth and investment.
Back in the markets, and the FTSE was held back by falls in BP and Shell after the oil price fell shaplry in the wake of the cancellation of the Opec+ meeting with the price of Brent crude down 3.9% at the time of the London close at $79.31.
Kingfisher was the biggest faller, down 6.7%, after it warned that weak sales in France would mean lower-than-expected profits while a downgrade by RBC hurt HSBC.
Heading upwards was Sage, up 13.3%, after it unveiled a £350 million share buy-back and Entain on reports that activist shareholders were building stakes.
3:52pm: Entain jumps on report activist funds building stake
Shares in Entain, the owner of Ladbrokes and Coral, have spiked on a report that it faces growing investor unrest after two more US activist hedge funds voiced concern over the gambling group’s languishing share price and the ability of chief executive Jette Nygaard-Andersen to revive the FTSE 100 company’s performance.
New York-based funds Sachem Head Capital Management and Dendur Capital have built positions in the owner of Ladbrokes and Coral brands, according to five people familiar with the situation, the Financial Times reported.
They join Eminence Capital, a Wall Street activist that also owns a stake and went public with its grievances in June.
The activists are concerned about flagging sales in Entain’s core markets, including the UK, where regulators have cracked down on the online betting industry, as well as a series of management mishaps and costly deals, the people said.
Shares in Entain are up 5.0%.
3:27pm: Oil prices slides as Opec+ pulls meeting
Weighing on the FTSE 100 is a drop in the oil price which has slumped more than 4% after the Opec+ oil cartel announced it would reschedule its meeting this week.
Opec+ said the production meeting of the group, originally scheduled for this Sunday, would be moved to November 30, without giving a reason for the change.
OPEC+ official confirmation.
The meeting is delayed to Nov 30th (from Nov 25-26th)
Mighty fight inside OPEC about production levels.
We have been before here: Saudi Arabia has employed this maneuver (or shakedown) twice since 2020, once with Mexico and another with UAE.#OOTT pic.twitter.com/qF7ekXlyhd
— Javier Blas (@JavierBlas) November 22, 2023
Traders are suggesting it as a sign that Saudi Arabia is struggling to agree with members on a supply plan for next year.
The price of Brent crude is down 4.2% at $78.94 with BP down 2.9% and Shell down 2.7%.
3:25pm: Tax cuts enabled by real terms reduction in public spending
Jeremy Hunt’s decision not to announce any major departmental spending increases to reflect higher inflation has given him the firepower for today’s tax cuts, the Office for Budget Responsibility shows.
Key nugget from OBR: the windfall which the Chancellor just spent on tax cuts “is mainly a reflection of a £19.1bn erosion in the real value of departmental spending.” That’s the “significant and growing risk to our forecast” - ticking time bomb for the next parliament. pic.twitter.com/JmgrEjkjyE
— Stephanie Flanders (@MyStephanomics) November 22, 2023
The head of the OBR, Richard Hughes, has explained that Departmental Expenditure Limits (DELs) make up 40% of public spending.
They are set periodically, and the next review is not until after the general election.
This means that for the years beyond 2024-25, the Treasury has simply told the OBR that departmental spending will rise by £5bn per year.
That, Hughes explains, means that departmental real spending power has been eroded by £19 billion compared with the March forecast.
Hughes said: "The eagle-eyed amongst you will recognise that is roughly equal to the amount the chancellor spent on the two big tax cuts in this fiscal event."
Economists are questioning whether this is sustainable.
Central story of the #Autumnstatement is that a (nominal) £21bn/yr tax cut has been funded from (real) £19bn/yr cut in public services
This isn't sustainable and whoever wins the election will have to raise those taxes again - and then some - just to keep the wheels on
— Ian Mulheirn (@ianmulheirn) November 22, 2023
The key point of the autumn statement from @OBR_UK
Public finances better becasue public spending is not rising with higher inflation pic.twitter.com/7u9kvi3vgx
— Chris Giles (@ChrisGiles_) November 22, 2023
3:05pm: BT boosted by expenses tax change
Shares in BT have jumped nearly 5% after the Autumn Statement following after the full-expensing tax break on investment was made permanent by the Chancellor in the Autumn Statement.
It is now the second largest riser in the FTSE 100.
Overall, Chris Sanger, EY’s head of tax policy felt this was much more of a traditional Budget than an Autumn Statement, perhaps indicating that the Chancellor felt he didn’t have time to wait for the Spring to begin nurturing growth.
Indeed, the cut in National Insurance Contributions for employees will be introduced from 6th January, ensuring that it will be felt in pay packets at the start of next year and well ahead of an election, he pointed out.
2:47pm: Wall Street opens higher
US stocks opened ahead of Thursday’s holiday as bond yields fell amid mixed economic data which backed hopes that interest rates have peaked.
Shortly after the opening bell, the Dow Jones Industrial Average was up 136.80 points, 0.4%, at 35,225.09, the S&P 500 was up 26.09 points, 0.6%, at 4,564.28, and the Nasdaq Composite was up 159.62 points, 1.1%, at 14,359.61.
US initial jobless claims were lower than expected in the most recent week, numbers showed.
According to the Department of Labor, new claims amounted to 209,000 in the week to November 18, down from the previous week's revised level of 233,000. The previous week's figure was upwardly revised by 2,000 from 231,000.
The latest figure was below the FXStreet-cited market consensus of 225,000.
The more resilient numbers follow a series of releases which suggested the jobs market was cooling.
But elsewhere, durable goods orders declined in October by more than expected as commercial aircraft bookings retreated and demand weakened for business equipment.
Nvidia started the day in the red, down 0.4%, despite its forecast-busting numbers but Microsoft was a warm order, up 1.5%, as it continued to be the seen as a winner from the chaos at OpenAI.
The strong start across the pond has failed to breathe life into the FTSE 100 which is now 16 points.
2:21pm: Tax burden still set to rise despite tax moves
The market was little moved by the Autumn Statement with the FTSE 100 still down 13 points.
Reaction is coming in thick and fast and despite the talk of tax cuts, the UK’s tax burden is still forecast to increase to a post-war high.
The Office for Budget Responsibility says that the tax changes in this Autumn Statement reduce the tax burden by 0.7% of GDP.
However, that burden rises in every year to a post-war high of 37.7% of GDP by 2028-29.
When is a tax cut not a tax cut?
This chart from OBR shows tax as a per cent of GDP still peaks at same level as projected in March - a record 37.7% of GDP.
OBR: "the tax burden is forecast to reach a post-war high of 37.7 per cent of GDP in 2028-29" pic.twitter.com/zj9aabobYO
— Paul Johnson (@PJTheEconomist) November 22, 2023
NatWest is down 1.3% after the Chancellor said he would look at a retail offer for the shares in the lender still owned by the government while the freeze in alcohol duty supported Diageo.
But retailers were left disappointed by the Chancellor’s plans to increase business rates for larger businesses.
The British Retail Consortium trade body described the business rates decision as a “disappointing announcement”.
However, there was relief that the rates discount of 75% for smaller hospitality, leisure and retail businesses operating in premises with a rateable value of less than £51,000 is to be extended by one year, benefiting about 1 million businesses.
But Kate Nicholls, head of UK Hospitality, which represents thousands of pubs, restaurants and cafes, said “Many small businesses operate from larger standard rated premises,” and so would not benefit from the relief.
business rates - hospitality rate relief extended for a further year at 75% and a freeze in small premises multiplier. Disappointing Standard multiplier will rise inflation - many small businesses operate from larger standard rated premises, particularly hospitality
— Kate Nicholls OBE (@UKHospKate) November 22, 2023
1:26pm: National insurance rate cut from 12% to 10%
The Chancellor has finished by announcing a cut in employee national insurance by 2% to 10% - more than expected.
NEW
Chancellor cuts the main 12% rate of employee national insurance by two percentage points to 10%. Will help 27m people.
Coming in from Jan 6
— Ed Conway (@EdConwaySky) November 22, 2023
He says this will save someone on a salary of £35,000 more than £450 per year.
It will become effective from January 6.
1:23pm: Hunt confirms business expenses tax cut
The Chancellor has confirmed that full expensing by businessees will be made permanent - a measure that will cost will cost £11 billion.
He called it “the largest business tax cut in modern British history”.
Hunt says he is also abolishing class 2 national insurance, which is paid by the self-employed, and says the self-employed rate for class 4 national insurance will drop to 9% from 8%.
These measures will save self-employed workers £350, he claims.
1:09pm: NatWest drops on plans for retail share offer
Shares in NatWest have dropped as the Chancellor said that the government will explore a retail share offering for NatWest.
Shares in the UK bank, in which the government still owns a 39% stake, are down 1.2%, with a clear downward spike on the statement.
Hunt says he wants to sell NatWest shares to retail investors in coming year. Here he is channelling Thatcher's privatisation campaigns
— Robert Peston (@Peston) November 22, 2023
But the duty freeze has supported Diageo, up 1.1%
1:05pm: OBR rejigs growth forecasts
The OBR’s forecast for UK economic growth this year is a little brighter than previously forecast.
GDP is set to actually grow this year -- by just 0.6% but still better than the previously expected 0.2% contraction.
Next year will likely be weaker than thought, however, at 0.7% growth versus the 1.8% prior forecast. 2025 has also been downgraded.
NEW
OBR lifts growth forecast for this year but cuts it for the next three years.
Here are the figures the Chancellor just announced pic.twitter.com/V2ZJ3dQuw8
— Ed Conway (@EdConwaySky) November 22, 2023
Other subjects covered by the chancellor include exploring options for selling off the government’s remaining shares in NatWest - sending shares down - and changes to to the rules for pension funds.
He says he will give workers the right to require new employers to pay pension money into an existing pension pot.
12:50pm: Chancellor sees inflation hitting 2% target in 2025
The Chancellor has trumpeted the drop in inflation and said he expects inflation to fall to 2.8% by the end of 2024, and hit the 2% target in 2025.
Jeremy Hunt says @OBR_UK forecast that headline inflation will fall to 2.8% by end of 2024, before falling to the 2% target in 2025. (We get OBR in its own words shortly)
— Paul Kelso (@pkelso) November 22, 2023
He has also outlined proposals to help with the cost of living - benefit payments will rise by 6.7% linked to September's inflation figure, all alcohol duties will be frozen until August 1, 2024, while the state pension will increase by 8.5%.
Hunt says debt has been due to rise to almost 100% of GDP but is now it is predicted to be 94% of GDP by the end of the forecast.
12:39pm: Chancellor says the plan is working but the work is not done
The Chancellor Jeremy Hunt has kicked off his Autimn Statement.
He said he has taken "difficult decisions to put the economy back on track," adding the plan "is working but the work is not done."
He pledged to reduce debt, cut tax and reward work alongside 110 growth measures for business.
12:25pm: Stocks ease ahead of Chancellor's speech
The Chancellor will make his statement shortly, we are just running through PMQs for now.
Proactive's Josh Lamb will have all the key details on a live blog here, while the main announcements will be covered here too, plus reaction.
Ahead of the statement, the FTSE is down 15 points and the pound is at $1.2544.
12:05pm: Nvidia shares gain traction after blow-out third quarter
While the talk in the UK is about the Autumn Statement, in the US it is all about Nvidia, the chip maker which has soared 249% so far this year, following third quarter results after the close last night.
Shares appear to be gaining traction heading to the open, with shares up 1.2% in pre-market trading after initially falling by around 2% in the aftermath of the earnings.
AJ Bell’s Russ Mould noted that for the third time in a row the silicon chip specialist “hugely outstripped” analysts’ expectations for quarterly earnings and raised guidance for the next three months to levels that also exceeded forecasts.
But he explained the shares are not responding as strongly as they did after the bumper first and second quarter results, as investors ponder “the risks posed by American sanctions on Chinese buying” and also Nvidia’s already huge market valuation.
“It’s a great quarter,” trader Guy Adami told CNBC’s “Fast Money.” “But at what point do you say to yourself, you know what, now the valuation is starting to get a little bit stretched. We understand it can grow into it, but we’re going to start taking profits in the name.”
The rise in Nvidia looks set to contribute to modest gains in the US when trading begins.
In pre-market trading, futures for the Dow Jones Industrial Average were up 0.1%, while those for the S&P 500 were 0.2% higher, and contracts for the Nasdaq 100 futures rose 0.3%.
Elsewhere, minutes from the last Federal Reserve meeting showed the US central bank felt interest rates would need to remain high for "some time" judging it as "critical" to return "unacceptably high" inflation to its 2% target.
Officials "continued to judge that it was critical that the stance of monetary policy be kept sufficiently restrictive to return inflation to the committee’s 2% objective over time,” the minutes showed.
In economic news, weekly jobless claims, durable goods orders and consumer sentiment figures will all be reported ahead of Thanksgiving tomorrow when markets will be closed.
11:44am: UK factory orders remain weak - CBI
UK factory order books have fallen to their lowest level since January 2021, the latest industrial trends survey from the CBI shows.
The CBI’s monthly poll of the manufacturing sector found that total order books “deteriorated sharply” this month, to well below the long-run average.
The latest CBI Industrial Trends Survey found that manufacturing output volumes fell in the three months to November. Firms expect output to fall further in the three months to February #ITS pic.twitter.com/RK9F9BoLHF
— CBI Economics (@CBI_Economics) November 22, 2023
It also found that output fell in the last three months, and is likely to keep declining in the next quarter.
Anna Leach, CBI deputy chief economist said: "Manufacturing output has been under pressure recently given the combination of slowing demand and the run-down of stocks of finished goods."
“The further softening in orders this month is a worry, with order books now in their weakest position since the start of 2021 when the economy was locked down amid the pandemic”.
11:37am: JD Sports offers best in class growth at compelling valuation
JD Sports Fashion is 2.6% higher with Bank of America upbeat on the sports lifestyle retailer which it says “offers best-in-class growth at a compelling valuation.”
“In addition, we think JD's drive to improve governance and investor communication over the past year should also attract a wider pool of capital,” analysts at BofA said.
“JD has underperformed our wider sportswear and retail coverage since August, which we see as an enhanced opportunity to own shares and we maintain our buy rating,” the bank said.
BofA remains confident that the group can achieve its pre-tax profit and store rollout targets in financial 2024.
11:09am: National insurance cut a less generous tax-cutting option
Sarah Coles, head of personal finance, Hargreaves Lansdown notes while any tax cut is “better than nothing,” a reported cut to national insurance “would be one of the least generous options for cutting income-related tax in the Chancellor’s playbook.”
She explained that if it keeps NI and income tax thresholds frozen, the Treasury will have done nothing to protect people from the misery of fiscal drag, and means the lion’s share of the damage done to finances from these tax hikes will still continue to be felt years down the line.
By focusing on National Insurance, it also limits the income boost to workers under state pension age, so there would be no tax cut for pensioners, she noted.
She estimated a 1% cut in the 12% rate would mean £75 a year more for someone on £20,000 (or £6.25 a month), £175 for someone earning £30,000, £275 for someone earning £40,000, £375 for someone earning £50,000, and £377 for anyone earning over the higher rate tax threshold.
A bigger cut - of 2% - to this rate would be more of a boon, cutting £149 off the tax bill of someone earning £20,000, £349 for someone making £30,000, £549 for someone making £40,000, £749 for someone making £50,000 and £754 for anyone earning over the higher rate tax threshold.
10:37am: Intermediate Capital set to replace Hargreaves Lansdown in FTSE 100
The indicative results of the FTSE reshuffle were released last night by FTSE Russell with Intermediate Capital expected to join the blue-chip FTSE 100 index.
Investment platform Hargreaves Lansdown is currently set to be demoted, ending a 12-year reign in the FTSE 100, to be replaced by the private-equity fund manager.
In the FTSE 250, cycle and car retail and repair specialist Halfords is on track to join, along with oil explorer Tullow Oil, gold and silver miner Hochschild and Asia Dragon Trust, an investment trust focused on Asian stocks.
Those set to leave the FTSE 250 include William Hill-owner 888 Holdings, property firm CLS Holdings, Liontrust Asset Management (LSE:LIO), and CAB Payments, which has suffered a dramatic fall from grace after its recent listing.
It slumped 72% in a single day in October after a profit warning.
The final changes will be calculated using closing prices on November 28 and announced the following day.
9:55am: Autumn Statement - what to expect
With speculation mounting as to what to expect from today's Autumn Statement, here is the checklist from the well-connected political editor at The Times, Steven Swinford.
He is predicting:
- NI cut for 28 million people
- Full expensing made permanent
- Benefits uprated by 6.7%
- State pension up by 8.5%
- Living wage up to £11.44 (already announced)
- Business VAT threshold up
Autumn Statement:
* NI cut for 28m people
* Full expensing made permanent
* Benefits uprated by 6.7%
* State pension up by 8.5%
* Living wage up to £11.44
* Benefit claimants made to look for work
* Business VAT threshold up
— Steven Swinford (@Steven_Swinford) November 22, 2023
The Financial Times said the plans to make the ‘full expensing’ capital allowance regime permanent will form the centre point of Hunt's statement.
The scheme, which was due to expire in 2026, allows a company to immediately deduct all of its spending on IT equipment, plant or machinery from taxable profits.
Extending it was a crucial demand of business groups and officials claim Hunt’s permanent extension would give the UK one of the world’s most generous capital allowance regimes, the FT said.
Hunt will also announce more than 100 supply-side reforms, it said, plus measures to get the sick back to work.
9:32am: HSBC faces $5 billion headwind from falling rates, RBC downgrades
Shares in HSBC are down 0.8% after RBC Capital Markets downgraded the Asia-focused bank to sector perform from outperform.
The broker explained that HSBC has outperformed UK bank peers by 31% year-to-date and thinks now is a good time to take profits.
Earnings momentum looks to have turned and an improved capital distribution profile is now reflected in consensus, it believes.
The broker is predicting a $5 billion headwind from lower rates although this will be partially offset by balance sheet growth.
"However, that growth is unlikely to be anything remarkable about over the next two years," RBC said, noting HSBC's largest five geographies, which account for c.80% of revenues, are only due to experience c.1.9% average GDP growth in 2024 & 2025.
“Therefore, with the shares looking more fair value, we downgrade our rating to sector perform and reduce our price target to 775p,” the broker said – the target was 825p before.
The banking team at RBC have also taken a look at Lloyds Banking Group PLC (LSE:LLOY) and NatWest Group PLC (LSE:NWG).
It the short term, it recommends a pair of long-NatWest; short-Lloyds highlighting a valuation gap at present.
"Over the medium-term, we retain a preference for Lloyds, given that strategic investments should continue to benefit other income and cost control, and we feel more confident on asset quality," it said.
9:17am: Buyback sweetens reassuringly in-line results from Sage
Sage Group PLC remains top of the FTSE 100 risers, now up 10.1% - broker Jefferies said results (see 7:50am) were “reassuringly in line and sweetened with a £350m buyback.”
Looking forward, the outlook implies consistent top-line growth and margins that are expected to trend up, the broker pointed out.
This implies a year of 12% profits growth, backed by a low-risk recurring revenue model.
“Sage remains one of the more straightforward investment cases in the sector,” in its opinion, reiterating a buy rating.
Jefferies noted new customer acquisition increased to £190 million from £180 million last year while the renewal rate came in at 102%, the highest it can remember.
8:53am: Sage powers ahead after £350 million buyback
The FTSE 100 has pushed ahead led by a 7.5% jump in accountancy software provider, Sage.
The firm unveiled a £350 million share buyback which it said reflected its confidence in Sage's future prospects, together with Sage's strong cash generation and robust financial position.
JD Sports Fashion rose a further 2.5% boosted by improved trading at US peer, Dick’s Sporting Goods on Tuesday but Kingfisher remains in the doldrums, down 5.5%.
HSBC is down 0.3% as RBC Markets downgraded to sector perform from outperform and slashed its prce target to 775p from 825p – it also recommends switching from NatWest into Lloyds.
In the FTSE 250, Johnson Matthey rose 2.6% after reporting an improved outlook after a tough first half.
8:32am: Kingfisher's French woes makes "sorry reading"
Kingfisher is down 5.7% after its profit warning today.
Richard Hunter, head of markets at interactive investor, commented: “A second successive profit downgrade has scotched any hopes of recovery at Kingfisher, with the French operation being the latest culprit for further weakness.”
“The combined Castorama and Brico Depot business account for 32% of overall group sales, and the latest update makes for sorry reading,” he said.
Hunter noted Castorama saw a sales decline of 6.9% and Brico Depot 10.6%, leading to an overall drop in France of 8.7%.
A number of issues plagued the business over the quarter, ranging from the unseasonably warm weather which delayed the start of sales of products such as heating and insulation, to the general weakness of the French home improvement market, which deteriorated much more than had been expected, he said.
8:15am: FTSE flat as Hunt seeks to boost UK economy
The FTSE 100 edged higher as the market awaits the Chancellor’s Autumn Statement which is expected to contain 110 different growth measures as he seeks to revive the UK's economy.
At 8:15am, London’s blue-chip index was up 6.41 points, 0.1%, at 7,488.40 while the FTSE 250 was up 33.22 points, 0.2%, at 18,380.85.
Susannah Streeter, head of money and markets, Hargreaves Lansdown said: “A muted early trading session is expected for the FTSE 100 as the rumour mill continues to grind about the seasoning Jeremy Hunt plans to sprinkle into the UK economy to try and improve its growth prospects.”
“Investors will be highly attuned to what the Chancellor plans as part of that recipe and tax cuts now look set to be a key ingredient, even though they risk turning up the heat on inflation.”
Reports suggest Hunt will use his autumn statement to reduce headline rates of national insurance and make permanent a £10 billion-a-year tax break for companies that invest in new machinery and equipment.
He will promise to cut business taxes, remove planning red tape and speed up access to the national grid.
There is also speculation that Hunt may signal a cut in income tax ahead of the upcoming general election.
In company news, Kingfisher slipped 6.2% after warning that weak trading in France would mean lower-than-expected profits despite a resilient performance in the UK.
But it was brighter start for Sage, with shares up 5.8%, after the accountancy software provider launched a £350 million buyback alongside in-line results.
Johnson Matthey also made a positive start, up 2.6%, as it said the outlook for the full-year had improved after a tough first half.
7:59am: Smith & Nephew buys Agili-C maker, CartiHeal
Smith+Nephew has bought CartiHeal, the developer of Agili-C, a novel sports medicine technology for cartilage regeneration in the knee.
The FTSE 100-listed firm is paying an initial cash consideration of $180 million and up to a further $150 million contingent on financial performance.
Agili-C is an off-the-shelf one-step treatment for osteochondral (bone and cartilage) lesions with a broader indication than existing treatments, S&N noted.
"The acquisition of this disruptive technology supports our strategy to invest behind our successful Sports Medicine business", said Deepak Nath, chief executive officer.
"Agili-C's superior clinical performance makes it highly complementary to our existing knee repair portfolio and with our proven commercial expertise in high-growth biologics, we are confident that we will drive further success with this compelling treatment option."
7:56am: CRH sells European lime operations for $1.1 billion
CRH PLC (LSE:CRH, NYSE:CRH) has sold its lime operations in Europe to SigmaRoc PLC (AIM:SRC) for around $1.1 billion continuing a busy week of wheeling and dealing.
The business sold comprises 16 operating locations with leading market positions across Ireland, the UK, Germany, Czech Republic and Poland and generated sales of c.$610 million and Ebitda of c.$137 million in 2022.
The transaction is structured in three phases, the first of which is expected to complete in early 2024 comprising the Group's lime operations in Germany, Czech Republic and Ireland.
The remaining phases, consisting of operations in the UK and Poland, are expected to complete in 2024.
CRH said the proceeds from the divestment “will provide us with significant additional capital allocation opportunities to deliver further growth and value creation for our shareholders.”
On Tuesday, the building materials firm announced the $2.1 billion acquisition of Texas-based cement and ready-mixed concrete assets from Martin Marietta Materials.
7:50am: Sage launches £350 million buyback
Sage Group PLC has launched a £350 million share buyback alongside full-year results which showed double digit growth in revenue and operating profit.
The accountancy software provider said underlying recurring revenue increased by 12% to £2.10 billion, underpinned by Sage Business Cloud growth of 25% to £1.63 billion
Underlying total revenue rose by 10% to £2.18 billion and underlying operating profit climbed by 18% to £456 million, with margin increasing by 140 bps to 20.9% driven by operating efficiencies..
Sage proposed a final dividend of 12.75p, increasing the full year dividend by 5% to 19.3p, and said the buyback reflected its confidence in Sage's future prospects, together with Sage's strong cash generation and robust financial position.
Looking ahead, Sage expects organic total revenue growth in financial year 2024 to be broadly in line with the current year.
Operating margins are expected to trend upwards in the coming financial year and beyond.
7:41am: Johnson Matthey outlook improves
Johnson Matthey PLC (LSE:JMAT) said the outlook for the full-year had improved although it remains at the vagaries of moving metals prices.
The company, which was recently relegated from the FTSE 100, now expects “at least” high single digit growth in operating performance at constant precious metal prices and constant currency - previously at least mid-single digit.
This was underpinned by transformation benefits of around £55 million in the financial year, the company said, and it remains on track to deliver in excess of £150 million annualised savings by end of 2024/25.
For the six months ended September, revenue fell 11% to £6.53 billion from £7.33 billion the year prior, with sales from continuing operations down 4% to £1.97 billion from £2.05 billion before.
Lower average precious metal prices affecting PGM Services, partly offset by strong growth in Hydrogen Technologies and further progress in Catalyst Technologies.
Underlying operating profit dipped 19% to £180 million from £222 million with the dividend left unchanged at 22p.
Johnson Matthey said whilst precious metal prices have stabilised recently, it remains difficult to predict how they may develop.
It explained that assuming prices remain at their current level for the remainder of the financial year, there would be an adverse impact of around £80 million on full year operating performance compared with the prior year.
7:24am: Kingfisher hit by weak French trading
Plenty of company news to report ahead of the Autumn Statement.
Kingfisher PLC (LSE:KGF) has warned weak trading in France will result in lower-than-expected profits and free cash flow in the full-year.
The owner of B&Q and Castorama now expects full-year adjusted pre-tax profit of £560 million, down from previous guidance of £590 million with free cash flow forecast of around £470 million, down from more than £500 million before.
In a third quarter trading update, Kingfisher said sales fell 2.1% to £3.2 billion with like-for-like sales down 3.9%.
Underlying retail and trade consumer trends were resilient in the UK and improving in Poland, in line with expectations but market trends in France were weaker than expected, the firm explained.
“We continue to take decisive cost actions in France, more than offsetting the impact of inflation.”
“However, given continued market weakness, this is not sufficient to offset the impact of lower sales in this region,” the firm said.
In France, Castorama performed in line with the market but Brico Deport underperformed due to significantly higher weighting of building materials and electricals, plumbing, heating & cooling products.
Kingfisher said the fourth quarter has started largely in line with the trends of the third quarter, including continued resilience in the UK and market weakness in France.
For the three weeks to November 18, group like-for-like sales were down 3.4%.
In the UK & Ireland, the firm reported market share gains at B&Q (including TradePoint) and Screwfix with resilient underlying sales trends.
7:00am: Subdued start expected ahead of Autumn Statement
The FTSE 100 is expected to open little changed when trading starts on Wednesday ahead of the Autumn Statement.
Spread betting companies are calling London’s lead index unchanged after closing down 14.37 points, 0.2%, at 7,481.99 on Tuesday.
The Chancellor Jeremy Hunt will give his statement around 1230 GMT and reports suggest he is likely to reduce headline rates of national insurance and make permanent a £10 billion-a-year tax break for companies that invest in new machinery and equipment.
He will promise to cut business taxes, remove planning red tape and speed up access to the national grid, reports suggest.
Elsewhere, investors will be reacting to minutes from the latest FOMC meeting and earnings from Nvidia.
Minutes from the US central bank's meeting on October 31 to November 1, showed Fed officials indicated interest rates would need to remain high for "some time" judging it as "critical" to return "unacceptably high" inflation to its 2% target.
Officials "continued to judge that it was critical that the stance of monetary policy be kept sufficiently restrictive to return inflation to the committee’s 2% objective over time," the minutes stated.
"There is something for everyone in the minutes of the Fed’s early November policy meeting," said Paul Ashworth at Capital Economics.
Elsewhere, Nvidia was marked down around 2% despite another forecast-busting set of results.
The stock had hit an all-time heading into the results.
It predicted forecast-beating revenue in the current quarter, as the company said strong growth in most regions would help offset expectations that sales of its to China would “decline significantly” due to recently tightened AI chip rules.