Weekly review

By Josh White

Date: Friday 16 Feb 2024

(Sharecast News) - The FTSE 100 ended the week up 139.13 points, or 1.84%, closing at 7,711.71 on Friday.
Equity view

Property firm Segro struck an upbeat tone on Friday, after pre-tax losses narrowed and rental income improved. The blue chip real estate investment trust, a specialist in warehouses and industrial properties, said adjusted pre-tax profits in the year to December rose 6% to £409m, while earnings per share increased 5.5% to 32.7p.

TBC Bank Group reported significant increases in net interest income, of 26.8%, and net fee and commission income, of 27.8%, in its full-year results on Friday, leading to total operating income of GEL 2.37bn (£0.71bn), up 14.6%. Despite a 36% increase in its total credit loss allowance and a 24.2% rise in operating expenses, the bank still achieved a profit before tax of GEL 1.33bn, up 7%.

Power control solutions manufacturer XP Power warned on Friday that full-year revenues would be "significantly below market expectations", sending shares sharply lower in early trading. XP Power noted that based on recent order intake, revenue performance and discussions with customers, particularly within the healthcare and industrial technology sectors, it had confirmed "unusual, temporarily soft demand conditions and destocking". The group added that these softer trends had also emerged within its direct industry peers.

Oil and gas engineering services business Plexus has won a contract valued in excess of £1.0m to provide specialised equipment and services for multiple plug and abandonment activities in the North Sea. Plexus stated that under the terms of the contract, it will provide Exact Adjustable Surface Wellhead equipment, and specialised Centric Mudline system tooling and services for P&A operations on wells in the Dutch sector of the North Sea.

Independent North Sea oil and gas explorer Ithaca Energy said full year earnings would be in line with guidance. The company, which last month lost chief executive Alan Bruce after two years in charge, said 2023 production was 70.2 thousand barrels of oil equivalent per day (kboe/d), in line with previously stated guidance of 68-74 kboe/d.

AO World jumped on Thursday, having announced after the close of markets on Thursday that it had bought the intellectual property rights of mobile phone retailer A1 Comms from administration for £2.2m in cash. The deal is mainly for the rights in and to the websites www.affordablemobiles.co.uk and www.buymobiles.net, as well as the Samsung url www.mobileshop.com.

Woodside Energy Group flagged $1.5bn of exceptional charges on Thursday, the bulk of which relate to its Shenzi oil and gas field. The Australian oil and gas firm, which is also listed in London, acquired the deep-water field off the Gulf of Mexico when it bought BHP Group's petroleum assets in 2022.

Business information and analytics firm Relx reported a robust full-year performance in its results on Thursday, with revenue rising an underlying 8% to £9.16bn. The FTSE 100 company said adjusted operating profit jumped to £3.03bn, marking a substantial underlying growth of 13%, while adjusted earnings per share were ahead an underlying 11% to reach 114.0p.

Coca-Cola HBC on Wednesday posted record profits last year driven by surging sales and volumes for sparkling drinks and coffee combined with costs easing in the second half. The bottling company said comparable operating profit for the year to December 31 rose 7.7% to €1.08bn. It expects profit to grow 3% to 9% this year.

Vistry said on Wednesday that Countryside Partnerships has entered into a new framework agreement with Sigma Capital Group to deliver 5,000 new homes for Sigma's build-to-rent brand (BTR), Simple Life Homes. Sigma is the leading provider in the BTR market focused on single family housing and one of Vistry's key partners in the sector.

United Utilities reported no significant changes to its financial guidance for the 2024 financial year in an update on Wednesday, despite weather-related challenges. The FTSE 100 water company said its outcome delivery incentive (ODI) performance had been affected by adverse weather conditions, particularly high rainfall across the north west of England.

UK water and waste firm Severn Trent reiterated its full-year outlook on Wednesday. In a brief trading update, the London-listed firm - which supplies customers across the Midlands and Wales - said its "robust" financial performance remained in line with expectations.

Travel agency company TUI has registered a positive quarterly underlying profit for the first time after a record performance in the first quarter, as it reiterated its guidance for the full year. The company booked underlying earnings before interest and tax of €6m for the three months to 31 December, moving into the black for the first time since the merger of TUI AG and TUI Travel PLC in 2014. For the first quarter a year before, the group registered an underlying EBIT loss of €153m.

The Renewables Infrastructure Group has bought Fig Power, an energy projects developer based in Bristol, for an outlay of £20m over the next two years. Fig Power has a 1.7GW development pipeline in the UK, including nine more advanced projects of around 400MW with grid offers ranging from 2025 to 2033 and a further 1.3GW of exclusive sites.

Oil and gas group Kistos Holdings has said that its Joutun floating production storage and offloading (FPSO) on its Balder field in Norway is nearly complete and should be producing oil by the end of the year. The AIM-listed company said it was "encouraged by recent activity" its joint venture partner Var Energi has made converting more of the established 2C resources into sanctioned reserves through the ongoing drilling programme.

Silchester International Investors has taken a 5% stake in broadcaster ITV, according to a filing late on Monday. According to its website, Silchester was formed in 1994 to specialise in international equity investment, primarily on behalf of institutional investors.

Travel food outlet operator SSP Group on Monday said it had bought Airport Retail Enterprises in Australia for an undisclosed sum. Founded in 1971, privately-owned ARE is a food and beverage operator, with annualised sales in the region of AUD $200m (£100m) from 62 outlets, principally bars, casual dining restaurants and cafes, across seven Australian airports.

Tritax Big Box said it had agreed terms on a possible bid for UK Commercial Property REIT in an all-share deal worth £924m. The company on Monday said it had offered 0.444 new Tritax shares for every UKCP share, leaving it with 76.7% of the merged group and UKCM shareholders with the remainder.

Fraser's Group on Monday said it would start an £80m share buyback up to April 28. In a short statement, the owner of Sports Direct and House of Fraser said the buyback of up to 10 million shares would be used to reduce its share capital.

Sirius Real Estate said on Monday that it has notarised the acquisition of two business parks, one in Köln (Cologne) and the other in Göppingen, for around €40m (£34m). The company, which owns and operates branded business parks in Germany and the UK, said the acquisitions have been made using proceeds from November's £147m (€165m) capital raise.

Economic news

UK retail sales rebounded sharply in January, official data showed on Friday, reversing December's slide. According to the Office for National Statistics, retail sales volumes rose by 3.4% last month, following a downwardly-revised fall of 3.3% in December.

The UK fell into recession at the end of 2023, official data showed on Thursday, after a bigger-than-expected contraction in GDP in the fourth quarter. According to provisional estimates from the Office for National Statistics, GDP contracted by 0.3% in the three months, following a 0.1% decline in the third.

UK house prices fell in December, official data showed on Wednesday, although the rate of decline slowed notably. According to the provisional estimates from the Office for National Statistics, house prices fell by 1.4% at the end of 2023, compared to a revised 2.3% drop in November.

Train drivers at five major railway companies, including Chiltern, c2c, East Midlands, Northern, and TransPennine railways, have extended their strike action for another six months, trade union Aslef announced on Wednesday. The decision came after a vote by the union's members to continue industrial action, given the necessity to re-ballot members every six months.

UK inflation remained unchanged in January, official data showed on Wednesday, coming in narrowly better than forecast. According to the Office for National Statistics, the consumer price index rose 4% in the 12 months to January, unchanged on December. Analysts had been expecting a rise to 4.2%.

The UK unemployment rate eased at the end of last year, official data showed on Tuesday, while average earnings continued to rise. According to the latest figures from the Office for National Statistics, the unemployment rate was 3.8% for those aged 16 and over in the three months to December.

International events

Wholesale prices in America rose more quickly than anticipated last month. According to the U.S. Department of Labor, in seasonally adjusted terms the producer price index rose at a month-on-month pace of 0.3% (consensus: 0.1%).

Americans reined in their spending unexpectedly at the start of 2024. According to the Department of Commerce, in seasonally adjusted terms, retail sales volumes dropped at a month-on-month pace of 0.8% in January to reach $695.78bn.

Factory sector activity in the mid-Atlantic region improved significantly in February, the results of a closely-followed survey revealed. The Federal Reserve Bank of Philadelphia's manufacturing sector gauge jumped from a reading of -10.6 in January to 5.2 for February.

Brussels downgraded growth forecasts for the Eurozone on Thursday, as higher interest rates continue to weigh heavily. Publishing its winter economic forecast, the European Commission said the European Union's economy had started 2024 on a weaker-than-expected footing.

The eurozone managed to avoid a technical recession in the final three months of last year as the bloc's stagnant GDP data was confirmed. GDP grew 0% in the final quarter of 2023, in line with the flash reading, statistics office Eurostat said on Wednesday, which also confirmed that output fell 0.1% in the prior three months.

Eurozone manufacturing rose unexpectedly in December, according to fresh data released on Wednesday, suggesting a revitalisation of industrial output alongside stable employment growth. Industrial production within the common currency area jumped 2.6% month-on-month, following a revised 0.4% increase in November, significantly surpassing the anticipated 0.2% decline.

Inflation rose at a faster-than-expected rate in January, according to the Bureau of Labor Statistics, with shelter prices accounting for much of the increase. The US consumer price index rose by 3.1% year-on-year to 308.417 in January, easing from a 3.4% increase in December but exceeding market expectations for a reading of a 2.9% advance, what would have been the first reading lower than 3% seen since April 2021.Economic sentiment strengthened in Germany this month, a closely-watched survey showed on Tuesday, despite the country's economy continuing to struggle. The latest ZEW indicator of economic sentiment improved 4.7 points in February to 19.9, the seventh consecutive month of increases.

Reporting by Sharecast.com staff and contributors.


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