Weekly review
By Josh White
Date: Friday 28 Feb 2025
(Sharecast News) - The FTSE 100 ended the week up 150.37 points, or 1.74%, closing at 8,809.74 on Friday.
Equity view
Education publisher Pearson on Friday said annual profit rose 10% and unveiled a £350m share buyback as it reiterated guidance for 2025. Full-year adjusted operating profit came in at £600m, at the upper end of guidance, while the final dividend was lifted to 24p a share. Chief executive Omar Abbosh said an accelerated rollout of artificial intelligence across its products remained a priority.
Asset manager Abrdn said on Friday that it has appointed Siobhan Boylan - the current chief financial officer of NatWest's private banking arm Coutts & Co - as its new CFO. Abrdn said that Boyland, who has more than 30 years of experience and significant knowledge from across the financial services sector, is expected to join the company in the summer. Prior to Coutts, Boyland was CFO of Brewin Dolphin and of the asset management subsidiary of Legal & General, LGIM. She also held various senior finance roles at Aviva.
Weir Group reported a resilient 2024 in its final results on Friday, with strong aftermarket demand and improving margins, as it announced the strategic acquisition of mining software provider Micromine. The FTSE 100 company said that for the year ended 31 December, it recorded a 2% increase in orders on a constant currency basis, reaching £2.52bn, while revenue declined 5% to £2.51bn. Adjusted operating profit rose 3% to £472m, with margins expanding 140 basis points to 18.8%.
Engineering firm IMI delivered record profits in FY24, thanks to "good organic growth" and "strong cash generation". IMI said on Friday that full-year revenues had grown 1% to £2.21bn, partly driven by "good demand" for its energy-saving climate control solutions, while operating margins improved by 100 basis points to 19.7% as margins improved in both of its platforms, reflecting strategic execution and strong pricing power. As a result, pre-tax profits were up 8% to an all-time high of £419.0m and basic earnings per share increased 5% to 122.5p.
Taylor Wimpey posted a fall in annual revenues and profits on Thursday, but said it had seen a "robust" start to the new year as demand picked up. The blue chip housebuilder completed 10,593 homes in 2024, down on the previous year's 10,848, while the average selling price fell to £356,000 from £370,000. As a result, revenues eased 3.2% to £3.4bn, while operating profits fell 11.5% to £416.2m. Pre-tax profits were down 32.4% at £320.3m.
The London Stock Exchange posted in line full-year top-line growth, but its profit beat analysts' estimates. "Key highlights for the year include material enhancements to the Workspace platform; the availability of more of our leading datasets across cloud-based platforms, meeting our customers where they want to work; and continued significant progress across products and geographies for Post Trade," LSE boss David Schwimmer said.
Insurer Hiscox reported record full-year profits on Thursday as it hailed "strong returns" from each business segment and announced a $175m share buyback. In the year to the end of December 2024, pre-tax profit rose 9.5% on the previous year to $685.4m. Net insurance contract written premiums ticked up to $3.7bn from $3.6bn and insurance contract written premiums grew 3.7% to $4.8bn, driven by Retail premium growth of $147.3m.
Consumer healthcare giant Haleon reiterated its full-year outlook on Thursday, after posting improved full-year sales and profits. The maker of Sensodyne toothpaste and Centrum vitamins said organic revenues rose 5% in 2024, to £11.2bn, including a 3.7% increase in prices. On a reported basis, revenues dipped 0.6%, largely due to adverse foreign exchange rates after the pound strengthened against the dollar, euro and other key currencies.
Metro Bank on Wednesday said it had struck a deal to sell a portfolio of around £584m performing unsecured personal loans to an unnamed buyer. The transaction is expected to result in a gain of about £11m, the bank said, adding that it would result in an improvement in the common equity tier 1 ratio of around 81 basis points and total capital plus minimum requirement for own funds and eligible liabilities ratio of around 129bps to 23.5% from 22.2%.
Construction and regeneration group Morgan Sindall reported a record full-year performance on Wednesday as it hailed a "significant" contribution from the Fit Out division. In the year to the end of December 2024, adjusted pre-tax profit grew 19% to £172.5m, with adjusted operating profit up 15% to £162.6m and group revenue 10% higher at £4.5bn. The total dividend was boosted 15% to 131.5p a share.
ConvaTec shares were rising on Wednesday morning after it reported a strong set of financial results for 2024, with revenue rising 6.9% to $2.29bn, supported by broad-based growth across its chronic care categories. The FTSE 100 wound care specialist said its adjusted operating profit increased 12.4% to $485m, with an operating margin of 21.2%, up one percentage point from the prior year. Free cash flow to equity grew 32.2% to $302m, while adjusted diluted earnings per share rose 13.7% to 15.2 cents.
Property developer Hammerson said on Wednesday that losses had widened significantly in FY24 as a result of a major impairment of its "value retail" portfolio. Hammerson said IFRS losses ballooned from £51.0m in FY23 to £526.0m in FY24, reflecting a £497.0m value retail impairment and H124 revaluation loss. Adjusted earnings of £99.0m were down from £116.0m a year earlier, principally due to impacts stemming from disposals.
Consumer products giant Unilever has announced that its chief executive is leaving "by mutual agreement" after just 19 months at the helm. Hein Schumacher, who became CEO in July 2023 after serving as a board member for one year, is to step down on 1 March and will exit the firm on 31 May. Chairman Ian Meakins thanked Schumacher "for resetting Unilever's strategy [...] and for the solid financial progress delivered during 2024".
Online trading platform CMC Markets said on Tuesday that chief financial officer Albert Soleiman has agreed to step down with immediate effect. CMC said Soleiman will remain with the company for a period of time to support an orderly handover. Chief executive Lord Peter Cruddas said: "On behalf of CMC Markets plc, I would like to thank our outgoing CFO, Albert Soleiman, for his contributions to the firm over his long tenure with the company and in his roles as CFO and as a director.
Unite Group reported a sharp rise in earnings for 2024 on Tuesday, supported by strong rental growth and high occupancy rates. The FTSE 100 student accommodation provider said adjusted earnings rose 16% to £213.8m, while adjusted earnings per share increased by 5% to 46.6p. It posted an IFRS profit attributable to owners of £441.9m, a more than fourfold increase on the prior year, with IFRS diluted earnings per share surging 291% to 96.1p.
Specialty chemicals group Croda met its profit guidance in 2024, though numbers were weighed down by a drop in annual sales and weaker margins, with the company targeting £25m of cost savings in 2025. The company said it was accelerating actions to grow earnings and improve returns, such as driving margin recovery by increasing asset utilisation and realigning cost base. Croda reported an adjusted pre-tax profit of £273.1m at constant currency for the 12 months to 31 December, down 11.6% on the year before but in line with the £260m-280m guidance range.
National Grid has announced the sale of its National Grid Renewables US onshore renewables business to Brookfield Asset Management and its institutional partners, including Brookfield Renewable Partners, on Monday. The FTSE 100 energy infrastructure firm said the move formed a key element of its ongoing strategy to focus on its core networks business and streamline its operations, following a strategic announcement made in May last year.
Pharmaceutical giant Indivior said on Monday that the US Food and Drug Administration has approved label changes for its opioid addiction treatment SUBLOCADE. Indivior said the changes included a rapid initiation protocol and alternative injection sites, marking "a significant advancement" in the treatment of moderate to severe opioid use disorder. The FTSE 250-listed firm stated healthcare providers can now initiate treatment with SUBLOCADE after a single dose of transmucosal buprenorphine and a one-hour observation period to confirm tolerability.
Property investment firm CLS Holdings said on Monday that earnings and net tangible assets were both seen in line with market expectations. CLS said FY24 property valuations were down 5.8% in local currency. However, when including the strengthening of Sterling in the year, valuations were down by 8.3%. The FTSE 250-listed firm stated valuations across all of its markets "appear to be bottoming out", with Germany and France flat in H2, reflecting greater rental indexation and interest rate reductions supporting valuation yields.
XPS Pensions Group on Monday said it was buying UK insurance consultancy Polaris Actuaries for £23.4m. The company said the deal would help it move into the "fragmented" UK insurance consulting market. A further £35m will be payable in three years contingent on achieving certain stretching business performance criteria, it added. The deal is expected to complete at the end of February this year.
Economic news
Millions of UK bank customers were reportedly facing issues receiving their wages on Friday, as Nationwide, First Direct, Lloyds, and Halifax experienced online banking issues. The disruption, which coincided with payday for many Britons, left users unable to make or receive payments. Nationwide confirmed delays to some incoming and outgoing transactions, but said that direct debits and standing orders were unaffected and "in a queue".
A potential trade deal between the UK and US could mean that additional tariffs placed on trans-Atlantic exports might be "not necessary", according to Donald Trump. At a White House press conference following a visit from UK prime minister Keir Starmer, Trump said that a deal between the two nations could be struck "very quickly". The two premiers had "great discussions on trade", according to the US president, who labelled Starmer as a "tough negotiator".
Bank of England deputy governor Dave Ramsden said risks to hitting the bank's 2% inflation target as "two-sided" arguing for a "gradual and careful" approach to interest rate cuts, although the pace of these did not have to be slow. In a speech at South Africa's Stellenbosch University's Bureau for Economic Research, Ramsden said he was "less certain than I was about the outlook for the UK labour market, and its implications for future inflation persistence and growth".
UK house prices rose more than expected in February, according to data released on Friday by mortgage lender Nationwide. Prices were up 0.4% on the month following a 0.1% increase in January, beating expectations for a 0.2% jump. On the year, house prices rose 3.9% in February, down from 4.1% the month before. The average price of a home stood at £270,493, up from £268,213.
The UK government is poised to approve a second runway at Gatwick, it was confirmed on Thursday, just weeks after the chancellor backed a similar expansion at Heathrow. In a written ministerial statement, transport secretary Heidi Alexander said she was "minded to approve" the £2.2bn construction project.
Restaurant, pub and bar sales in the UK retreated last month with analysts blaming Dry January and the Christmas squeeze on consumer spending. According to the Hospitality Business Tracker from CGA by NielsenIQ and RSM, sales across the industry were 1.3% lower than the year before in January, after year-on-year growth of 3.2% in December. This was the lowest figure for the tracker in nine months and only the second month of a year-on-year decline since early-2022.
As many as one in 10 part-time retail workers could lose their jobs as a result of upcoming regulatory changes, it emerged on Tuesday, in a stark warning from the industry as to the looming cost changes in the UK's biggest-employing private sector. According to the British Retail Consortium (BRC), up to 160,000 roles could be at risk of being lost over the next three years due to rising costs, driven by measures announced at the last Budget. Those measures include increasing employer National Insurance contributions (NICs) and a higher National Living Wage.
Britain's international aid budget is being slashed to fund an increase in defence spending to 2.5% of GDP from 2027, Prime Minister Keir Starmer said on Tuesday. In a statement to the House of Commons ahead of his visit to Washington this week to meet US President Donald Trump, Starmer said the government would start the biggest sustained increase in defence spending since the end of the cold war but warned that this would involve "difficult choices".
International events
US personal consumption expenditures growth eased to 2.5% on an annualised basis in January, according to the Bureau of Economic Analysis, down from 2.6% in December. At the core level, which strips out volatile food and energy, prices were also 2.6% higher year-on-year, down from December's 2.9% increase. On a monthly basis, both headline PCE and the core reading advanced 0.3%, as expected by economists.
German inflation was higher-than-expected at 2.8% in February, according to flash data from the Federal statistics agency Destatis published on Friday. The figure was unchanged from January and compared to estimates of 2.7%. Core inflation, which strips volatile items such as food and energy costs, was 2.6%, down from January's 2.9%.
France's inflation rate dropped to below 1% in February for the first time in four years, with expectations rising that the European Central Bank will lower interest rates again next week as price pressures ease. The annual increase in France's consumer price index (CPI) more than halved from January, slowing from 1.7% to just 0.8% this month, according to the National Institute of Statistics and Economic Studies (otherwise known as INSEE). This was the lowest rate of inflation since February 2021 and significantly below the 1.2% level expected by economists. French inflation had peaked in the current cycle at 6.3% in February 2023.
The number of unemployed people in Germany increased slightly in February to its highest since the peak of the pandemic in 2020, though the jobless rate was unchanged, data on Friday showed. According to the Federal Employment Agency, the seasonally adjusted number of unemployed people increased by 5,000 last month to 2.989m, reaching the highest level since August 2020. However, that was under the 11,000 increase registered in January and well below the 15,000 increase expected by economists.
German retail sales in January beat expectations, climbing 0.2% month-on-month after a 1.6% fall in December, according to official data published on Friday. Expectations had been for a print of zero. On an annual basis, retail sales rose by 2.9% in January, compared to 1.8% in December. In other statistics released on Friday, German import prices increased by 3.1% year on year in January, compared with forecasts of a 2.7% rise.
Donald Trump said on Thursday that his proposed tariffs on Mexico and Canada would come into effect on 4 March and also stated that Chinese imports would be hit with an additional 10% tariff. Trump's sweeping 25% tariffs on imports from Mexico and Canada were put on a one-month pause back on 3 February. Trump claimed that illicit drugs were "still pouring" into the USA from Mexico and Canada at "very high and unacceptable levels", even as America's neighbours increased their efforts to monitor their borders.
Americans lined up for unemployment benefits at an accelerated clip in the week ended 22 February, according to the Labor Department. Initial jobless claims surged by 22,000 to 242,000 last week, the biggest increase in more than two months and far above expectations for a broadly flat reading of 221,000, while continuing claims eased by 5,000 at 1.86m. The four-week moving average, which aims to smooth out week-to-week volatility, increased by 8,500 week-on-week to 224,000.
Donald Trump has confirmed he plans to impose 25% tariffs on the European Union, claiming the bloc was "formed to screw the United States". Speaking at his first cabinet meeting on Wednesday - ahead of a meeting on Thursday with UK prime minister Kier Starmer and just two days after he met with French counterpart Emmanuel Macron - the US president said: "We have made a decision and we'll be announcing it very soon. "It'll be 25% generally speaking, and that will be on cars and all other things."
US new home sales fell to their lowest in three months in January after falling more than expected, according to figures out on Wednesday from the Census Bureau and the Department of Housing and Urban Development. Sales of new single-family houses totalled 657,000 last month, down 10.5% from the revised December rate of 734,000, which was up 8.1% on November. This was below the 664,000 sold in January 2024 and under the consensus forecast of 680,000.
Ukraine President Volodymyr Zelenskyy confirmed that a deal with the US on minerals as compensation for military aid did not contain any guarantees on the future security of his country after any armistice with Russia. Zelenskyy was planning to travel to Washington on Friday to see his US counterpart Donald Trump to sign the agreement. Speaking to reporters on Wednesday he described the deal between the two countries as a 'framework', adding that its success would depend on Trump.
German consumer sentiment was set to deteriorate in March, according to a survey released on Wednesday by GfK and the Nuremberg Institute for Market Decisions (NIM). The forward-looking consumer climate index fell to -24.7 points from a revised -22.6 the month before, marking the lowest level since April 2024. Analysts were expecting it to edge up to -21.4 points.
Consumer confidence in the United States declined to below its historic average in February as pessimism about the future returned, according to data out on Tuesday from The Conference Board. The business membership and research organisation's closely watched consumer confidence index fell by 7.0 points this month to 98.3, with both views on both the current and future environments worsening. This was the largest monthly decline since August 2021, and below the historic average level of 100.
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