Weekly review
By Josh White
Date: Friday 31 Jan 2025
(Sharecast News) - The FTSE 100 ended the week up 171.61 points, or 2.02%, closing at 8,673.96 on Friday.
Equity view
Octopus Renewables Infrastructure Trust reported a slight fall in net asset value (NAV) for the fourth quarter on Friday, but increased its dividend guidance for 2025. The company, which invests in a portfolio of renewable energy assets in Europe and Australia, said NAV as of 31 December totalled £570.4m or 102.65p per share, down from £582.7m of 103.77p three months earlier.
Tribal Group's share price surged on Friday morning after the education tech and services group delivered a bullish fourth-quarter trading update and confident outlook for 2025. The company said that adjusted EBITDA for 2024 would be "substantially ahead" of current market expectations, with analysts currently forecasting no change on the £14.4m made in 2023.
James Halstead said it expects to hit market forecasts with its full-year forecasts, though increased confidence in international markets has been offset by subdued activity in its core UK market. In a first-half trading update for the six months to 31 December, the company said that sales were slightly below last year with pre-tax profits comparable the year before.
Tritax Big Box reported a strong 2024 operational performance in an update on Friday, having secured £22.7m in additional contracted rent, including one of the UK's largest pre-lets of the year - a one million square foot facility leased to a global e-commerce company. The FTSE 250 real estate investment trust said active management contributed £11.6m in new contracted rent, more than doubling the £4.9m achieved in 2023.
Corporate software group Sage said it has made a strong start to its new financial year with revenues rising by a tenth in the first quarter, as all regions delivered solid growth. Revenues totalled £612m in the three months to 31 December, up from £558m a year earlier, with Sage Business Cloud revenues up 13% at £502m. Within the cloud division, cloud-native revenues grew by 22% to £208m.
Private equity and infrastructure investor 3i Group said it is on track to deliver strong full-year results after a solid third quarter, driven by ongoing growth in flagship portfolio company Action. Group net asset value per share increased to 2,457p by 31 December, up from 2,261p at the half-year stage (30 September), despite a negative foreign exchange translation impact of £476m of 49p per share. 3i reported a total return of 20% for the first nine months of its financial year in total.
Telecommunications giant BT said on Thursday that Q3 revenues had fallen amid weaker phone sales and a struggling business unit. BT said adjusted revenues fell 3% to £5.18bn in the three months ended 31 December on the back of a 12% decline in equipment revenue, mainly handset trading. BT's Q3 revenue result was short of analyst expectations for revenues of £5.25bn.
Mining and commodities giant Glencore delivered on its targets for 2024 production volumes on the back of stronger second-half performances from its key commodities. In a production update ahead of its full-year results next month, the company reported a 6% fall in annual copper output to 951,600 tonnes.
Low-cost computer platform maker Raspberry Pi said it expected to make annual adjusted core earnings of at least $36m. The company, which makes small single-board computers for enthusiasts and listed in London last June, said gross profit from the sale of accessories and microcontrollers was strong in the second half.
AJ Bell said on Wednesday that assets under administration (AuA) in its platform business hit a record in the first quarter as customer numbers grew. In an update for the three months to the end of December, the company said AuA rose 17% in the last year and 3% in the quarter to a record £89.5bn. Customer numbers were up 16% in the year and 4% in the quarter to 561,000.
Windfarm investor Greencoat UK Wind on Wednesday cut long-term generation and net asset value forecasts after a revision to energy yield estimates across its portfolio. The company said fourth-quarter NAV fell 7.4p a share to £3.41bn or 151.2p a share compared with the previous three months.
WH Smith posted a 4% jump in revenue for the 21 weeks to 25 January on Wednesday as it hailed strong momentum in the travel business, while high street sales fell as expected. Total travel revenue rose 8% in constant currency and 6% on a like-for-like basis, while revenue from the high street business fell 6% and 3%, respectively.
Real estate investment trust Segro has announced that its joint venture with a Canadian pension fund has bought six logistics assets from Tritax EuroBox for €470m (£394m). Segro European Logistics Partnership (SELP) has purchased 370,000 square metres of Tritax assets in Breda and Roosendaal in the Netherlands, the Frankfurt corridor and the Rhine-Ruhr region in Germany.
Travel food outlet operator SSP Group held annual guidance after like-for -like sales grew 6% in the first quarter driven by continued structural growth across the travel industry around the world. The company, which operates the Upper Crust and Ritazza chains at airports and train stations, on Tuesday said group sales rose 14% on a constant currency basis in the three months to December 31.
Pets at Home backed its full-year guidance on Tuesday but reported a dip in third-quarter revenue as it pointed to a softer performance from its retail business. In an update for the 12 weeks to 2 January, the company said total group revenue fell 0.2% to £361.6m, with group like-for-like revenue down 1%.
Pest control giant Rentokil Initial has said it expects to meet expectations with its 2024 results, helped by a pick-up in organic growth in North America. Rentokil reported that organic revenues in North America grew by 2.3% in the fourth quarter, up from 1.4% in the third.
GSK has announced that a pre-filled syringe version of its Shingrix shingles vaccine has been accepted for review by the European Medicines Agency. Shringrix, which has already been administered to over 25m people across the continent since 2018, currently comes as a separate powder and liquid adjuvant, which need to be reconstituted in separate vials prior to administration.
Drinks maker Diageo said on Sunday that it has no intention to sell its Guinness brand or its stake in Moët Hennessy. The very brief statement came after Bloomberg reported on Friday that Diageo was reviewing its portfolio, including Guinness beer and a Champagne and Cognac partnership with LVMH, as chief executive officer Debra Crew looks to revive growth.
Diversified Energy announced an agreement on Monday to acquire Maverick Natural Resources, a portfolio company of EIG, for $1.275bn. The FTSE 250 company said the acquisition would enhance its asset base, production scale, and commodity mix, while supporting its long-term strategy of generating sustainable free cash flow and shareholder returns.
Johnson Matthey said in an update on Monday that despite challenging market conditions, it had made significant progress with its transformation strategy, and was taking additional steps to enhance cash generation and returns on capital. The FTSE 250 company said that since chief executive officer Liam Condon's appointment in 2022, it had implemented a series of measures to optimise operations.
Economic news
Growth in UK house prices eased in January, according to figures released on Friday by Nationwide. House prices ticked up 0.1% on the month in January following a 0.7% increase in December 2024, missing expectations for 0.3% growth. On the year, house prices rose 4.1% in January following a 4.7% jump the month before.
UK mortgage approvals sparked in December, official data showed on Thursday, easily beating expectations. According to the latest money and credit report from the Bank of England, net mortgage approvals for house purchases ticked up to 66,526 from 66,061 in November. Most analysts had expected a fall, to an average of 65,400. Mortgage approvals eased by 2,300 in November.
UK car and van output was forecast to fall sharply after an 11.8% slump in production to below one million units in 2024, the industry's trade body warned on Thursday. Factories produced a total of 905,233 units in the year, the Society of Motor Manufacturers and Traders (SMMT) said, adding that it expected further falls as the Stellantis plant in Luton is closed. It now expects UK car and light van production to be around 839,000 units in 2025 before rising to 930,000 units in 2027, with the potential to get back above one million units in 2028, and more than 1.1 million by 2030.
The chancellor has backed a third runway at Heathrow, claiming on Wednesday that the controversial expansion will boost the economy and create 1000s of jobs. Speaking at a new Siemens plant in Oxfordshire, Rachel Reeves confirmed the government support for the project, and invited proposals to be brought forward by the summer. She said the west London airport "badly needed" the runway, because "for decades its growth has been constrained".
Prices at UK tills decreased in January as retailers offered "deep discounts" on things like furniture and fashion, according to the British Retail Consortium, though upcoming increases to labour-market bills could reignite inflationary pressures in the spring. According to the BRC-NeilsenIQ shop price index for January, shop prices fell 0.4% month-on-month following a flat reading in December. While food prices rose 0.5%, up from 0.1% the month before, non-food prices reduced by 0.9% after a 0.1% decline previously.
The average price of rent in the UK excluding London fell for the first time since pre-pandemic 2019 in the fourth quarter, according to Rightmove, as supply continues to improve. The property platform announced on Tuesday that the average advertised rent of properties coming to market outside the capital was £1,341 per calendar month over the final three months of 2024, down 0.2% on the preceding quarter. This brings an end to many months of new record rents. While rentals still cost 4.7% more than they did the previous year, this was the lowest rate of annual rent inflation since 2021, having slowed significantly since peaking at 12% in 2022.
International events
Americans spent more freely at the tail-end of 2024, while price pressures ebbed as forecast. According to the Department of Commerce, in seasonally adjusted terms personal incomes grew at a month-on-month pace of 0.4% (consensus: 0.4%). Personal consumption expenditures meanwhile were up by 0.7% (consensus: 0.5%), following a 0.6% rise during the previous month.
German inflation has unexpectedly fallen to 2.3% this month, according to official flash estimates published on Friday. Economists were expecting no change to the figure. The Federal statistics office said prices fell 0.2% month on month. The core inflation rate - which excludes volatile items such as food and energy - provisionally printed at 2.9%. Final results will be published on February 13.
Retail sales in Germany unexpectedly dropped by their most in more than two years in December, according to the Federal Statistical Office (Destatis) on Friday. Retail sales fell by 1.6% over the month of December in real terms (adjusted for price), following a revised 0.1% decline in November, making the largest monthly drop since October 2022. The consensus forecast was for a monthly increase of 0.2%.
Economic activity in the US slowed at the end of 2024, but the underlying trends were much stronger. According to the Department of Commerce, gross domestic product expanded at a quarterly annualised pace of 2.3% over the three months ending in December. That was short of economists' forecasts for a rate of expansion of 2.6%.
US pending home sales unexpectedly slumped in December, pulling back after four straight months of growth, according to figures from the National Association of Realtors on Thursday. The number of homes that are under contract to be sold fell by 5.5% last month, dropping across all four major regions of the US, with the most significant fall in the West. The consensus forecast was for no change following a 1.6% gain in November.
US jobless claims fell more than expected in the week ended 25 January, according to the Labor Department, marking a sharp pull-back from the previous week's two-month high. Initial jobless claims fell by 16,000 week-on-week to 207,000, well and truly missing expectations for a reading of 220,000. Continuing claims fell by 42,000 from the prior week's more than three-year high to 1.85m, while the four-week moving average, which aims to strip out week-to-week volatility, was up by 6,000 at 1.87m.
The European Central Bank cut rates again and expressed confidence that inflation would continue to head lower. Disinflation "is well on track" and expected to return to the 2.0% medium-term target in 2025, the monetary authority said in its policy statement. Wage growth was moderating as they had anticipated, in part due to company profits acting as a buffer.
The eurozone economy flatlined in the final quarter of 2024, according to flash estimates published on Thursday. Eurozone GDP growth came in at 0% compared with the previous quarter's growth of 0.4%, the European Commission stats agency said. Economists had expected growth of 0.1%. In a separate release, the eurozone seasonally-adjusted unemployment rate in December was 6.3%, up from 6.2% in November 2024 and down from 6.5% in December 2023, according to Eurostat.
German GDP contracted more than expected in the final three months of 2024, according to flash estimates published on Thursday. Gross domestic product (GDP) was 0.2% lower year on year in 2024 than in the previous year against estimates of 0.1%, the federal statistics office Destatis said.
America's central bank stood pat on monetary policy as economists had anticipated and appeared to be biding its time before making any further changes to interest rates. The Federal Reserve kept its target range for official short-term interest rates at 4.25-4.50%.
US mortgage applications fell 2% week-on-week in the seven days ended 24 January, according to the Mortgage Bankers Association of America. Last week's decline came as benchmark mortgage rates remained above the 7% threshold despite a drop in long-dated Treasury yields. Applications to refinance a mortgage fell 7%, while applications to purchase a new home slipped 0.4%.
German consumer sentiment weakened in January, according to a widely-read survey published on Wednesday. The consumer sentiment index, published by GfK and the Nuremberg Institute for Market Decisions (NIM), fell to -22.4 points from -21.4 points the month before and expectations of a reading of -20.0.
US durable goods orders unexpectedly fell in December, dropping by their most in six months, as a result of a big decline in orders for transportation equipment. The total value of orders for manufactured durable goods was $276.1bn last month, down 2.2% on November, according to the US Census Bureau. The consensus forecast was for a 0.6% increase. That was an acceleration from a revised 2.0% decline in November, and the biggest fall since June.
Consumer confidence in France improved more than expected to a three-month high in January but still remained well below the long-term average. According to the National Institute of Statistics and Economic Studies (otherwise known as INSEE), the household confidence index rose to 92 this month, up three points from 89 in December and ahead of the 90 reading predicted by analysts. This was the highest reading since October, but below the average print of 100 since January 1987.
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