Weekly review
By Josh White
Date: Friday 14 Feb 2025
(Sharecast News) - The FTSE 100 ended the week up 31.93 points, or 0.37%, closing at 8,732.46 on Friday.
Equity view
Citing people familiar with the matter, Bloomberg reported that HSBC will initiate a fresh round of layoffs at its investment bank as early as Monday. The first cuts will be carried out in Asia and then be expanded to the rest of the lender's staff. The number of redundancies was not clear.
Segro adopted an upbeat outlook on Friday, after lower interest rates and higher rental income boosted annual profits. The warehouse property developer said net rental income jumped 7% in 2024 to £628m, boosted by both development completions and like-for-like rental growth of 5.8%. In total, there was £91m of new headline rent commitments during the period, the blue chip's third best year on record.
Annual profit at UK bank NatWest just beat expectations as it grew its loan book and pulled in more deposits, boosted by an increase in customers. Pre-tax operating profit rose 0.3% to £6.2bn in the 12 months to December 31 compared with estimates of £6.1bn. Net interest margin - the difference between loan and savings rates - was 1 basis point higher at 2.13%.
Shares in Wood Group were tanking on Friday morning, after it flagged weaker-than-expected fourth-quarter trading in an update, and warned of negative free cash flow in 2025. The FTSE 250 company said it expected to report full-year 2024 adjusted EBITDA of $450m to $460m and adjusted EBIT of $205m to $215m. It said actions taken in the fourth quarter to mitigate weaker-than-expected trading included canceling employee bonuses and actively managing working capital.
Insurer Lancashire Holdings said on Thursday that it expects to incur net ultimate losses of between $145m and $165m related to the California wildfires. This estimate falls within its modelled loss ranges for this type of catastrophe event.
Coca-Cola HBC said it expected organic operating profit to rise by 7% - 11% this year amid a "challenging" macroeconomic environment. The bottling company, 20% owned by the drinks brand of the same name, also said organic revenue was forecast to grow 6% - 8% in the year, compared with average market expectations of 7.3% in a company-compiled poll. Average analyst forecasts tipped 10.7% average growth in 2025 organic earnings before interest and taxes (EBIT).
British American Tobacco saw full-year profit and revenues edge up. The cigarette maker said that profit from operations grew 1.4% to reach £2.736m, whilst revenues on an adjusted and organic basis grew by 1.3% to £25.87bn. Operating margins meanwhile were flat on that same basis at 46%. Free cash pre-dividend shrank by 5.5% to £7.9bn.
Barclays saw profit before tax jump over the last three months of 2024 to reach £1.7bn, versus £0.1bn one year before. That came on the back of a 24% year-on-year surge in group income to £7.0bn. Net interest income for the quarter printed at £3.5bn (consensus: £3.29bn), while the profitability of its investment bank hit £2.61bn (consensus: £2.47bn).
Merchant banking group Close Brothers has revealed that it is to put £165m aside to cover costs associated with the mis-selling of motor finance, following last year's Court of Appeal judgment. The provision, which includes estimates for operational and legal costs, as well as the potential remediation for affected customers, will reduce the company's CET1 capital ratio to 12.0%, down 150 basis points from 13.5% on 31 December. Close Brothers said the hit would be recognised in its second-half results.
Indivior announced a delay in the US Food and Drug Administration's (FDA) final review of proposed label changes for its 'Sublocade', or buprenorphine extended-release, injection on Wednesday. The company was expecting a decision by 7 February, as per the Prescription Drug User Fee Act (PDUFA) timeline. It said on Wednesday that the FDA informed the company on 11 February that there were no outstanding issues following acceptance of the proposed label, which includes a rapid initiation protocol and alternative injection sites.
TBC Bank impressed on Wednesday by reporting record revenues and a big jump in profits in the fourth quarter, with the UK-listed Georgian bank confident of hitting its strategic targets for 2025. Total operating income was up 22.6% year-on-year at an all-time high of 784m Georgian lari (£226m) in the final three months of 2024, with net interest income rising 14.9% to GEL508m, net fee and commission income up 34.4% at GEL148m, and other non-interest income was 46.4% higher at GEL128m.
Shares in Barratt Redrow surged on Wednesday as the housebuilder said it expected full-year earnings to be at the upper end of expectations after a jump in interim profits and also announced a £100m share buyback. The company on Wednesday posted pre-tax profit of £117.2m, up 23% and lifted its dividend by a quarter to 5.5p a share. Consensus estimates for 2025 adjusted profit before tax were £542m with a range of £506m to £588m. Shares in the company were up 8% in early London trade.
Sports betting and gaming group Entain has revealed that chief executive Gavin Isaacs has left the company with immediate effect after just five months. Entain, which runs brands like Coral, Ladbrokes and Foxy Bingo as well part-owning the BetMGM brand in the US, did not disclose a reason for the abrupt departure, but said that the decision was "by mutual agreement". He will be replaced by non-executive chair Stella David on an interim basis until a permanent replacement has been found.
Shares in Bellway fell sharply on Tuesday despite the UK housebuilder reporting strong growth for the first half and reiterating its full-year guidance, as the firm highlighted the "sensitivity of customer demand" amid a rise in mortgage rates over recent months. Bellway said total housing completions were 4,577 homes in the six months to 31 January, up 11.9% on last year, with the average selling price rising to £310,600 from £309,278. Housing revenues increased by 12% to £1.42bn.
BP reported a fourth-quarter loss of $1.96bn in an update on Tuesday, swinging from a profit of $371m in the same period a year earlier. For the full year, profit attributable to shareholders was $381m, down sharply from $15.24bn in 2023. The FTSE 100 energy giant cited weaker refining margins, lower oil and gas realizations, and a higher tax rate as key factors affecting performance. Replacement cost loss for the fourth quarter was $1.95bn, compared with a profit of $1.53bn in the prior-year period.
The PRS REIT declared an increased interim quarterly dividend of 1.1p per share for the second quarter of its financial year on Tuesday, up from 1p in the same period last year. It said the increase reflected continued rental and earnings growth, with dividends declared for the first half of the financial year now totaling 2.1p per share, fully covered by EPRA earnings. The FTSE 250 real estate investment trust said the second-quarter dividend, which would be paid entirely as a property income distribution, was scheduled for payment on 7 March to shareholders on the register as of 21 February.
Chemicals group Johnson Matthey has announced that its chair of seven years Patrick Thomas will step down later this year, while its CFO of four years will be replaced by the head of finance at DS Smith. The changes come as the business "enters the next phase of its transformation strategy to deliver a step change in cash generation, higher returns on capital and sustainable shareholder value," the company said in a statement.
Kosmos Energy said that the first liquified natural gas production has been achieved at the BP-operated Greater Tortue Ahmeyim project, offshore Mauritania & Senegal. Gas started to flow from wells at the end of 2024 to the floating production storage and offloading vessel as part of the commissioning process. Kosmos will start to recognise gas entitlement production from the project in its quarterly statements once gas is liquefied.
CAB Payments said on Monday that Richard Hallett has decided to step down as chief financial officer and executive director of the group and its subsidiary, Crown Agents Bank Limited, with immediate effect. Hallett, who has been with the company for nine years, "has been instrumental in cementing its position as a market leading provider of FX and cross-border payments for hard-to-reach markets," CAB said.
Lloyds of London investor Helios Underwriting, which is currently searching for a new CEO, has announced that executive chair Michael Wade is to also leave the company at the end of the month. The company, which is the only publicly traded company with a portfolio of syndicates at Lloyd's, said that Wade - who only joined in June 2023 as non-executive chair - has decided to step down from his role "to continue developing his non-executive portfolio".
Economic news
The UK house market softened slightly in January, a closely-watch survey showed on Thursday, as the year got off to a slower start. According to the latest UK residential property survey from the Royal Institution of Chartered Surveyors, house prices continued to grow in January, with a net balance of 22. However, that was below both the 26 recorded in December and the 27 expected by analysts. Respondents were also more cautious about short-term outlook. The balance for price expectations in the next three months fell to 3 from 14.
The UK economy unexpectedly grew in the fourth quarter, according to figures released on Thursday by the Office for National Statistics. Gross domestic product rose 0.1% in the three months to December, beating expectations for a 0.1% contraction. ONS director of economic statistics Liz McKeown said: "The economy picked up in December after several weak months, meaning, overall, the economy grew a little in the fourth quarter of last year."
Subdued domestic demand and a weak labour market are likely to keep a lid on inflationary pressures this year, according to a Bank of England policymaker who voted for an 'activist' 50-basis point cut in interest rates last week. Catherine Mann, who's been a member of the Monetary Policy Committee since 2021, said the 6 February decision to lower interest rates to a two-year low of 4.5% was taken "against a backdrop of surprisingly weak economic activity in the second half of 2024 along with a modest further loosening in the labour market".
UK shoppers braced stormy weather in January to take advantage of promotional deals, according to data out on Tuesday, with sales rising strongly compared with the year before. According to the British Retail Consortium-KPMG retail sales monitor, total retail sales increased at an annual rate of 2.6% last month, down from the 3.2% year-on-year growth seen in December but well ahead of the 1.2% gain recorded in January 2024.
International events
The eurozone economy grew 0.1% in Q424, according to Eurostat, ahead of preliminary estimates for a flat reading. The bloc's gross domestic product increased at an annual rate of 0.9% in Q4, in line with initial estimates of 0.9%, even as the EU's two largest economies contracted, with German GDP contracting by 0.2% and French GDP decreasing by 0.1%, while Italy stagnated for a second straight quarter. Year-on-year, Euro Area GDP grew by 0.9%. Eurozone employment rose by 0.1% in the final three months of 2024 to 171.17m, slowing from the previous quarter's 0.2% increase but in line with preliminary estimates.
Shein's much-anticipated market debut could be delayed, it was reported on Friday, following moves by US president Donald Trump to crack down on small imports from China. The fast fashion brand was expected to debut in London in the first half of 2025. However, its suspected valuation was dealt a blow last week when the Trump administration said it would end the section 321 de minimis exemption. Under the rule, which has helped Shein keep prices in the US low, shipments worth less than $800 are exempt from import duties.
Inflation at the wholesale level in the US came in a tad hotter-than-expected at the start of 2024. According to the US Department of Labor, in seasonally adjusted terms, so-called final demand prices increased at a month-on-month pace of 0.4% in January. That was only one tenth of a percentage point more than forecast by economists. However, the prior month's rate of increase was revised up from an initial estimate of 0.2% to 0.5%.
Americans lined up for unemployment benefits at a decelerated pace in the week ended 8 February, according to the Labor Department. Initial jobless claims fell by 8,000 to 213,000 in the first week of February, better than the smaller decline of 6,000 predicted by analysts, while continuing claims dropped by 36,000 to 1.85m, also beating forecasts of 1.88m. The four-week moving average, which aims to strip out week-to-week volatility, decreased by 1,000 to 216,000, and the non-seasonally adjusted claims count dropped by 11,000 to 231,000.
The eurozone's ailing manufacturing sector ended 2024 on the back foot, official data showed on Thursday, after industrial production fell by more than expected. According to first estimates from Eurostat, the statistical office of the European Union, industrial production fell by 1.1%, reversing November's 0.4% uplift. Analysts had expected a smaller 0.6% decline in the single currency bloc. Dragging the numbers lower was a 2.6% slump in capital goods and a 1.9% fall in intermediate goods, which helped offset a 5.1% jump in non-durable consumer goods.
American intelligence believed that Israel was considering large strikes against Iran's nuclear facilities. Citing officials familiar with the report, the Wall Street Journal reported on 12 February that the conclusions of the analytical assessment were drawn around New Year's Eve. US president Donald Trump had recently said that he prefers a negotiated solution, although a national-security memorandum signed during the preceding week did not rule out strikes should negotiations fail, the Journal reported.
German inflation was confirmed at 2.3% in January, the Federal Statistical Office Destatis said on Thursday. A fall in food and energy prices helped pull inflation down by 0.2% month on month, also confirming flash estimates. "On the other hand, above-average increases in service prices continued to drive up inflation," Destatis said.
Wall Street stocks were lower early on Wednesday as traders digested a hotter-than-expected January consumer inflation report. As of 1530 GMT, the Dow Jones Industrial Average was down 0.75% at 44,260.87, while the S&P 500 lost 0.57% to 6,033.96 and the Nasdaq Composite came out the gate 0.31% weaker at 19,582.97. The Dow opened 332.78 points lower on Wednesday, extending losses recorded in the previous session following Congressional testimony from Federal Reserve chairman Jerome Powell.
Optimism among small businesses in the United States retreated from a six-year high in January, with uncertainty "on the rise", according to the National Federation of Independent Business. The NFIB's monthly Small Business Optimism Index came in at 102.8 last month, down from 105.1 in December, which was the highest mark since late-2018. The consensus forecast was for a reading closer to 104.6. Nevertheless, January was the third straight month of a print above the 51-year average of 98.
The US government is to impose 25% tariffs on steel and aluminium imports into the country from Monday, president Donald Trump has announced. The latest protectionist measures come ahead of a string of reciprocal tariffs that Trump has promised to unveil in the coming days, targeting countries that already charge additional duties on American-made goods. "Very simply, it's, if they charge us, we charge them," Trump said to reporters onboard Air Force One on his way to the NFL Super Bowl on Sunday.
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