London midday: FTSE weaker as ex-divs weigh; Lloyds, Centrica gain
By Michele Maatouk
Date: Thursday 20 Feb 2025
(Sharecast News) - London equity markets were still in the red by midday on Thursday, dragged lower by a host of ex-dividend stocks, as investors mulled a slump in consumer confidence and results from the likes of Lloyds and Centrica.
The FTSE 100 was down 0.4% at 8,679.44.
Russ Mould, investment director at AJ Bell, said: "The FTSE 100 started Thursday modestly in the red as some big names on the index traded without the rights to their upcoming dividends.
"Overnight US shares had an uneventful session, while Asian shares largely fell amid continuing nervousness about the impact of US tariffs."
Investors were mulling a survey out earlier from the British Retail Consortium, which showed that consumer confidence worsened this month, with views about the economic situation and personal finances taking a hit.
The BRC Consumer Sentiment Monitor for February showed that 50% of people expect the state of the UK economy to worsen over the next three months, up from 48% in January and 42% in December.
With just 13% of consumers expecting better conditions and 32% predicting no change, that nets out to a balance of -37, down from -34 the month before.
This was the fifth straight month of worsening expectations, and a sharp drop since the summer, when more people predicted an improvement in conditions than a deterioration.
"People's expectations of the economy reached a new low, having fallen almost 40 points since July 2024," said the BRC's chief executive Helen Dickinson.
Consumer views of their own financial situation fell to a balance of -11 in February from -4 in January, and while personal retail spending expectations rose to -5 from -9, this may have been driven by expectations of higher prices in the coming months, the BRC said.
"With many businesses warning of the impact that April's employer NIC's increase will have on hiring, and the rising energy price cap pushing up the cost of domestic bills, it is little surprise that many households are worried," Dickinson said.
Two-thirds of retailers have said that prices will have to rise due to £7bn of additional costs coming their way, which include higher employer national insurance contributions and a new packaging levy, the BRC said.
"With many businesses warning of the impact that April's employer NIC's increase will have on hiring, and the rising energy price cap pushing up the cost of domestic bills, it is little surprise that many households are worried. And while there was a positive increase in expectations of personal retail spending, this may be largely driven by the expectations of higher prices in the future," Dickinson said.
In equity markets, British Gas owner Centrica surged as it hiked its dividend and announced a £500m share buyback after full-year earnings beat forecasts.
Anglo American was also a high riser despite posting a full-year loss of $3.1bn after a large impairment related to its De Beers diamond operation as it continued restructuring plans to focus on copper and iron ore.
Lloyds Bank gained even as it said annual profit fell 20.4%, worse than expected, and set aside an extra £700m to cover potential claims against motor finance commission deals.
Pre-tax profit came in at £5.97bn, compared to £7.5bn a year earlier and consensus estimates of £6.39bn.
Russ Mould said: "The more positive response to Lloyds' full-year numbers compared with its immediate peer group is less a reflection of the results themselves and more related to the fact it had lagged behind its rivals heading into this earnings season.
"A significant increase in provisions associated with motor finance mis-selling is unlikely to have caught investors on the hop. However, the fact the government's attempt to intervene on lenders' behalf was rejected by the Supreme Court is obviously unhelpful and the increased provision meant profit came in below forecasts.
"This issue remains a lingering uncertainty for the business ahead of the latest hearing in early April but the decision to sanction a sizeable share buyback and deliver a healthy increase in the dividend suggests management are not overly concerned.
"The short- and medium-term outlook for returns is in line with previous commentary from the company and the key net interest margin was a smidge ahead of previous guidance. Lloyds will be hoping for a Goldilocks scenario where rates stay high enough to support margins and the economy remains in decent enough shape that the level of bad debts doesn't start to escalate from here."
Ithaca Energy rallied as it hailed a full-year performance at the top end of management guidance and strong fourth-quarter production.
On the downside, Imperial Brands, BP, AstraZeneca, Land Securities, GSK and easyJet all fell as they traded without entitlement to the dividend.
Opioid addiction treatment maker Indivior tanked as it said it expects full-year revenue to decline 17%.
Recruiter Hays fell as it reported a drop in first-half profit amid "challenging" market conditions, as economic and political uncertainty weighed on client and candidate confidence.
Market Movers
FTSE 100 (UKX) 8,679.44 -0.38%
FTSE 250 (MCX) 20,732.34 0.12%
techMARK (TASX) 4,730.87 -0.76%
FTSE 100 - Risers
Centrica (CNA) 145.10p 6.77%
Lloyds Banking Group (LLOY) 66.52p 5.86%
Anglo American (AAL) 2,491.50p 5.13%
JD Sports Fashion (JD.) 82.82p 2.10%
Fresnillo (FRES) 785.50p 1.95%
Glencore (GLEN) 334.00p 1.89%
Antofagasta (ANTO) 1,879.50p 1.57%
International Consolidated Airlines Group SA (CDI) (IAG) 331.30p 1.41%
Taylor Wimpey (TW.) 114.90p 1.28%
Rio Tinto (RIO) 5,099.00p 1.25%
FTSE 100 - Fallers
BP (BP.) 448.95p -3.10%
Imperial Brands (IMB) 2,709.00p -2.48%
BAE Systems (BA.) 1,313.00p -2.38%
Land Securities Group (LAND) 569.50p -2.15%
easyJet (EZJ) 486.80p -2.11%
HSBC Holdings (HSBA) 878.60p -1.88%
AstraZeneca (AZN) 11,494.00p -1.79%
British American Tobacco (BATS) 2,983.00p -1.55%
Rolls-Royce Holdings (RR.) 632.80p -1.53%
GSK (GSK) 1,421.50p -1.11%
FTSE 250 - Risers
Ithaca Energy (ITH) 146.80p 11.89%
Wood Group (John) (WG.) 25.54p 5.28%
Hochschild Mining (HOC) 195.00p 3.17%
Endeavour Mining (EDV) 1,790.00p 2.81%
Just Group (JUST) 166.20p 2.59%
Renishaw (RSW) 3,105.00p 2.31%
Safestore Holdings (SAFE) 596.00p 1.97%
Energean (ENOG) 1,046.00p 1.65%
Watches of Switzerland Group (WOSG) 531.50p 1.63%
BlackRock World Mining Trust (BRWM) 507.00p 1.50%
FTSE 250 - Fallers
Indivior (INDV) 700.00p -19.35%
Ferrexpo (FXPO) 87.00p -12.39%
Diversified Energy Company (DEC) 1,174.00p -4.48%
NCC Group (NCC) 132.40p -2.65%
Wizz Air Holdings (WIZZ) 1,509.00p -2.65%
Kainos Group (KNOS) 774.00p -2.15%
Pollen Street Group Limited (POLN) 760.00p -1.81%
QinetiQ Group (QQ.) 395.20p -1.64%
Future (FUTR) 1,013.00p -1.55%
Chemring Group (CHG) 360.00p -1.23%
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