Weekly review
By Josh White
Date: Friday 28 Mar 2025
(Sharecast News) - The FTSE 100 ended the week up 12.06 points, or 0.14%, closing at 8,658.85 on Friday.
Equity view
Energy group SSE has promoted its chief commercial officer Martin Pibworth to the CEO position, replacing current boss Alistair Phillips-Davies who will formally leave the company this summer. Pibworth first joined SSE as an energy trader in 1998 before stepping up to the executive committee in 2012 and the board in 2017. He is said to have a deep understanding of energy markets and large capital projects, and "has been at the heart of the design and delivery of SSE's highly successful corporate strategy", SSE said.
A significant improvement in margins at Good Energy was able to offset a big slump in revenues, with the renewable electricity and energy services provider reporting a double-digit increase in profits for 2024. The company, which in January agreed to a £99m takeover from Esyasoft, said on Friday that pre-tax profits totalled £6.6m last year, up 16% on 2023. Revenues, which are directly linked to externally driven commodity costs, fell to £180.1m from £254.7m. Both revenues and the cost of sales reduced, mirroring reductions in wholesale costs seen since the 2022/2023 peaks, the company said.
WH Smith has sold its UK high street business to Modella Capital for an enterprise value of £76m on a cash and debt-free basis in a deal that will see the chain rebranded as TGJones. The retailer, which will now focus on its profitable travel outlets, said it expected net cash proceeds of around £25m when adjusted for transaction and separation costs. It added that the deal did not include the funkypigeon.com personalised online greeting card business where strategic options were now being considered, including a possible sale.
Diversified Energy announced on Friday that it has raised $300m through the successful placement of new senior secured notes maturing in April 2029. The FTSE 250 company said the notes carry a fixed annual coupon of 9.75%, payable semi-annually in arrears. It said the proceeds would be used to repay existing debt and support general corporate purposes. Diversified noted that the new debt issue was leverage-neutral, and would enhance cash flow, providing greater flexibility to invest in high-return opportunities.
Drax said it has agreed a 20-year joint venture agreement with Power Minerals to build a facility to process pulverised fuel ash into material which can be sold to the construction industry and used in the production of cement with a lower carbon footprint. The project could generate incremental adjusted core earnings of £5m a year for Drax post 2027 through to 2046, the company said on Thursday. The new facility will be located next to Drax's power station. Under the agreement Power Minerals will build and own the factory, with Drax selling the product as well as providing power and water. It is expected to start operations by the end of 2026, with an expected annual production of 400,000 tonnes once operating at full capacity.
Sage Group said chief financial officer Jonathan Howell would step down at the end of the year to focus on non-executive work and be replaced by Jacqui Cartin, currently financial controller at EVP Group. Howell has been with the accounting software company for 12 years, with five of those as a non-executive director, and then seven years as CFO.
Transport operator Mobico has appointed Phil White as chair with effect from 1 May 2025, replacing Helen Weir. White was previously CEO of National Express Group - Mobico's previous identity - between 1997 and 2006, during which he expanded the business internationally and oversaw the acquisition of bus company Alsa.
Retail giant Next boosted its sales outlook on Thursday following a strong start to the year, but warned that consumer confidence was set to deteriorate as the year progressed. The fashion and home retailer said full-price sales in the first eight weeks of the year had been ahead of expectations. As a result, it has hiked its first-half forecast to 6.5%, having previously guided for sales growth of 3.5%.
Defence firm Babcock International said on Wednesday that it has been awarded a five-year contract extension with the Ministry of Defence worth around £1bn. The extension to the existing DSG Service Provision and Transformation Contract (SPTC) will deliver a comprehensive range of support capabilities for the Army in the UK with global reach. Babcock said that through the course of the extension, it will deliver improved readiness, regeneration and asset management services "underpinned by extensive engineering and supply chain expertise".
UK convenience food maker Greencore has lifted its bid for rival Bakkavor Group, according to a media report on Tuesday. Bakkavor was considering the enhanced proposal, newswire Bloomberg reported, citing unnamed sources. Two takeover bids from Greencore were rejected by Bakkavor this month, with the latest cash-and-stock offer valued at 189p a share valuing the target at £1.14bn. Greencore shareholders would own approximately 59.8% and Bakkavor shareholders would own approximately 40.2% of the enlarged group.
Ithaca Energy posted a solid operational and financial performance for 2024 on Wednesday, with results at the top end of guidance, as the company benefited from the integration of Eni's UK upstream assets following the completion of the business combination in October. The FTSE 250 firm said pro forma figures highlighted the scale of the enlarged group, which was now the UK Continental Shelf's largest resource holder and second-largest independent producer. Full-year production averaged 80,177 barrels of oil equivalent per day, up from 70,239 equivalent daily barrels in 2023.
Evoke shares were sliding on Wednesday after it swung to an adjusted loss after tax for 2024, despite second-half adjusted EBITDA surging 71% versus the first half, helping it exceed the top end of its earnings guidance. The London-listed gambling operator, which counts William Hill among its brands and was formerly known as 888 Holdings, said the second-half improvement followed a period of extensive transformation, with management reaffirming expectations for further growth and margin expansion in 2025. Full-year adjusted EBITDA rose 4% to £312.5m on revenue of £1.75bn, up 3% year-on-year, marking the company's first return to growth in three years.
Housebuilder Bellway hailed a "strong" first half on Tuesday as it posted a 12% increase in underlying pre-tax profit, citing lower mortgage interest rates and improved consumer confidence. In the six months to the end of January 2025, underlying pre-tax profit rose to £150.2m from £134.2m in the same period a year earlier. Revenue was up 12.3% to £1.4bn and housing completions increased 11.9% to 4,577. The average selling price was £310,581, up from £309,278 a year earlier and the private reservation rate per outlet per week picked up 18.6% to 0.51.
Online electricals retailer AO World hailed a "strong" performance on Tuesday as it said that full-year profit was set to be around the top end of its previously upgraded guidance range. In a pre-close update for the year to the end of March, the company said adjusted pre-tax profit has grown faster than sales, by around 30%, and is expected to be around the top end of its previous guidance range of £39m to £44m. B2C retail revenues are expected to have risen by around 12% year-on-year, with estimated like-for-like group revenues up around 7% to £1.1bn. This reflects reductions in B2B and mobile as the company focuses on profitable growth as set out in the half-year results in November.
Morgan Sindall surged on Tuesday as it said 2025 profits were set to be "slightly" ahead of market consensus following a stronger-than-expected performance from the Fit Out division. Consensus expectations are for pre-tax profit of £178m. The construction and regeneration company said that since its full-year results on 26 February, trading momentum in the Fit Out division has accelerated and is now expected to exceed both the group's previous expectations and the top-end of its revised medium term targets of £60m to £85m.
Smiths Group reported a strong set of half-year results on Tuesday, underpinned by continued execution of its value creation strategy and supported by organic growth and margin expansion, as it also announced the acquisition of the US-based Duc-Pac. The FTSE 100 industrial technology group recorded organic revenue growth of 9.1% for the six months ended 31 January, with headline operating profit rising 12.6% organically, leading to a 50 basis point expansion in organic operating margin to 16.7%. Headline earnings per share increased 14%, and the interim dividend was raised by 5% to 14.23p per share.
Fintech group Plus500 has bought Indian financial services company Mehta Equities for $20m, the company said on Monday. Mehta provides broking services including futures, options and cash equities trading products. "India represents the largest retail trading market globally with over 150bn contracts traded in 2024, equating to over 75% of the global transaction volume," the company said in a statement.
Great Portland Estates said it has bought the freehold interest in the One Chapel Place office building in London's West End. The purchase price is based on a property valuation of £56m, the company said on Monday, adding that the 34,230 sq ft building is fully let at an annual rent of £2.5m a year, with the office leases due to expire in mid-2028.
GSK said on Monday that the European Medicines Agency has accepted its application to expand the use of 'Nucala', or mepolizumab, to include patients with chronic obstructive pulmonary disease (COPD) who have an eosinophilic phenotype. The FTSE 100 pharmaceuticals giant said the submission was backed by results from the phase three 'MATINEE' trial, which showed a statistically significant and clinically meaningful reduction in the annualised rate of moderate to severe exacerbations when Nucala was added to inhaled maintenance therapy, compared with placebo. It said the trial enrolled 804 patients and assessed mepolizumab over a period of up to two years.
Abingdon Health reported a 28.4% increase in revenue to £3.1m for the six months ended 31 December on Monday, up from £2.4m a year earlier, supported by growth across its regulatory and lateral flow products divisions. The AIM-traded company said it remained confident in meeting full-year revenue expectations of £8.6m. Revenue from regulatory services rose to £1.3m, up from £0.3m, including a £1.0m contribution from CS Lifesciences, which Abingdon acquired in August.
Economic news
Thames Water's chief financial officer Alastair Cochran will leave the company at the end of March, it was announced on Friday, marking a significant leadership change as the debt-laden utility pushed ahead with efforts to stabilise its finances.Cochran, who joined in 2021 and also served briefly as joint chief executive, would step down from both the executive team and the board. His departure came at a critical moment for the UK's largest water and sewage company, which was attempting to recapitalise amid nearly £20bn in debt and mounting regulatory scrutiny over environmental performance.
The UK economy grew more strongly than initially thought last year, official data showed on Friday. The Office for National Statistics revised its estimate for real annual GDP in 2024 to 1.1% from 0.9%. Leading the annual improvement were upward revisions of 0.1 percentage points in the first and second quarters of 2024. Growth in the second half was largely left unchanged, however.
UK retail sales jumped in February, official data showed on Friday, comfortably beating expectations. According to the Office for National Statistics, retail sales volumes rose by 1% last month. That was down on January's revised 1.4% increase, but well ahead of consensus for a 0.3% fall. Sales volumes were also at their highest since July 2022. Driving the growth were non-food sales, which grew "strongly", the ONS said, and helped offset softer supermarket volumes.
UK car production fell for a 12th consecutive month in February, according to the Society for Motor Manufacturers and Traders, which also said Rachel Reeves' Spring statement did nothing to alleviate the pressure on manufacturers. A total of 82,178 new cars and commercial vehicles rolled off the production line last month, an 11.6% year-on-year drop, with model changeovers and plant restructuring being cited as key reasons for the decline.
The chancellor confirmed cuts to welfare spending on Wednesday while pledging to turn the UK into a "defence industrial superpower", in a spring statement designed to ensure the government's fiscal targets would still be met. Rachel Reeves said her package of measures - designed to cut spending in the short term while boosting longer-term investment and growth - would see the budget move from a deficit of £36.1bn in 2025/26 to a £6.0bn surplus in 2027/28, rising to £9.9bn by 2030. It would also restore "in full" the headroom against her "non-negotiable" fiscal rules.
UK inflation eased a little more than expected in February as clothing prices fell, according to figures released on Wednesday by the Office for National Statistics. Consumer price inflation eased to 2.8% from 3% in January. Economists were expecting a smaller decline to 2.9%. ONS chief economist Grant Fitzner said: "Clothing prices, particularly for women's clothing, was the biggest driver of this month's fall.
Output growth in the UK private sector hit a six-month high in March, thanks to a rebound in the services sector, according to a survey released on Monday. The S&P Global flash UK PMI composite output index rose to 52.0 from 50.5 in February, coming in above the 50.0 mark that separates contraction from expansion for the seventeenth month in a row. This marked the highest reading since September 2024. The survey revealed the fastest upturn in the service economy since August 2024, with growth in the sector boosted by renewed improvements in both domestic and overseas sales.
National Grid's chief executive said over the weekend Heathrow Airport had sufficient electrical capacity to remain operational during Friday's fire-related power outage, intensifying questions over the airport's decision to close for nearly 18 hours. The disruption grounded around 1,300 flights, affecting more than 200,000 passengers and costing the airline industry an estimated £60m to £70m.
International events
The annual rate of US core personal consumption expenditures (PCE) inflation unexpectedly rose in February, according to data from the Bureau of Economic Analysis on Friday, while personal incomes increased more than forecast. The year-on-year change in the core PCE index, which excludes volatile food and energy items, increased to 2.8% last month, up from 2.7% in January and ahead of economists' predictions for no change. The monthly change in the core PCE index was 0.4%, picking up from the 0.3% growth registered the month before and ahead of the 0.3% expected by the market.
Economic sentiment and consumer confidence across Europe weakened unexpectedly in March, official research showed on Friday. Publishing its latest business and consumer survey results, the European Commission said the economic sentiment indicator fell 1.1 points to 95.2 in March, the weakest print since December. Analysts had been expecting a small rise, to 97.0. The ESI also fell across the wider European Union, losing 0.9 points to 96.0.
The jobless rate in Germany unexpectedly rose in March, reaching its highest level in four and a half years, according to data out on Friday from the Federal Employment Agency. The seasonally adjusted number of unemployed people across the country increased by 26,000 this month to 2.922m, the highest since June 2020. This compares to the 5,000 gain registered in February and well ahead of the 10,000 increase expected by economists.
Gold prices hit fresh highs on Friday, as the latest round of trade tariffs imposed by Donald Trump reignited fears of a global trade war. Spot gold reached a record high of $3,086.21 earlier in the session, before retreating slightly. However, it remained 0.9% higher at $3,083.33 per ounce. It is now the fourth consecutive weekly gain, after the precious metal hit $3,000 for the first time ever earlier in March. Comex gold futures were up 0.62% at $3,080.
The Bank of Japan has said that it is keeping a close eye on the impact of protectionist measures imposed by Donald Trump, with downside risks stemming from trade tariffs having increased. The comments came at the central bank's latest policy meeting on 18-19 March - minutes of which were released on Friday - when policymakers held interest rates steady in the face of rising inflation. "For the time being, it is appropriate for the bank to pay close attention to the policies of the new US administration and their impact on the global economy and global financial and capital markets," the BoJ said.
Consumer confidence in Germany has stabilised at a low level as sentiment was supported by the recent elections, though rising preferences to put money away still indicate a cautious attitude. In the first survey since Germany's parliamentary elections, the forward-looking consumer climate index, published by GfK and the Nuremberg Institute for Market Decisions (NIM), inched higher to -24.5 for April, up from -24.6 in March. This missed the consensus forecast of -23.0.
The growth in the number of home sales signed in the US continued to be subdued last month. According to the National Association of Realtors, so-called pending home sales increased by 2.0% month-on-month. That was better than the 1.5% increase anticipated by economists. Commenting on the latest figures, NAR chief economist, Lawrence Yun, said: Despite the modest monthly increase, contract signings remain well below normal historical levels.
US President Donald Trump escalated his global trade war overnight, announcing plans to impose swingeing 25% tariffs on all vehicle imports and parts only days before levies on other goods take effect. The news hit shares in automakers around the world. Japanese Prime Minister Shigeru Ishiba said his government would put "all options on the table" in response to the tariffs. The country is the world's second largest exporter of cars. Mexico tops the list, with South Korea, Canada and Germany also major players. European markets were bracing for heavy falls as investors reacted to the latest threats.
Americans lined up for unemployment benefits at only a slightly decelerated pace in the week ended 22 March, according to the Department of Labor. Initial jobless claims decreased by 1,000 to 224,000 last week, slightly below expectations for an unchanged reading of 225,000 but still at historically low levels. Continuing claims fell by 25,000, while the four-week moving average also came to 224,000, down 4,750 from the previous week's revised average and pointing to a robust labour market despite a prolonged period of restrictive monetary policy and some bleak macro data in Q1.
Norway's central bank kept interest rates at a 17-year high on Thursday, as widely expected, following an uptick in inflation. Norges Bank had previously flagged that the first cut in the cost of borrowing for five years would likely come in March. That position was seemingly confirmed by governor Ida Wolden Bache in a speech last month. However, the rate-setting monetary policy and financial stability committee instead opted to leave the cost of borrowing at 4.5%, following an unexpectedly sharp rise in inflation.
German business sentiment improved in March, according to a survey released on Tuesday by the Ifo Institute. The business climate index ticked up to 86.7 from 85.3 in February. The current situation index rose to 85.7 in March from 85.0 the month before, while the expectations index increased to 87.7 from 85.6. The manufacturing index improved to -16.6 in March from -21.9 in February, while the service sector gauge rose to -1.1 from -4.3.
Business activity in the US picked up in March, but not in manufacturing, according to the preliminary results of two closely followed surveys. And businesses' outlook for the year ahead soured. S&P Global's Composite Output Index strengthened from a reading of 51.6 for February to 53.5 in March - a three-month high. The flash US services PMI Business Activity Index jumped from 51.0 to 54.3, but the manufacturing PMI fell from 52.7 to 49.8.
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