Weekly review
By Josh White
Date: Friday 11 Apr 2025
(Sharecast News) - The FTSE 100 ended the week down 90.8 points, or 1.13%, closing at 7,964.18 on Friday.
Equity view
Convenience food group Greencore has been given an extension on the deadline to make a firm offer for rival Bakkavor until May 9 or walk away. The two companies on April 2 struck a £1.2bn deal after two previous approaches were rejected. However, Bakkavor on Friday said talks were still ongoing and requested the original April 11 deadline be pushed back to complete due diligence work.
Energy giant BP on Friday said it expected to report lower first-quarter upstream production than in the previous three months. In a trading update, the company said it saw slightly higher volumes in oil production and operations, but expected lower output in gas and low-carbon energy. Gas marketing and trading is expected to be "weak," it added. Oil production and operations earnings were expected to be broadly flat from the previous quarter, partly due to price lags in the Gulf of Mexico and the UAE. In the gas and low-carbon energy segment, realisations were also forecast to be flat.
Central London property company Helical has reported "significant activity" across its portfolio over the second half of its financial year, as it announced the £333m forward sale of an office development near Blackfriars. In an update on trading for the six months to 31 March, chief executive Matthew Bonning-Snook said: "I am pleased to report on a period of significant activity across the portfolio, which has seen us progress schemes through funding, unlock value via planning milestones and achieve a number of sales." Since the year-end, Helical and a vehicle managed by Orion Capital Managers have exchanged contracts for the sale of the 195,000 sq ft office redevelopment at 100 New Bridge Street, EC4 to an undisclosed S&P 500-listed business.
Diageo announced the launch and pricing of a $1.5bn two-tranche bond offering in the US market on Friday, issuing fixed-rate notes with maturities in 2030 and 2035. The FTSE 100 distilling giant said the offering, launched on 10 April, consisted of $750m in 5.125% notes due 2030 and $750m in 5.625% notes due 2035. It said the bonds were issued by Diageo Investment Corporation, and were fully and unconditionally guaranteed by Diageo plc. The proceeds would be used for general corporate purposes, with settlement of the SEC-registered offering expected on 15 April.
LondonMetric Property said it had bought a long-let Marks & Spencer logistics warehouse for £74m, reflecting a net interest yield of 5.65%. The 390,000 sq ft regional logistics warehouse is pre-let to M&S on a 20-year lease with five yearly upward only rent reviews linked to CPI, the company said on Thursday.
Great Portland Estates has hailed a strong end to its financial year, with leases around 10% above estimates in the fourth quarter, as the London-based real estate group saw solid demand for its fully managed properties. Some 32 new leases and renewals were signed during the three months to 31 March in what GPE called "one of our busiest quarters on record". These new deals generated annual rent of £18.2m with market lettings on average 9.9% ahead of the estimated rental value (ERV) at the start of the financial year. For the full year, 74 new leases and renewals were signed, generating £37.7m in annual rent at 10.6% above ERV, 41 of which were fully managed.
Tesco warned on Thursday that profits in the current year could be squeezed, as competition from rivals ramps up. The UK's biggest grocer said group sales in the year to February 2025, excluding VAT and fuel, had jumped 3.5% to £63.64bn. Group like-for-like sales were up 3.1%, including a 4% jump in the UK. Tesco's wholesale business Booker saw sales ease 1.8% on the same basis, dragged lower by the ongoing decline in the tobacco market.
Capita said on Thursday that it has secured a contract extension with Southern Water valued at £92.4m over five years. The extension, which was secured by the contact centre subdivision within Capita Experience, starts from July 2026. The value comprises £56.3m for the initial three years and £36.1m for the optional two-year extension. Capita will continue to provide a comprehensive range of services to Southern Water, including front-office customer contact (voice, chat, email, social media, and complaint handling), back-office transaction processing, and early collections.
Recruiter PageGroup has said it is not providing financial targets for 2025 as a result of the economic uncertainty caused by an escalating trade war, with profits in the first quarter falling by almost a tenth. The company said that its slower end to the fourth quarter continued into the new financial year, with the full-year outlook now uncertain due to an "increasingly unpredictable economic environment". Gross profits were down 9.2% year-on-year at £194.2m in the three months to 31 March, with the Americas division its only geography to record growth over last year, rising 3.3% to £37m.
Shares in Audioboom fell sharply on Wednesday despite the podcast company predicting that it will "at least" meet financial targets this year after a solid first quarter with earnings rising strongly. Adjusted EBITDA in the three months to 31 March totalled $0.7m, a tenfold increase over the year before. Revenues rose by just 1% to $17.3m, which the company said reflects its focus on higher-margin sales.
Travel-to-publishing group Saga posted a jump in annual earnings on Wednesday, but warned the coming year would be "one of transition", leading to weaker profits. The group, a specialist in products and services for the over 50s, said underlying revenues improved 5% in the year to 31 January, to £768.2m. Revenues rose 4%, at £588.3m, while underlying pre-tax profits from continuing operations strengthened 8% at £37.2m. Total underlying profits jumped 25% to £47.8m, ahead of guidance.
DCC announced a series of senior leadership changes on Wednesday, aimed at aligning its management structure with its strategic focus on the energy sector, as outlined in its November update. The FTSE 100 company said Kevin Lucey, currently chief financial officer and an executive director since 2020, would assume the newly-created role of chief operating officer following the annual general meeting on 10 July. In the position, Lucey would continue to work closely with chief executive Donal Murphy, taking responsibility for the performance of DCC's energy operations under the 'Cleaner Energy in Your Power' strategy.
JTC posted a jump in full-year sales and profits on Tuesday, as it reiterated plans to double the size of the business by 2027. The provider of fund administration services said revenues in the year to 31 December rose 18.6% to £305.4m, while underlying earnings before interest and amortisation was 18.4% stronger at £101.7m. Pre-tax profits rose 17.8% to £71.6m on the same basis. The performance was boosted by a near 16% jump in new business wins to £35.7m, as well as a raft of deals. A total of six acquisitions were announced or completed during the year.
Unite Group reported a modest rise in quarterly property valuations on Tuesday, supported by rental growth and continued strong demand for student accommodation, as it updated the market on trading and fund performance for the first quarter of 2025. The FTSE 100 student accommodation provider said 75% of its beds for the 2025-2026 academic year had now been sold, down from 84% at the same stage last year. It attributed the change to a later leasing cycle, in line with expectations following a return to more typical seasonal trends.
Hilton Foods said it was on track to deliver 2025 earnings in line with guidance after a sharp jump in profits last year, driven by its core retail meat business and despite the uncertain macroeconomic backdrop caused by US tariffs. The company posted a 25% rise in pre-tax earnings to £61m in the year to December and hiked its dividend 7.8% to 34.5p. On an adjusted basis profits rose 15.3% to £76.1m.
Recruitment firm Staffline said on Tuesday that it had returned to pre-tax profit in FY24 as revenues neared £1.0bn. Staffline said pre-tax profits came to £5.0m during the period, compared to FY23's pre-tax loss of £2.1m, while gross profits were up 10.3% at £70.8m. Revenues rose 14% to £992.9m due to market share gains and the increase in the National Living Wage, while gross profit margins slipped just 0.3 percentage points to 7.1% and underlying earnings surged 26% to £12.6m.
LondonMetric Property has sold £40.4m of mature and non-core urban warehousing across the UK, reflecting a net interest yield of 4.3%. The five warehouses have been sold in separate transactions to owner occupiers and long only funds, the company said on Monday. LondonMetric said the sales were in line with September 30 book values and have delivered a profit on cost of 30% and an ungeared internal rate of return of 10%.
New York-based investment firm Stonepeak is investing $5.7bn to take a 40% stake in Woodside Energy's proposed Louisiana LNG gas production and export terminal. The project, which is positioned in the Gulf Coast LNG corridor, has a total permitted capacity of 27.6m tonnes per annum. The deal significantly reduces Woodside's capital expenditure profile - with Stonepeak contributing 75% of project capex over 2025 and 2026 - as the project readies for its final investment decision for the foundation development.
Ferrexpo reported its strongest quarterly production since the start of Russia's full-scale invasion of Ukraine in 2022 on Monday, delivering 2.1 million tonnes of total output in the first quarter of 2025, although its shares were sliding as it warned of an increasingly difficult operating environment. The company said the result included 1.3 million tonnes of iron ore pellets and 0.8 million tonnes of 67% iron concentrate, with the company citing a sharp rise in demand for high-grade concentrate from customers in Asia. It said iti miner operated two of its four pelletising lines during the quarter, alongside commercial concentrate production.
Softcat said on Monday that it has bought Oakland, a specialist provider of data and AI consultancy services, for an initial payment of £8m. There are further contingent payments over the next three years depending on performance. Oakland's specialist consultancy services range from data strategy and governance, through to architecture and engineering, analytics and AI, Softcat said.
Economic news
The UK economy grew more than expected in February, according to figures released on Friday by the Office for National Statistics. The economy expanded by 0.5% on the month, comfortably beating consensus expectations for a 0.1% increase. This followed no growth in January, revised up from a 0.1% decline. Services sector growth was 0.3% in February following a 0.1% expansion the month before, and was the largest contributor to the monthly expansion in GDP.
UK retail footfall tumbled in March, industry data showed on Friday, after the late timing of Easter weighed heavily on the high street. Last year, Easter - a key shopping holiday for many retailers, especially grocers - fell in March. This year, however, it falls notably later, at the end of April. As a result, tough comparatives meant that total UK footfall was down 5.4% year-on-year in the five weeks to 5 April, sharply lower than February's 0.2% decline.
The Chancellor said on Thursday that Nikhil Rathi has been reappointed as chief executive of the Financial Conduct Authority for a second term. It said that since he joined in October 2020, the financial watchdog has undertaken reforms to strengthen the UK's position in wholesale markets, including "the biggest changes to the listing regime in over three decades". The FCA said it had worked to reduce and prevent serious harm by ensuring firms meet expected standards at authorisation while reducing the time it takes for them to get approved, bringing more criminal charges last year than ever before and by cutting investigation times.
Activity across the UK housing market slowed last month, an industry survey showed on Thursday, as price growth flattened out and new buyer demand slowed. According to the latest Residential Market Survey from the Royal Institution of Chartered Surveyors, the house price balance fell to 2 in March, from 11 in February and 20 in January. New buyer demand, meanwhile, declined from -16 a month earlier to -32, the weakest reading since September 2023.
Risks to global financial stability have increased because of the escalating trade war ignited by the US, according to the Bank of England on Wednesday. Records of the Financial Policy Committee meetings over the past week show that policymakers see the overall risk environment having deteriorated, with severe shocks expected to be more likely in an era of weakening economic growth. The FPC, which meets to identify risks to financial stability and agree policy actions to safeguard UK financial resilience, said that UK households and businesses remain resilient, with the banking system strong enough to withstand a period of stress. However, the risk of further sharp falls in market prices "remains high", the central bank said.
Berenberg said on Tuesday that the UK was "relatively well placed to weather the tariff shock". In a research note, the bank said: "The UK has not been short of policies that damage the economy over the past decade. But the US administration's assault on foreign trade will overshadow the UK's missteps. If Donald Trump's trade war and the equity market sell-off trigger a global recession, the UK would of course struggle. "However, the UK is relatively well placed to weather the tariff shock." Berenberg noted that the additional 10% rate it faces is at the bottom end of the range imposed by the US. It said that healthy consumer finances, lower energy prices and a fall in interest-rate expectations will also help.
UK house prices fell again in March as demand returned to normal after a rush to beat the stamp duty change, according to figures released on Monday by Halifax. Prices declined by 0.5% on the month following a 0.2% drop in February. On the year, house prices were 2.8% higher in March, unchanged on the previous month. The average price of a home stood at £296,699, down from £298,274 in February.
International events
China raised its tariffs on American goods again, but said that it would ignore any further increases on the part of Washington. In an announcement made ahead of the weekend, the Chinese ministry of finance said that it would raise its trade levies on US goods from 84% to 125%, matching a previous move on the part of the US. The day before, the White House had clarified that the total tariff on Chinese goods would rise to 145% and not 125% as had previously been reported.
The cost of living in the US came in under economists' forecasts for the month of March, with inflation dragged down by a slump in energy quotes. According to the Department of Labor, in seasonally adjusted terms, the Consumer Price Index dipped by 0.1% month-on-month (consensus: 0.2%). That served to push the year-on-year rate of advance in headline CPI down to 2.4%. Consensus had been that inflation would slow from 2.8% to 2.6%.
Americans lined up for unemployment benefits at an accelerated pace in the week ended 5 April, according to the Labor Department. Initial jobless claims rose by 4,000 to 223,000 last week, in line with market expectations, while continuing claims fell by 43,000 from the previous week's downwardly revised level to 1.85m, well below expectations of 1.88m. The four-week moving average, which aims to smooth out week-to-week volatility, was unchanged from the previous week's unrevised 223,000 print.
The European Union said it was pausing new tariffs against the US for 90 days, opening the door for talks with US President Donald Trump. The move followed Trump's decision last night to pause tariffs on countries who had not retaliated against his initial raft trade levies for 90 days while reducing them to 10%. "We took note of the announcement by President Trump. We want to give negotiations a chance," said European Commission Ursula von der Leyen.
The White House hit pause on its 'reciprocal tariffs' for all countries - save China - setting off a furious rally on Wall Street. On Thursday afternoon, the US President, Donald Trump, said that such tariffs would be postponed for 90 days, while negotiations took place. However, a 10% base tariff, which had already kicked into effect, was kept in place.
US mortgage applications surged 20% in the week ended 4 April, according to the Mortgage Bankers Association of America, more than erasing the three consecutive weekly declines preceding it. Applications to purchase a home were up 9%, in line with a nine basis point drop in benchmark mortgage rates to 6.61%, while applications to refinance a mortgage shot up 35% to their highest level since October.
China on Wednesday announced new tariffs of 84% on the US in the latest trade war tit-for-tat retaliation between the world's two biggest economies. The Chinese ministry of finance said the tariffs on US goods would start from Thursday, up from the 34% previously announced. US President Donald Trump raised import taxes on Chinese imports to 104% on the day that his policy of levies on all of America's trading partners took hold.
Beijing is discussing ways to shore up the economy, it was reported on Wednesday, after Donald Trump's historic 104% tariff came into effect. According to Reuters, Chinese leaders will meet on Wednesday to discuss ways to boost the domestic economy and stabilise capital markets in light of the levy. Those due to attend include cabinet ministers as well as representatives from various government and regulatory bodies, Reuters said, citing unnamed people familiar with the matter.
Donald Trump's sweeping tariff regime came into force on Wednesday, including a swingeing 104% on China, unnerving markets and pushing the world to the brink of an all-out trade war. Dozens of countries, including a number of traditional trading partners, have had so-called reciprocal tariffs imposed on them by Washington, the highest in decades. China's record rate was announced after Beijing refused to rule out retaliatory levies on US products.
The sell-off in safe-haven US Treasuries extended on Wednesday, as global markets reacted to Donald Trump's tariff regime coming into effect. Despite being a benchmark safe-haven asset, the 10-year US Treasury yield surpassed 4.5% at one point on Wednesday, before settling back to 4.37%. Earlier in the week, the yield was less than 3.9%. The 30-year yield was similarly volatile, and briefly broke past 5%. Analysts said the highly unusual swings suggested that investors were losing confidence in US sovereign debt, as well as shifting into cash.
Oil prices could tumble to less than $40 a barrel, Goldman Sachs warned on Tuesday, on the back of a slowing global economy and output hikes. Having topped $82 a barrel in mid-January, benchmark Brent crude has since plunged and is now trading at $64.45. As well as mounting fears of a global economic slowdown, on the back of Donald Trump's sweeping tariff regime and subsequent market chaos, Opec and its allies last week agreed to boost supply by more than expected next month.
Optimism levels among small businesses in the United States dropped to a five-month low in March, as Washington's new trade policies clouded the sales outlook for firms. The small business optimism index from the National Federation of Independent Business (NFIB) fell by 3.3 points to 97.4 last month. This was below the 51-year average of 98 and the lowest print since October. A net 21% of business owners said they expected better business conditions, down from 37% in February, marking the largest monthly decline since December 2020.
China said it would "fight to the end" after Washington threatened an additional 50% tariff if Beijing went ahead with retaliatory measures of its own against American imports in the latest tit-for-tat escalation of the trade dispute between the world's two largest economies. US President Donald Trump made the threat late on Monday, a move described as "a mistake on top of a mistake, which once again exposes the US's blackmailing nature", Agence France-Presse quoted a Chinese Commerce Ministry spokesperson as saying on Tuesday. "China will never accept this. If the US insists on going its own way, China will fight it to the end. If the US escalates its tariff measures, China will resolutely take countermeasures to safeguard its own rights and interests."
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