BUSINESS LIVE: Heathrow lifted by Thanksgiving; GSK treatment approval; Hipgnosis sells assets

The FTSE 100 closed down 9.58 points at 7544.89. Among the companies with reports and trading updates today are GSK, Hipgnosis and Begbies Traynor. Read the Monday 11 December Business Live blog below.

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FTSE 100 closes down 9.58 points at 7544.89

The Footsie closes soon

Just before close, the FTSE 100 was flat at 7,554.86.

Meanwhile, the FTSE 250 was 0.17% up at 18,734.37.

RBC Brewin Dolphin: Green funds and tech firms could thrive in 2024

Investors could benefit from putting their money behind green funds and technology companies ahead of anticipated interest rate cuts next year, according to RBC Brewin Dolphin.

Central banks in the UK, US and the Eurozone are forecast to begin cutting interest rates next year after implementing multiple successive hikes over the past two years to temper inflationary pressures.

Shein holds talks over potential London IPO, according to reports

Chinese fast-fashion giant Shein has held talks with the London Stock Exchange Group about the possibility of a public listing, according to reports.

The firm’s chairman, Donald Tang, last week met executives from the LSE and other stakeholders in the UK economy during a visit to London, according to Sky News.

Two Royal Mail bosses to leave after agreement with union

(PA) – Two top executives at Royal Mail who were close to the company’s recent long-running dispute with its unions are going to leave in the New Year.

In an email to employees, the boss of parent company International Distributions Services said the delivery firm would part ways with its chief operating officer and chief people officer.

HR boss Zareena Brown has a new job lined up which starts in March, said IDS chief executive Martin Seidenberg, while operations head Grant McPherson will be replaced in January.

In his email Mr Seidenberg did not say whether Mr McPherson was moving on to another role.

“A few months ago Grant McPherson informed me that he was planning to move on from his role as chief operating officer after peak,” he wrote to staff.

“I am hugely grateful for Grant’s dedication and absolute commitment to turning around Royal Mail over the last couple of years.”

Mr McPherson will be replaced by his deputy Alistair Cochrane, who joined IDS in October from rival Whistl UK.

Train ticket sellers using ‘drip pricing’ to charge £6 fees – watchdog

Online train ticket retailers are using so-called drip pricing with booking fees of up to £6.45 per transaction, a regulator has found.

The Office of Rail and Road (ORR) said the companies must ensure their booking or finder’s fees are included within upfront prices.

SMALL CAP IDEA: Thruvision suffers US CPB budgetary challenges

Thruvision Group’s share price was thrown under the bus back in October after the small-cap, AIM-quoted security technology group posted its interim trading update.

Despite displaying decent momentum on the revenue front with 27% in top-line growth year on year, there was some disappointing news emerging from the US.

Millennials are told they will be ‘renting into retirement’

Millennials who have not yet bought a house have been told they will be likely renting into retirement.

Hamptons issued the stark warning as it released its latest data about the health of Britain’s lettings market.

WH Smith boss sees pay deal jump 78% to £2.9million as rebound continues

(PA) – WH Smith’s boss has seen his pay surge by 78% over the past year after the retailer continued its travel-boosted resurgence.

Carl Cowling, chief executive since 2019, received a total pay deal worth £2.91million for the year to August 31, according to the firm’s latest annual report.

That compares to a £1.63million pay deal a year earlier.

Around four-fifths of the larger pay deal was linked to performance-based bonuses after the company saw sales and profits jump.

Mr Cowling got £2.25million as a result – £998,000 of annual bonus and £1.25million through the retailer’s long-term bonus scheme.

The boss did not get any money through the long-term incentive scheme the previous year.

He also got £610,000 through his fixed salary, as well as £15,000 in annual benefits and £37,000 of pension.

The jump in total pay comes after WH Smith saw its profits almost double as it benefitted from more travellers at airports and railway stations.

WH Smith reported a headline pre-tax profit of £143million in the year to August 31, compared with £73million a year earlier.

Group revenues for the year rose by 28% to £1.79billion as it was supported by a 36% increase in revenues through its UK travel business.

The firm also benefited from its continued expansion, opening more travel sites under the WH Smith and InMotion brands.

Hipgnosis offloads 20,000 songs at steep discount of £18.4m

Hipgnosis Songs Fund has sold a large number of song rights at a significant discount as the embattled music fund continues to raise cash.

The investment trust told investors on Monday it has completed the sale of around 20,000 songs for $23.1million (about £18.4million), roughly 1 per cent of its total assets, reflecting a 14.2 per cent discount to its valuation at 30 September.

Google antitrust trial focused on Android app store payments to be handed off to jury to decide

(AP) – A federal court jury is poised begin its deliberations in an antitrust trial focused on whether Google’s efforts to profit from its app store for Android smartphones have been illegally gouging consumers and stifling innovation.

Before the nine-person jury in San Francisco starts weighing the evidence Monday, the lawyers on the opposing sides of the trial will present their closing arguments in a three-year-old case filed by Epic Games, the maker of the popular Fortnite video game.

Epic alleged that Google has been exploiting its wealth and control of the Android software that powers most of the world’s smartphones to protect a lucrative payment system within its Play Store for distributing Android apps.

Just as Apple does for its iPhone app store, Google collects a 15-30% commission from digital transactions completed within apps – a setup that generates billions of dollars annually in profit.

Tax take levels in the UK soar to a record high

Britain’s tax take has leapt to a record high, marking the latest evidence of the Treasury’s squeeze on hard-working families and businesses.

Figures from the Organisation for Economic Cooperation and Development (OECD) show the level of tax rose to 35.3 per cent of Gross Domestic Product in 2022, up from 34.4 in 2021.

Heathrow boss calls on UK to scale-up eco plane fuel production

The boss of Heathrow has called for collaborative effort between government and industry to ‘scale up’ sustainable aviation fuel production, after last month’s landmark flight.

Begbies Traynor boosted by jump in company insolvencies

Begbies Traynor expects annual results to align with forecasts after increased business failures boosted demand for its services.

The corporate restructuring specialist saw turnover expand by 13 per cent to £65.9million in the six months ending October, while adjusted earnings before nasties grew by £0.9million to £12.8million.

Centrica shares top FTSE 350 fallers

Top 15 falling FTSE 350 firms 11122023

Plus500 shares top FTSE 350 charts

Top 15 rising FTSE 350 firms 11122023

Tech boss is worried about humans losing control of AI

The boss of UK tech giant Arm Holdings has revealed that he is worried about humans losing control of artificial intelligence.

Rene Haas, chief executive of Cambridge-based chip designer Arm, was quoted telling Bloomberg ‘the thing I worry about most is humans losing capability’ over the machines.

FTSE 100 starts the week lower ahead of key economic data

Victoria Scholar, head of investment at Interactive Investor:

‘After closing at a seven-week high on Friday, the FTSE 100 is trading slightly lower to start the week. Rolls-Royce is trading at the top of the index after Citigroup raised its target price on the stock from 294p to 431p while Endeavour Mining is languishing at the bottom.

‘Key UK economic developments are due this week with unemployment data on Tuesday, GDP figures on Wednesday and the Bank of England’s rate decision on Thursday. In the US, all eyes are on the Fed’s rate decision on Wednesday and the latest US inflation figures on Tuesday. Goldman Sachs now expects two rate cuts from the Fed next year beginning in the third quarter.

‘Overnight consumer prices in China fell by 0.5% in November, down from a drop of 0.2% in October and below expectations. It was the fastest decline since November 2020 with food prices dropping the most in two years.’

Increase in UK drinks exports – report

(PA) – The value of UK drinks exports increased by more than £1billion in the past year, new research suggests.

The total jumped from £8.3billion in 2021/22 to £9.4 billion in the 12 months to July this year, said business advisers Hazlewoods.

Spirits are playing a key role in rising drinks exports, with continued demand for whisky from traditional markets in EU countries, including France, Germany, Spain and Poland, as well as India and Singapore, the report said.

Sales of other drinks, such as beer, to the EU have suffered because of Brexit-related red tape, the report added.

Rebecca Copping from Hazlewoods said: “British heritage brands have successfully placed themselves as a luxury in the international drinks market.

“A large chunk of this success is due to young, wealthy consumers purchasing quality drinks brands that signify status and success.

“Despite volatility in the economy and high interest rates around much of the globe, consumer spend on luxury goods has held up well, although sales growth of luxury goods is slowing.

“This post-Covid boom in luxury goods sales certainly had a hand in increasing UK drinks exports.

“Now the industry is focused on long-term growth, reaching bigger, untapped markets. The UK Government can support that by delivering trade agreements that lower barriers to expansion.”

Home loans down 23% as rate rises bite

Mortgage lending is expected to have plunged by a quarter this year while borrower in arrears top 100,000 – with worse ahead in 2024, according to data.

Lending for house buys has fallen by 23 per cent to £130billion in 2023 – the lowest in seven years as high interest rates and the cost of living take their toll.

And the figure is expected to drop to £120billion next year before picking up in 2025, according to a report from UK Finance, which represents banks and building societies.

Market open: FTSE 100 down 0.1%; FTSE 250 flat

London-listed stocks are down marginally in early trading, with mining stocks among top decliners, while focus remains on a plethora of central bank meetings due this week.

Industrial metal miners have lost 1.2 per cent as prices of most base metals slip on a firmer dollar, while iron ore prices lose ground on disappointing China consumer prices data.

Anglo American is down 1.3 per cent, leading declines on the FTSE 100 after at least four brokerages reduced their price targets on the stock.

Lower gold prices also push precious metal miners down 1.5 per cent.

All eyes are now on major central banks, with the Bank of England, US Federal Reserve and the European Central Bank all scheduled to announce their monetary policy decisions during the week.

All three are expected to hold rates at current levels.

FTSE 100 short of Monday motivation at the open

Susannah Streeter, head of money and markets at Hargreaves Lansdown:

‘The FTSE 100 is short of Monday motivation, opening lower in early trade, despite indications of a more resilient outlook for the UK, as concerns about China’s economy linger.

‘Energy giants have climbed on a recovery in oil prices, but mining giants are on the backfoot amid concerns about demand. On Wall Street investors have been seeing signs of robustness in the US as a good news story, indicating a softer landing for the US, even though possibilities of early interest rate cuts have retreated a little.

‘With the key monthly jobs snapshot coming in stronger than expected but inflation still heading in the right direction, the Goldilocks scenario being yearned for is potentially still on the cards. There still could be some ogres appearing on the horizon as the effect of rapid tightening of rates continues to feed through, but right now there is optimism in the air.’

RUTH SUNDERLAND: Work is no longer in vogue

Watching Madonna in concert at the O2 last week made me think about economics in the eighties and not just the music. Yes, I probably should get out more, but bear with me.

Madonna has never been the greatest singer, but she wholeheartedly embraced the eighties culture of aspiration.

Heathrow lifted by Thanksgiving

Heathrow traffic was lifted by Thanksgiving and Diwali trade in November, with Britain’s busiest airport urging collaboration between Government and industry to drive the production of sustainable aviation fuel after it took part in the first transatlantic flight using the technology.

November traffic was up 10.2 per cent to around 6.1 million, bringing 2023 passenger numbers to 72.5 million, up 30.2 per cent year-on-year.

Heathrow CEO Thomas Woldbye said:

‘For so many, holidays and cultural festivities are all about spending quality time with friends and family. Last month saw passengers travelling to celebrate Thanksgiving and Diwali with their loved ones, and we are making final preparations for the Christmas getaway.

‘We need to protect these benefits of aviation in a world without carbon, which the history making 100% SAF transatlantic flight proved is possible.

‘Now we need collaboration between Industry and Government who both have critical deliveries, to scale up SAF production to make 100% SAF flights an everyday reality.’

Saudi Arabia could take control of Heathrow

Saudi Arabia could become the majority owner of Heathrow Airport according to a report suggesting that fellow investors in the hub are ready to sell up.

The speculation comes after the country’s sovereign wealth fund together with French private equity firm Ardian recently agreed a deal to buy a 25 per cent stake in the airport for £2.4billion from Ferrovial.


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