The FTSE 100 on Tuesday closed down 0.5% amid fears that the
inflationary impact of U.K. economic policy could push the Bank of
England into an emergency rate hike, said Joshua Mahony, IG's
senior market analyst. "With Liz Truss and Kwasi Kwarteng under
pressure less than a month into their appointment, traders will
hope that this provides a stark warning over the need to be
fiscally responsible despite the desire spend their way out of this
crisis," Mr. Mahony added. The index's top fallers were Rightmove
PLC, down 8.9%, SSE PLC, which fell 7.3%, and Taylor Wimpey PLC,
down 7.2%.
Companies News:
SSE PLC Sees 1H Adjusted Earnings Per Share Rising; Backs
Guidance
SSE PLC said Tuesday that it expects higher adjusted earnings
per share for the first half of the fiscal year, and backed its
full-year guidance.
---
United Utilities Sees Lower 1H Revenue Amid Inflation, Higher
Power Prices
United Utilities Group PLC said Tuesday that revenue for both
the first half and the full fiscal year ending March 31 are
expected to be lower on year amid the inflationary environment and
higher power prices.
---
UK Regulator to Examine Acquisition of National Grid Stake by
Consortium
The U.K. competition regulator said Tuesday that it is
considering whether the acquisition of a 60% shareholding in
National Grid PLC by Macquarie Infrastructure and Real Assets
(Europe) Ltd. and British Columbia Investment Management Corp.
could lessen competition.
---
Weir Group Backs 2022 Views, Targets Operating-Margin Growth
Weir Group PLC said Tuesday that is taking initiatives to
increase operating margins beyond 2023, and backed its guidance for
the full year.
---
Saga Swung to 1H Pretax Loss; Lowers Full-Year Profit
Guidance
Saga PLC said Tuesday that it swung to a first-half pretax loss
despite higher revenue on a one-off impairment of assets, and that
it cut full-year expectations.
---
SSP to Report Around GBP2.17Bln in Sales for FY 2022 as
Passenger Numbers Recover
SSP Group PLC said Tuesday that it expects to report sales of
around 2.17 billion pounds ($2.32 billion) for fiscal 2022 as
passenger numbers continue to recover, and that it remains
confident in the continuing resilience of its business model.
---
Biffa Agrees to GBP1.3 Bln Offer by ECP, Lower than Previously
Indicated
Biffa PLC said Tuesday that it has agreed to a 1.3 billion-pound
($1.39 billion) takeover by Bears Bidco Ltd., a new company formed
and controlled by ECP V, LLC, slightly lower than the price
indicated on June 7.
---
Card Factory Swung to 1H Pretax Profit as Customer Spending
Normalized
Card Factory PLC reported on Tuesday a swing to pretax profit in
the first half of fiscal 2023, driven by a return to normal
customer spending after the lifting of coronavirus measures.
---
Domino's Pizza Group Appoints Elias Diaz Sese as Interim CEO
Domino's Pizza Group PLC said Tuesday that it has appointed
Elias Diaz Sese as interim chief executive officer, succeeding
Dominic Paul, who is leaving to join FTSE 100-listed
hotel-and-restaurant company Whitbread PLC.
---
Close Brothers FY 2022 Net Profit Fell on Higher Costs; Raises
Dividend
Close Brothers Group PLC said Tuesday that profit for fiscal
2022 fell on higher expenses, but increased its dividend
payout.
---
AG Barr Warns of Economic Challenges Ahead Despite Good 1H
Performance
A.G. Barr PLC said Tuesday that it expects the current economic
environment to hurt consumers' purchasing behavior as it reported a
rise in pretax profit for the first half of fiscal 2023 on a rise
in revenue across all of its core brands.
---
First Property Funds Under Management Fell in Early Fiscal
2023
First Property Group PLC said Tuesday that its total funds under
management have decreased in fiscal 2023 to date following the sale
of several properties.
---
Mortgage Advice Bureau 1H Pretax Profit Fell Amid Difficult
Macro Environment
Mortgage Advice Bureau (Holdings) PLC said Tuesday that pretax
profit for the first half fell amid an increasingly difficult macro
environment.
---
S&U 1H Pretax Profit Rose; Raises Dividend
S&U PLC said Tuesday that pretax profit for the first half
of fiscal 2023 rose on increased revenue and it declared a dividend
payout.
---
Billington Shares Rise on Higher 1H Pretax Profit, Expectation
of 2022 Profit Beating Views
Shares in Billington Holdings PLC rose Tuesday after the company
said that its first-half pretax profit rose significantly together
with revenue on new business and continued recovery, and that it
expects full-year profit to exceed management views.
Market Talk:
TinyBuild Is Highly Undervalued, Peel Hunt Says
0935 GMT - TinyBuild is highly undervalued and is trading at a
double-digit discount to its peers, Peel Hunt analysts James
Lockyer and Damindu Jayaweera say in a research note. The company's
back catalogue gaming revenue bodes well for the second half and
the fact that Secret Neighbor is going to online game platform
Roblox looks exciting, they say. Elsewhere, releases of new games
such as SpiderHeck, Justice Sucks, and Tinykin look reassuring,
Lockyer and Jayaweera say. Peel Hunt has a buy rating on the stock
with a target price of 200 pence. Shares are up 5.4% at 112.00
pence. (kyle.morris@dowjones.com)
AG Barr 1H Profit Gains, But Price Rises Cloud Outlook
0927 GMT - Shares in AG Barr drop 1% after the Scottish
soft-drink maker said it expected the economic environment to
affect consumers even as it reported higher first-half pretax
profit, revenue and dividends. Barr is finally seeing momentum
after a difficult period during lockdowns, Hargreaves Lansdown
says. "The group's continued investment into renowned brands like
Irn-Bru is starting to reap rewards, backed up by successful
launches of new product lines," HL's Charlie Williams writes. "Barr
isn't immune to inflationary pressures, though. Cost management
remains a key focus, but recent price hikes have already seen
volumes fall and management remains conscious of consumer-spending
patterns as incomes get squeezed." (philip.waller@wsj.com)
Virgin Money's Suspension of Mortgage Deals Makes Sense, AJ Bell
Says
0909 GMT - Virgin Money's decision to withdraw mortgage ranges
for new customers amid sterling volatility means that the lender
can recalculate what it needs to charge to still make money, AJ
Bell investment director Russ Mould says in a note. The costs
increase of long-term borrowing can hit mortgage lenders unless
they can push up their own rates, the director says. "Under normal
circumstances, mortgage lenders could do this work while still
having the full range of products available to customers, but
everything is moving at such a rapid pace that banks need to take
stock of events and not get caught out," Mould adds.
(michael.susin@wsj.com)
Rising Interest Rates Set to Hit UK Housing Market Hard
0906 GMT - The sharp increase in U.K. interest rates, which is
priced in by markets, could bring mortgage rates to about 6.6% from
3.6% in August, Capital Economics senior property economist Andrew
Wishart says in a note. At the current level of house prices, such
an increase would cause the cost of repayments on a new mortgage to
rise to their highest level since 1990, he says. "House prices fell
by 20% between 1989 and 1992, so if affordability were to
deteriorate to the same extent, prices would surely fall by more
than the 7% drop that we currently forecast," Wishart says. The
Bank of England is unlikely to be that aggressive, but until
inflation starts to fall, the housing market may have to be
"collateral damage," he says. (xavier.fontdegloria@wsj.com)
Markets Seen Overreacting to UK Government's Economic Policy
0853 GMT - The negative market reaction over the U.K.'s
government economic growth plan looks overdone, Berenberg's senior
economist Kallum Pickering says in a note. Higher deficits justify
higher yields and a lower exchange rate, but the U.K. remains a
solid advanced economy, doesn't have large external liabilities in
a foreign currency and will almost certainly be able repay its
debt, he says. However, the U.K. has damaged its once strong
credibility with a poorly managed Brexit and threats of a U.K.-EU
trade war, Pickering says. "Once upon a time, markets may have been
excited by the prospect of the U.K. cutting taxes and
deregulating," he says. "Today markets just see a government...
pursuing a last-ditch attempt to try and rescue its election
chances." (xavier.fontdegloria@wsj.com)
Turmoil on UK Gilt Market Makes Syndication Unlikely This
Week
0846 GMT - The hefty selloff in U.K. gilts in the past few days
and market talk of a potential emergency interest rate rise by the
Bank of England is likely to scupper the Debt Management Office's
plans for a bond syndication this week, Mizuho's analysts say.
"What's more certain is that the DMO will be unlikely to go ahead
with the syndication they were planning to carry out this week,"
Mizuho's rates strategist Peter McCallum and rates strategy analyst
Evelyne Gomez-Liechti write in a note. Investors sold gilts at a
fast pace after Friday's budget revision that resulted in a massive
increase in gilt issuance in 2022-2023. The 10-year gilt yield is
up about 2 basis points at 4.140%, according to Tradeweb.
(emese.bartha@wsj.com)
Contact: London NewsPlus; paul.larkins@wsj.com
(END) Dow Jones Newswires
September 27, 2022 12:56 ET (16:56 GMT)
Copyright (c) 2022 Dow Jones & Company, Inc.
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