- FTSE 100 closes 23 points ahead
- Wall Street struggling higher, just DJIA in the red
- HSBC says Asia business is "motoring"
4.40pm: FTSE finishes in the green
At the close, the FTSE 100 was in positive territory, having gained 0.3% on the day to finish at 7,778 points.
Markets are starting the new week on a cautious note, as US debt ceiling talks continue, Michael Hewson of CMC Markets noted.
"We’ve seen a modestly subdued session for markets in Europe today, opening higher on the back of the more positive mood coming out of the US, with respect to positive noises coming out from the debt ceiling negotiations at the weekend," Hewson wrote.
"With the opening of US markets these gains started to melt away in the afternoon session as markets gave up these gains to slide into the red, although the FTSE100 appears to be outperforming, due to a modest rebound in commodity prices which is supporting the basic resources and oil and gas sector."
3.55pm: Royal Mail could be fined
Ofcom said it has launched an investigation into International Distributions Services PLC (IDS) unit Royal Mail's failure to meet its delivery targets in the past year.
The delivery firm fell short of its performance targets across its 2022 to 2023 financial year for first and second-class mail and deliveries, the regulator said in a statement, with only 74% of first-class mail delivered within one working day across the year against a target of 93%.
Ofcom said it takes quality of service very seriously and could fine Royal Mail if it cannot reasonably explain why it missed the targets.
The coronavirus pandemic can no longer be used as an excuse for poor delivery performance, Ofcom said.
The probe follows last week's news that IDS boss Simon Thompson will step down by the end of the year. His departure was announced weeks after a lengthy dispute with the main UK postal union came to an end.
IDS shares were 0.5% lower at 226.80p late on Monday afternoon.
3.45pm: Patently unfair
GSK received a booster on Monday after Reuters reported that the US Supreme Court has declined to hear Teva Pharmaceuticals USA's challenge to a $235mln award in a patent dispute over generic drugs involving a heart medication.
Reuters said the justices turned away Israel-based Teva's appeal of a lower court's ruling reinstating the jury award in a case that involves "skinny labels," which allow generic drugmakers to avoid patent lawsuits if a generic drug's label omits potentially infringing uses of a brand-name drug.
GSK sued Teva in Delaware federal court in 2014 over its generic version of GSK's heart drug Coreg and a jury awarded the UK firm $235 million in 2017. A judge then overturned the verdict, but the patent-focused US Court of Appeals for the Federal Circuit reinstated it in 2020.
Teva, in its appeal, told the Supreme Court that the ruling would cause "havoc" and discourage the use of skinny labels, which it said are "extraordinarily common" and "save patients and the federal government billions," Reuters noted.
GSK responded in a court brief that the case "presents no threat to generic companies who operate properly under the law," the newswire said.
3.30pm: THG downgraded after Apollo bid rejection
Analysts at Canaccord Genuity have downgraded their rating for THG to 'hold' from 'speculative buy' following the eCommerce firm's decision on Friday to reject a bid from private equity giant Apollo.
They also changed their valuation methodology for THG to a sum-of-the-parts basis, on the back of which the target price was reduced to 69p from 98p. THG shares were trading at 58p on Monday afternoon, down 7.8% on Friday's close.
The analysts said: "We downgrade our recommendation to HOLD (from Speculative Buy), with THG currently trading on a FY23E EV/EBITDA of c.11x, at the top end of the UK eCommerce sector valuation range.
"In our view, it could be a long road to recovery, with an uncertain outlook and two of the three core divisions currently misfiring."
"The failure of the Apollo discussions will no doubt raise question marks over why," the Canaccord analysts concluded, particularily while the trading environment in the sector remained tough and visibility on demand was "limited".
3.10pm: Food and fuel probes continue
The Competition and Markets Authority (CMA) has said it will step up its probe into grocery prices but has not seen evidence pointing to specific concerns in the sector so far.
Official data showed UK food prices were 19.1% higher in March than a year earlier, the biggest such rise since August 1977, while in April, grocery inflation was 17.3%, according to industry data.
"Given ongoing concerns about high prices, we are announcing the stepping up of our work in the grocery sector to understand whether any failure in competition is contributing to grocery prices being higher than they would be in a well-functioning market," the CMA said in a statement.
The competition watchdog said it would focus its work on areas where people are experiencing the greatest cost of living pressures.
Separately, the CMA said it had found evidence that weakening retail competition was contributing to higher fuel prices for drivers. It said it was not satisfied that some supermarkets had been sufficiently forthcoming in their responses to its road fuel market study.
2.45pm: Living on the (debt) ceiling
The FTSE 100 index held its modest gains even as US stocks made mixed early progress on Monday as investors’ eyed hopes that political leaders could this week reach an agreement on the country’s debt ceiling.
President Joe Biden is set to meet with congressional leaders on Tuesday to resume negotiations after talks were pushed back from Friday.
Around 20 minutes after the Wall Street opening bell, the Dow Jones Industrials Average had lost 62 points, or 0.2% at 33,238, while the S&P 500 was down 0.1%, but the Nasdaq Composite added 0.3%,
Major movers in New York included monday.com, which was higher on a first-quarter earnings beat, and Shake Shack, which rose on reports of an activist investor-led company shake-up.
2.30pm: Wake up and smell the coffee (prices)
London’s bleary-eyed morning commuters could be in for a rude awakening if the global coffee bean shortage continues to drive brew prices up.
Soaring demand for the cheaper robusta bean variety is causing a global shortage of the hardier bean as growers struggle to keep up.
Meanwhile, robusta’s more sophisticated cousin, the arabica variety typically used in fancier outlets, has been hit by severe frost and natural disasters in the arabica-growing hotspots of Brazil and Central America.
Though robusta, which is mainly grown in Vietnam and Indonesia, is typically used in instant coffee blends, it is also finding its way into espresso-based brews.
Recent supply constraints from all this demand have sent London robusta futures soaring to a 12-year in the past week, marking a 30% year-to-date increase.
As noted by Bloomberg today, instant coffee prices in Europe’s largest coffee market Germany have increased by up to 20% in the past year, for which London commuters can certainly commiserate.
2.15pm: God save our livers
Pub and bar sales rocketed over the Coronation weekend, research from industry CGA has found, strengthened by a huge uptick in people drinking spirits.
The rainy weather during King Charles III’s Coronation may have meant some stayed home rather than heading to central London on Saturday, but this didn’t stop celebrations.
Beginning on Friday, a day before the ceremony, total drink sales jumped 23% year-on-year. Sales then slowed on the actual day of the Coronation, rising only 12%, as many headed to street parties or the nearest TV to watch the King be crowned.
It was on Sunday when the celebrations really began, with the sales of drinks rocketing 118% versus the same day a year ago, and that party feeling continued into the Bank Holiday Monday, with beverage sales spiking 56% annually.
Spirits were the best-performing category over the weekend, soaring 192% on Sunday and 52% over the whole weekend.
It has been a tough 2023 for the spirits market, over the Easter weekend sales were 22% behind the equivalent period a year before.
1.30pm: A quick look at today’s movers in London
Fallers
Microsaic Systems - down 10% to 0.03p: Shares dropped on Monday as the developer of micro-electronic instruments and analytical solutions revealed that the audit of its full-year 2022 (FY22) results is taking longer than initially anticipated.
Pembridge Resources - down 82% to 0.25p: Shares tanked amid funding worries over Minto Mining, a Canadian company it has loaned C$2mln to. Minto has told Pembridge it is unlikely to be able to repay the sum, including the $250,000 tranche due this year.
Risers
IOG - up 11.5% to 5.8p: Shares jumped higher after it told investors that a previously announced "well control event" in the Blythe H2 well has now been isolated without the need to drill a sidetrack well.
1.00pm: US futures point to a positive start on Wall Street
The FTSE 100 is holding just below best levels for the day now, up 34 points at 7,789.
Across the pond, US stocks look set to rally on Monday following back-to-back weekly losses for the Dow Jones Industrial Average (DJIA) and S&P 500, although investors are searching for fresh direction and worries over a possible US government default next month remain a concern.
In pre-market trading, futures for the DJIA pointed 0.4% higher, while S&P 500 futures also added 0.4%, and contracts for the Nasdaq-100 gained 0.3%.
Wall Street's main indexes ended lower on Friday as they absorbed a preliminary reading from the University of Michigan last week that showed consumer sentiment falling to a six-month low - the DJIA shed 0.03%, while the S&P 500 lost 0.2%, and the Nasdaq Composite fell 0.4%.
Overall the DJIA lost 0.3% and the S&P 500 shed 1.1%, respectively, last week. The Nasdaq Composite, however, advanced 0.4%.
Joshua Mahony, chief market analyst at Scope Markets commented: "After last week’s losses, major US equity indices are pointing towards a higher start at Monday’s opening bell – at least for now. Sentiment still seems to be very much on the back foot however with concerns that further rate hikes from the Fed may still prove necessary to tamp down inflation and earnings news remaining distinctly mixed."
He added: "Economic news in the hours ahead remains limited but there are a series of speeches due from Federal Reserve Bank branch presidents today that will be closely followed for further clues – or even opinions – as to where monetary policy might go next.
"Earnings news also looks thin on the ground, but with those recession fears still lingering the macroeconomic backdrop will remain front of mind in the days ahead."
Also in focus were debt ceiling negotiations as the US draws nearer to the so-called 'X date', when the government may go into default without a raise in the debt limit to pay its bills.
CNBC reported a meeting between President Joe Biden and congressional leaders on the topic was rescheduled to this week.
Investors will also be watching for May data from the Empire State Index, which will show how New York State manufacturers feel about the economy.
Economists are expecting a reading of 1.0, which would be much lower than the 10.8 level in previous data.
12.46pm: Currys share price jumps on strong UK performance
Currys PLC (LSE:CURY) continues to push ahead after it raised profit guidance for the year on the back of a strong performance in the UK & Ireland which offset continuing problems in the Nordics.
Russ Mould at AJ Bell pointed out: "Today’s profit upgrade raises the question of just how well Currys might be doing if it wasn’t for the previously reliable Nordics business hitting the skids."
“Like an athlete who has found a new level of performance only to find a stone in their shoe, the electronics retailer continues to churn out an impressive performance in the UK and Ireland, belying a difficult backdrop, while continuing to struggle in Scandinavia," he added.
"For a long time, the Nordics arm just quietly did the business for Currys, serving an affluent customer base, but what initially seemed to be a short-term problem of competitors selling off excess stock at a discount has become a lingering issue and prompted the company to change its regional boss," he explained.
If Currys "can get its Scandi operations back up to scratch it could win over investors who have turned away from the company in recent weeks" he reckoned.
Richard Hunter at interactive investor described the update as "brief but positive" which has "provided some respite for a beleaguered share price."
But he while he felt Currys "may be winning the battle but it has a considerable way to go to win the war," noting the issues in the Nordics.
He said the Nordics account for over 40% of group revenues and noted that "new entrants to the space have relied on heavy discounting of goods to announce their arrival".
While this "may prove to be a temporary backdrop," like-for-like sales have dropped by 10%.
"The upgrade is a welcome relief for embattled shareholders, although the market consensus of the shares as a hold indicates that most investors are not yet willing to buy into any recovery story," Hunter added.
12.20pm: Capita's licence fee deal with the BBC behind schedule and over budget
Capita PLC's (LSE:CPI) share price came under fresh pressure as The Times reported that a project to update the technology behind the BBC’s licence fee is behind schedule, over budget and considered to be in a critical state.
The outsourcing specialist is responsible for the project which has been classified within Capita as “red”, needing urgent attention, on an internal traffic-light system.
Capita is responsible for administering the licence fee on behalf of the broadcaster in a five-year deal worth £456mln after it won an extension to its contract last year.
As part of winning the extension, the BBC required Capita to oversee “significant IT upgrades”, according to the BBC TV licence fee trust statement for the year to the end of March 2022, which is presented each year to parliament reviewing the state of the licence fee.
But the most recent BBC report on the licence fee presented to parliament said the IT upgrades Capita was overseeing “pose a risk to the collection of the licence fee should problems occur”.
Technological issues that need resolving include finding a replacement for IBM, the corporation’s partner, which will stop hosting the licence fee website from August.
The Times reported that it is understood that the BBC is withholding payment from Capita because of setbacks that have meant the company is more than £1.5mln above budget.
It’s the latest bad press for the company already reeling from the fallout from a cyber attack that could cost it up to £20mln.
11.38am: HSBC's Asian business is "motoring" says CEO
HSBC Holdings PLC (LSE:HSBA) said all parts of its Asian business are now “motoring” as it detailed targets for growth in lending, revenue and return on equity.
"All parts of HSBC Asia are now motoring," said chief executive Noel Quinn. "In mainland China, we are ideally positioned to facilitate business with the rest of the world; in South and Southeast Asia, we have invested heavily in Singapore, and we have significantly bolstered our growing business in India."
The Asia-focused lender gave the update as it prepares to host a week-long seminar for investors and analysts in Hong Kong and Singapore.
"In addition to our core strength in Hong Kong, we now have growth engines in mainland China, India, Singapore and beyond," Quinn said.
The FTSE 100-listed bank said it is targeting mid-single-digit percentage growth in lending over the medium to long term for its Asia business but is more cautious in the short-term. It aims for mid-teens return on tangible equity.
The banks targets high-single-digit percentage growth in revenue for its Wealth arm in Asia.
For the group as a whole, HSBC targets a return on average tangible equity (RoTE) of at least 12% from 2023. For 2022 it reported a RoTE of 9.9%.
Shares in HSBC rose 1.4% to 608.30p in London late morning.
The FTSE 100 is close to best levels for the day now at 7,789.42, up 34.80 points, or 0.45%. It earlier hit a session high of 7,792.24.
11.12am: Center Parcs up for sale - FT
Canadian private equity firm has put UK holiday resort Center Parcs up for sale and is looking for £4bn-£5bn, according to the Financial Times.
Citing people familiar with the deal, the FT said the decision to go ahead with the sale marks a bold move for Brookfield as the UK faces falling property values and higher interest rates.
But it could also net Brookfield a windfall for Brookfield after paying just £2.4bn for the holiday village operator from Blackstone in 2015.
The FT said Brookfield has appointed investment bankers who have been sounding out potential buyers in the past week, the people said.
Center Parcs operates six resorts in the UK and Ireland, offering attractions such as water parks and forest playgrounds with its five UK sites were independently valued at £4.1bn in April, based on the value of the real estate alone.
The company hosts more than 2mln guests a year with 98% occupancy, according to Brookfield.
Travel and leisure have been strong performers in the equity as consumers have rediscovered their loves of sun, sea and sand after being locked up during the pandemic.
Airlines and hotels have reported bumper bookings in the past quarter with strong booking levels already reported for the Summer.
10.42am: Strong governance needs to be a priority for new BAT boss
News of a new CEO at BAT has left the shares little changed.
Derren Nathan, head of equity research, Hargreaves Lansdown thinks "strong governance needs to be front and centre" of Tadeu Marroco's priorities going forward.
Nathan points out he faces a "few burning challenges" as he takes up the helm at the firm explaining the market hasn’t taken well to the almighty $635mln "wrist slap" imposed last month by the US Department of Justice and Office of Foreign Assets, for poor disclosures regarding exports to North Korea in 2017.
Although with $540mln already provided for in the company’s books, most of this should have been in the price already, Nathan reckons.
He also noted whilst new categories of tobacco products are a core focus these products are also coming under increasing scrutiny as shown by Australia’s decision to ban imports of non-prescription vapes.
BAT shares were trading 0.3% higher at 2,715p in London mid-morning, while the FTSE 100 was pushing back towards its best levels for the session, now up 33 points at 7,788.
10.00am: Staff shortages hit health and education sectors hardest, report finds
Staff shortages in education and health are worse than in any other area of the UK economy as public sector wages fall further behind those offered in the private sector, according to a survey of employers.
Six out of 10 employers in education said they had vacancies that were hard to fill, while more than four in 10 expected “significant problems” filling posts over the next six months, a report by the CIPD organisation for HR professionals showed.
In healthcare, 55% of employers had hard-to-fill vacancies, compared with 40% of all private sector employers, according to the survey.
The CIPD found that private sector employers were more likely than those in the public sector to improve job quality when they were struggling to recruit, for example, by offering better career pathways or greater flexibility.
Public sector employers, in contrast, were more likely to respond by loading more duties onto their existing staff.
Concerns over workload and a growing recruitment crisis in schools have fuelled the resolve of teaching unions to seek a mandate from members to launch co-ordinated strike action from the autumn.
Meanwhile the FTSE 100 remains around 19 points to the good at 7,774.
9.35am: Turkish turmoil on electoral uncertainty
Turmoil in Turkey this morning as traders prepare for a run-off between President Recep Tayyip Erdoğan and his opponent Kemal Kilicdaroglu after yesterday’s presidential election failed to deliver a winner.
The Turkish lira weakened to 19.67 against the US dollar while the BIST 100 share index tumbled 3.0% after earlier falling as much as 6%.
Susannah Streeter, head of money and markets, Hargreaves Lansdown commented: ‘’The scattergun of political uncertainty is keeping the Turkish lira on a volatile path, as the country heads for a run-off in the Presidential race. Erdogan has led highly controversial monetary policies aimed at increasing exports, rather than tackling painful inflation, and the prospect of Turkey’s ‘strongman’ winning another term has weakened the currency further.“
“There are expectations of a rollercoaster ride in the days ahead, as sentiment waxes and wanes about the prospects for the opposition coalition, which has pledged to pull more conventional levers to restore financial stability," she added.
9.15am: EC upgrades growth forecasts for Europe
Europe’s economy is expected to grow faster than previously expected over this year and next, but inflation will be higher than hoped too.
The European Commission’s latest economic forecasts show that the economy “continues to show resilience in a challenging global context”.
The European economy is in better shape than we projected last autumn.
It is holding up remarkably well in the face of Russia’s aggression against Ukraine, leading to an upgrade in today’s growth forecast for 2023.
Read the Spring #ECForecast ↓
— European Commission (@EU_Commission) May 15, 2023
With fears of a recession easing, growth so far this year has been stronger than expected, they say.
The EC now expects eurozone GDP to rise by 1.1% this year, up from 0.9% forecast in February, rising to 1.6% in 2024 (revised up from 1.5%).
Growth forecast for 2023 (%):
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Spring #ECForecast ↓ pic.twitter.com/nwgBY9GMkb
— European Commission (@EU_Commission) May 15, 2023
The Commission said: "The European economy has managed to contain the adverse impact of Russia’s war of aggression against Ukraine, weathering the energy crisis thanks to a rapid diversification of supply and a sizeable fall in gas consumption."
However, inflation has also been revised upwards compared to the winter, on the back of “persisting core price pressures”.
Inflation is now expected to average 5.8% across the eurozone in 2023, and drop to 2.8% in 2024 – still above the European Central Bank’s target of 2%.
Previously, inflation was forecast to average 5.6% this year, and 2.5% in 2024.
The upgraded forecasts in Europe come after the Bank of England lifted its expectations for growth in the UK last week.
8.53am: FTSE holds gains, Asos slips on fundraising fears
The Footsie remains in the green although off earlier highs, now up 19 points, reflecting gains across Europe.
The CAC 40 in Paris is 0.4% higher while the Dax in Frankfurt is 0.2% to the good.
Susannah Streeter, head of money and markets, Hargreaves Lansdown noted: "European indices have edged up on the open, with the FTSE 100 given a leg up after the dollar has strengthened, making the overseas earnings of multinational listings worth more."
Currys continued to lead the risers in the FTSE 250, up 6.6%, after its raised guidance pleased investors while John Wood languishes, down 36% after Apollo Global Management (NYSE:APO) ruled out making a bid for the firm.
Analysts at Jefferies International said: "We have spoken briefly with Wood who say Apollo's due dilligence was extended and detailed since the decision to engage on 17th Apri and that little feedback has been given over Apollo's reasons."
Asos was also under also pressure with shares down a further 7.8% after disappointing results last week.
Analyst Eleonora Dani at Shore Capital thinks "it is becoming increasingly evident that Asos will need to seek further capital infusion to support its long-term viability."
"Despite the recent amendment of the RCF, which has increased to £350mln from £250mln with only £100mln remaining undrawn, we believe a further capital raise is likely.
"This assessment is based on the realisation that the measures implemented may fall short in stabilising the business within the existing macroeconomic context," Dani said.
Shore Capital has a 'sell' rating on Asos.
8.15am: FTSE 100 opens higher
The FTSE 100 has made a strong start to the week as gains in Asian markets provided support.
At 8.15am, London’s lead index stood at 7,782.70, up 28.08 points, or 0.36%.
Currys share price rose 4.7% after the electrical retailer raised its financial year 2023 profit guidance to a range of £110-120mln (up from £104mln before) with UK & Ireland full-year adjusted EBIT expected to increase more than 40% year-on-year.
"UK&I trading has been better than expectations, especially in the final two months of the year," Currys said.
Currys said net debt would be at the bottom end of previous guidance and that it had renegotiated the fixed charge cover covenant on its £500mln revolving credit facility.
Liberum described the update as “better than expected” and increased its financial year 2023 adjusted group pre-tax profit forecast by c.9% to £110mln – the bottom of the newly guided range.
Heading the other way were shares in John Wood which fell 37% after Apollo Global Management (NYSE:APO) confirmed it did not intend making a bid for the company.
The private equity firm had made a series of proposals to buy John Wood, the latest valuing the FTSE 250-listed group at 240p per share.
But after engaging with Apollo and granting it access to due diligence materials no offer has been forthcoming.
Analysts at Peel Hunt said that “whilst this news is disappointing, there is a medium-term strategy in place to improve group performance and a calendar of investor relations events to highlight the potential to investors”.
“We expect the stock to settle back and reiterate our 200p target price,” the analysts added.
Shares in Diploma rose 2.8% after raised its annual guidance following a strong half-year performance. In the six months that ended March 31, 2023, the specialised technical products and services company said revenue jumped 30% year-on-year to £582.8mln, up from £448.5mln a year earlier, lifting pre-tax profit by 50% to £78.7mln from £52.3mln.
Diploma now expects annual organic revenue growth of around 7% for the full year, with another 7% to come from acquisitions, net of disposals. It expects operating margin to be 19% - the top end of its previously guided range.
7.55am: Currys lifts profit guidance due to strong UK showing
Currys PLC (LSE:CURY) has upped its profit guidance for the year after a better-than-expected performance in the UK & Ireland.
The electrical retailer now expects full-year adjusted pre-tax profit between £110-120mln (up from £104mln before) with UK & Ireland full-year adjusted EBIT expected to increase more than 40% year-on-year.
"UK&I trading has been better than expectations, especially in the final two months of the year," Currys said.
"Improved profits driven by continued gross margin improvements and management focus on cost efficiencies," the company added.
Not such good news in its International business where full-year adjusted EBIT is expected to be "materially lower than last year driven by Nordics."
The Nordics trading environment "remains challenging, but under new management we have made progress on margins and costs," Currys said.
Net debt at the year-end is seen at the bottom end of previous guidance at around £100mln (previously guided to £100mln to £150mln).
Currys also said it agreed to amend the fixed charge covenant of its £500mln revolving credit facility to 1.5x from 1.75x for the periods between 28 October 2023 and 26 October 2024.
7.47am: BAT names finance chief as new CEO as Bowles steps down
British American Tobacco PLC (LSE:BATS) has named Tadeu Marroco as its chief executive succeeding Jack Bowles who is stepping down from the board today.
Tadeu joined BAT in 1992 and was appointed to the board in 2019 as group finance director (FD).
Javed Iqbal will become interim FD while the search for a new finance head continues.
Bowles, who also joined the board in 2019, has led the maker of Lucky Strike and Dunhill cigarettes through its transformation strategy to focus growth on new categories such as vape and e-cigarettes.
"Having been at the centre of the formulation of this strategy, I am convinced that this is the right strategic path for BAT," Marroco said in a statement.
7.42am: WANDisco mulls $30mln fundraising
WANdisco PLC is mulling a number of funding options as it works towards the resumption of trading in its shares as the UK and US software group continues to deal with a Financial Conduct Authority probe into its accounting practices.
The group plans to launch a $30mln fundraise towards the end of June to build balance sheet strength in order “to take advantage of the significant opportunities ahead.”
The company said it will commence a consultative process with investors to assess the potential for the proposals “balancing all the different priorities and risks.”
As of April 30, 2023, WANDisco said it had a net cash balance of $8.1mln with no debt facilities and believes this provides the company with sufficient working capital until the middle of July 2023.
The fundraising will form part of the group’s turnaround plan alongside cost reductions and working capital improvements.
“WANdisco's business growth needs to be underpinned by a resilient balance sheet and the proposed fundraise will enable it to build balance sheet strength to take advantage of the significant opportunities available to it,” the company said in a statement.
Any resumption in trading in the group’s shares is unlikely until after the fundraising.
7.22am: John Wood Group says Apollo does not intend to make a bid
John Wood Group will not be taken over, at least for now, after Apollo Global Management (NYSE:APO) confirmed it does not intend making a bid for the company.
The private equity firm had made a series of proposals to buy John Wood, the latest valuing the FTSE 250-listed group at 240p per share.
But after engaging with Apollo and granting it access to due diligence materials no offer has been forthcoming.
John Wood said it remains confident in its strategic direction and long-term prospects and believes that, following a transformative year in 2022, including new executive leadership and a new strategy, Wood is well-placed to deliver substantial value for shareholders.
“Our medium-term targets set out in November 2022 are to deliver adjusted EBITDA growth at mid to high single digit CAGR, with momentum building over time, and to return to positive free cash flow in 2024,” the company said in a statement.
“Furthermore, as set out in the Q1 trading update on 11 May 2023, there is good momentum across all business units which has continued since the end of Q1, with expectations for the full year unchanged," it added.
7.00am: FTSE 100 set to make a bright start
Good morning. The FTSE 100 is expected to make a bright start to the week despite ongoing nervousness about the debt ceiling discussions in the US.
Spread betting companies are calling London’s lead index up by around 20 points.
Michael Hewson at CMC Markets said: “Sentiment hasn’t been helped by the political theatre around the US debt ceiling which has dominated the discourse in the media, and where discussions have been pushed into this week.
“While the risks around this are well-rehearsed it could be argued that the risks appear somewhat overstated given how regularly we’ve seen this scenario play out over the last few years on a regular “rinse and repeat” basis before a late compromise is sealed.”
In the US on Friday, Wall Street ended mostly lower, with the Dow Jones Industrial Average closing flat, the S&P 500 off 0.2%, and the Nasdaq Composite down 0.4%.
In Asia on Monday, markets made ground. The Nikkei 225 index in Tokyo advanced 0.7%, in China, the Shanghai Composite was slightly higher, while the Hang Seng index in Hong Kong rose 1.2%.
Back in London and the early focus will be on updates from Diploma, Cerillion and Currys.