FTSE 100 Live Thursday
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Become an exclusive owner with £191m acquisition
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UK orders boost Deliveroo’s performance
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Nestle downgrades guidance
Market update: Entain and Rentokil in demand, Deliveroo shares on the rise
09:58 , Graeme Evans
Recovery bets on Rentokil Ilk and Entain today saw their shares rise in a weak session for the FTSE 100 index.
Ladbrokes and BetMGM business To hold It rose 4%, or 27.6 points, to 739.6 points after it raised its earnings forecast following a strong third quarter.
The UK and Ireland division returned to annual growth earlier than expected, driven by betting ahead of England’s Euro 2024 final against Spain.
TV prime time NFL matches also boosted revenues as the company forecast earnings at the top of its guidance range of £1.04bn to £1.09bn.
Shares, which fell this week on speculation that this month’s budget will include a £3bn tax raid on the sector, are still down 25% this year.
Rentokil Start It also clawed back some of its recent heavy losses, rising 7%, or 24.5 points, to 365.6 points after easing off further downturns in trading performance.
Its previous update in September revealed lower-than-expected volumes in North America and expanded supplies in preparation for the busy season.
The pest control firm said today that its North American revenues rose 1.4% in the third quarter and that it is accelerating efforts to rebalance its cost base.
Shares remain 14% lower year-to-date after trading above 600p in 2023.
Weaker mining stocks meant broader FTSE 100 index After yesterday’s 1% increase in the interest rate, it could not achieve any further increase.
The high rose 10.86 points to 8339.93, reflecting caution ahead of the European Central Bank being expected to make consecutive interest rate cuts.
FTSE 250 index It increased by 39.87 points to 21,019.37. Chemring It rose 9p to 375p after the defense products firm published an in-line trading update and said it was well placed to meet its £1bn revenue target by 2030.
Tate and Lyle Shares rose 8% yesterday, falling 15.5 points to 791.5 points, due to speculation that private equity firm Advent was a takeover target.
The food ingredients firm, valued at around £3bn, had no comment.
Meanwhile, Deliveroo Shares rose 3.3 points to 150.2 points after it said earnings would be in the upper half of its forecast range, driven by strong demand in the UK.
Nestle downgrades guide due to consumer warning
09:19 , Graeme Evans
Consumer products giant Nestlé cut its full-year forecast after reporting sales rose 2% in the nine months of the year.
It expects organic sales growth to be around 2% in 2024, amid weakening consumer demand and some hesitancy towards global brands. This compares with the 3% forecast given in the half-year results.
Coffee was the biggest contributor to growth in today’s third quarter results, with mid-single digit growth driven by leading brands Nescafé, Starbucks and Nespresso.
Purina PetCare posted low-single-digit growth and confectionery sales showed mid-single-digit growth, led by KitKat.
Read more here
Rentokil İlk shares rise with reassuring update
08:57 , Graeme Evans
A strong update today has lifted the under-pressure shares of pest control firm Rentokil Initial to the top of the FTSE 100 index.
The increase of 8%, or 26.4 points, to 367.5 points brought the year-to-date decline to 15%.
Its previous update in September revealed lower-than-expected volumes in North America and expanded supplies in preparation for the busy season.
Rentokil said today that its North American revenues rose 1.4% in the third quarter and that it is accelerating efforts to rebalance its cost base.
Chief executive Andy Ransom told investors: “We recognize that the business is underperforming in North America and are focused on delivering the necessary operational improvements.
“We are expanding our initiatives to increase organic growth and taking action to reduce cost overruns.”
It left its 2024 revenue and margin guidance unchanged, with Ransom backing its North American division to “lead a highly resilient, growing market.”
Rentokil and Entain rise in FTSE 100, Tate & Lyle shares decline
08:33 , Graeme Evans
The FTSE 100 index failed to break above yesterday’s 1% rise as pressure on mining shares caused London’s top index to fall 5.64 points to 8323.43.
In addition to the weakening of Glencore and Rio Tinto shares, Mondi fell 94 points to 1296 points as investors reacted to the paper and packaging company’s latest update.
Meanwhile, Rentokil First shares rose 27 points to 368.1 points after it reassured that its third-quarter results included no change to full-year guidance.
Gambling group Entain also rose 4%, or 28.2 points, to 740.2 points after raising its full-year earnings forecast.
The FTSE 250 index is at 20,971.90, with a decrease of 7.60 points.
Tate & Lyle shares rose 8% yesterday, falling 21.5 points to 785.5 points, on speculation it was targeting a takeover of private equity firm Advent.
The FTSE 250-listed company, valued at around £3 billion, had no comment.
Meanwhile, Deliveroo shares rose 6.7 points to 153.6 points after it said earnings would be in the upper half of its forecast range.
Own N Brown in £191m purchase
08:05 , Graeme Evans
Fashion group N Brown, which owns the Jacamo, Simply Be and JD Williams brands, has backed a £191 million takeover from the son of its long-time former chairman, Lord Alliance.
A company owned by entrepreneur Joshua Alliance, who is also a non-executive director at the Manchester-based group, offered 40p per share in cash, compared to last night’s closing price of 27p.
The Alliance family currently owns approximately 60% of N Brown.
The bidder said reasons for the offer included N Brown’s low trading liquidity and the UK fund manager’s limited appetite for small-cap consumer shares.
Read more here
Deliveroo UK orders up 2% in Q3
07:58 , Graeme Evans
Deliveroo said today its annual earnings would be in the upper half of its £110-130 million guidance range.
Gross transaction value increased by 5% in the three months to 30 September; The UK and Ireland division was up 7% following order growth of 2%.
Transaction growth for the fiscal year is expected to be in the range of 5% to 9%.
Founder and CEO Will Shu believes his company is well positioned to capture “significant growth potential in an industry that is not yet mature.”
He added: “There are many exciting opportunities ahead for the on-demand delivery industry.”
Shares have risen 16% this year to 147p from 125p at the beginning of August.
Europe is preparing for consecutive interest rate cuts
07:38 , Graeme Evans
European Central Bank interest rates will fall for the third time this year when policymakers announce their decisions later today.
The cut in the deposit rate by a quarter point to 3.25% follows a series of weak economic data and signs that inflation is returning to target.
Deutsche Bank economists said the first back-to-back cuts in the cycle signaled a shift towards faster easing.
However, the bank does not expect the ECB to move away from its current ‘data-driven, meeting-by-meeting’ policy approach.
After today, Deutsche Bank predicts that the ECB will cut interest rates at every meeting until rates reach 2.25% in April.
Entain’s earnings get boost in Euro 2024
07:22 , Graeme Evans
Ladbrokes and BetMGM gambling business Entain today removed its earnings forecast following forecast-beating performance in the third quarter.
The ten most popular betting matches of the period were the last three Euro 2024 fixtures and seven TV prime time NFL matches.
Entain’s UK and Ireland division returned to annual growth earlier than expected, with net gaming revenues up 2% in the quarter.
BetMGM joint venture in the United States increased revenues by 18%.
Entain’s underlying earnings this year are now expected to be towards the top of its £1.04bn to £1.09bn guidance range.
Chief executive Gavin Isaacs said: “My first few weeks as CEO of Entain have reaffirmed my view that this is a very good business operating in a highly attractive global sector.”
FTSE 100 set to continue its rise, focus on European interest rates
07:03 , Graeme Evans
The FTSE 100 index, which closed last night with a 1% increase due to the hopes of faster interest rate cuts, is expected to increase by 28 points to 8358.
Today’s rise follows a strong session on Wall Street, with the Dow Jones Industrial Average up 0.8% and the S&P 500 index up 0.5%.
Technology-focused Nasdaq also calmed down after semiconductor equipment company ASML Holdings’s warning the previous day shook confidence.
Today’s developments include the possibility of another quarter-point cut in the European Central Bank’s main policy interest rates.
Sterling continues to trade just below $1.30, while Brent Crude Oil was little changed at $74.40 per barrel.