FTSE 100 Live Thursday
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Just own it in a £191 million takeover
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UK orders improve Deliveroo’s performance
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Nestlé lowers guidance
Market update: Entain and Rentokil in demand, Deliveroo shares higher
09:58 , Graeme Evans
Recovery bets on Rentokil Initial and Entain today saw their shares make the cut in an otherwise lackluster session for the FTSE 100 index.
Ladbrokes and BetMGM operations To entail rose 4% or 27.6p to 739.6p after raising profit expectations on the back of a strong third quarter.
The Great Britain and Ireland division returned to year-on-year growth faster than expected, driven by betting ahead of England’s Euro 2024 final against Spain.
Primetime NFL matches on TV also boosted sales as the company forecast profits above the £1.04 billion to £1.09 billion mark.
Shares are still down 25% this year after falling this week on speculation that this month’s Budget will include a £3 billion tax attack on the sector.
Rentokil initial also reversed some of its recent heavy losses, rising 7% or 24.5p to 365.6p on relief with no further setback in trading performance.
The previous update in September showed volumes in North America were lower than expected after resources were increased in preparation for the peak season.
The pest control company said today that revenues in North America rose 1.4% in the third quarter as it stepped up efforts to rebalance its cost base.
Shares remain down 14% this year after trading above 600p in 2023.
Weaker mining stocks meant broader FTSE 100 index failed to capture much further upside after yesterday’s yield-driven 1% rise.
The top moved 10.86 points higher to 8339.93, reflecting caution ahead of an expected back-to-back interest rate cut by the European Central Bank.
The FTSE 250 index rose by 39.87 points to 21,019.37 Chemring rose 9p to 375p after the defense products company published an in-line trading update saying it was well placed to achieve an ambition of £1bn turnover by 2030.
Tate & Lyle Shares fell 15.5p to 791.5p after rising 8% yesterday on speculation it would be a takeover target for private equity firm Advent.
The food ingredients company, which is worth around £3 billion, made no comment.
In the meantime, Deliveroo Shares rose 3.3p to 150.2p after the company said profits will be in the upper half of its expected range, boosted by strong UK demand.
Nestle lowers expectations due to consumer caution
09:19 , Graeme Evans
Consumer goods giant Nestlé has lowered its full-year guidance after reporting 2% sales growth for the nine months of the year.
Amid weaker consumer demand and some hesitancy toward global brands, the company now expects organic sales growth to be around 2% in 2024. This is comparable to the 3% expectation given based on 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 achieved low single-digit growth and confectionery sales grew mid-single digits, led by KitKat.
Read more here
Rentokil Initial shares rise after reassuring update
08:57 , Graeme Evans
A robust update today took the under-pressure shares of pest control company Rentokil Initial to the top of the FTSE 100 index.
The increase of 8% or 26.4p to 367.5p reduces the decline this year to 15%.
The previous update in September showed volumes in North America were lower than expected after resources were increased in preparation for the peak season.
Rentokil said today that revenues in North America rose 1.4% in the third quarter as it stepped up efforts to rebalance its cost base.
CEO Andy Ransom told investors: “In North America, we recognize that the business has underperformed and are focused on delivering the required operational improvements.
“We are expanding our initiatives to increase organic growth and we are taking action to limit cost overruns.”
He left 2024 revenue and margin expectations unchanged, with Ransom backing the North American division to “lead a very resilient, growing market.”
Rentokil and Entain rise in the FTSE 100, Tate & Lyle shares fall
08:33 , Graeme Evans
The FTSE 100 index failed to build on yesterday’s 1% rise, with pressure on mining shares sending London’s top 5.64 points lower to 8323.43.
Joining weaker shares Glencore and Rio Tinto, Mondi fell 94p to 1296p as investors reacted to the paper and packaging company’s latest update.
Meanwhile, Rentokil Initial shares rose 27p to 368.1p after reassuring third-quarter results included no change to full-year expectations.
Gambling group Entain also improved 4% or 28.2p to 740.2p after raising full-year profit expectations.
The FTSE 250 index is 7.60 points lower at 20,971.90.
Tate & Lyle shares are down 21.5p at 785.5p, having risen 8% yesterday on speculation that it would be a takeover target for private equity firm Advent.
The FTSE 250-listed company, which is worth around £3 billion, made no comment.
Meanwhile, Deliveroo shares rose 6.7p to 153.6p after the company said profits will be in the upper half of the expected range.
Simply Be owner N Brown in £191m takeover
08:05 , Graeme Evans
N Brown, the fashion group that owns the Jacamo, Simply Be and JD Williams brands, has backed a £191m takeover from the son of long-standing former chairman Lord Alliance.
A company owned by entrepreneur Joshua Alliance, who is also a non-executive director of the Manchester-based group, has offered 40 cents per share in cash, up from last night’s closing price of 27 cents.
The Alliance family already owns approximately 60% of N Brown’s shares.
According to the bid vehicle, the reasons for the offer included N Brown’s low trading liquidity and limited interest from UK fund managers in small consumer stocks.
Read more here
Deliveroo UK orders grow 2% in Q3
07:58 , Graeme Evans
Deliveroo said today that annual profits will be in the upper half of the expected range of £110-130 million.
Gross transaction value rose 5% in the three months to September 30, with the UK and Ireland divisions up 7% on order growth of 2%.
Transaction growth for the financial year is expected to be between 5% and 9%.
Founder and CEO Will Shu believes his company is well-positioned to capture the “significant growth potential in an industry that is still in its early stages of maturity”
He added: “There are many exciting opportunities ahead for the on-demand delivery sector.”
Shares are up 16% this year to 147p, after rising from 125p in early August.
Europe is ready for a successive rate cut
07:38 , Graeme Evans
European Central Bank interest rates are expected to fall for the third time this year when policymakers announce their decision later today.
The quarter-point cut in the deposit rate to 3.25% follows a series of weak economic data and signs of inflation returning to target.
Economists at Deutsche Bank said the cycle’s first consecutive downgrade marked a shift toward faster easing.
Nevertheless, the bank does not expect the ECB to abandon the current ‘data-dependent, meeting by meeting’ policy approach.
After today, Deutsche Bank sees the ECB making cuts at every meeting until interest rates reach 2.25% in April.
Revenue retention gets a boost for Euro 2024
07:22 , Graeme Evans
Ladbrokes and BetMGM betting company Entain today raised earnings estimates following better forecast performance in the third quarter.
The top ten most popular betting matches in the period were the last three Euro 2024 matches and seven primetime NFL matches on TV.
Entain’s UK and Ireland division returned to year-on-year growth faster than expected, with net gaming revenue up 2% in the three months.
The BetMGM joint venture in the United States grew sales by 18%.
Entain’s underlying profits for the year are now expected to be near the top end of the £1.04 billion to £1.09 billion range.
Chief executive Gavin Isaacs said: “My first few weeks as CEO of Entain have confirmed my view that this is a very good company operating in a very attractive global industry.”
The FTSE 100 will continue its rally, with European yields in focus
07:03 , Graeme Evans
The FTSE 100 index is expected to rise another 28 points to 8358 after closing 1% higher last night on hopes of a faster pace of rate cuts.
Today’s gain follows a robust session on Wall Street, as the Dow Jones Industrial Average closed 0.8% higher and the S&P 500 index rose 0.5%.
The tech-focused Nasdaq also held steady after the previous day’s warning by semiconductor equipment company ASML Holdings shook confidence.
Today’s events include the prospect of another quarter-point cut in the European Central Bank’s key policy rates.
The pound continues to trade just below $1.30, while Brent Crude is little changed at $74.40 per barrel.