FTSE 100 Live: Joe Biden’s oil pact sends FTSE100 into the red

·17-min read
 (ESI)
(ESI)

FTSE 100 Live Thursday

  • Royal Mail unveils £200m special divi

  • Oil prices fall as China/US target energy prices

  • Carlyle walks away from Metro Bank bid

  • Unilever sells PG Tips to CVC

The black stuff sends FTSE into the red

Thursday 18 November 2021 17:37 , Simon Freeman

BP and Shell tipped the FTSE 100 into the red as their value waned on the back of crude oil prices tumbling to six-week lows.

The blue-chip index closed 35.24 points, or 0.48%, lower at 7,255.96.

It came as the pound reached a pandemic high against the euro, topping 1.19e for the first time since February 2020.

The German Dax decreased by 0.18% and the French Cac dropped by 0.21%

Michael Hewson at CMC Markets: “The FTSE 100’s struggles continued today, this time feeling the effects of GlaxoSmithKline going ex-dividend, while weakness in BP and Royal Dutch Shell, due to the slide in oil prices overnight, has acted as another significant drag on overall sentiment.”

Speculation that the US, Japan and China could come together in an effort to keep a lid on prices meant that Brent crude dropped to 80.30 dollars a barrel at the close, from 81.58.

Housebuilders were among the day’s strongest performers as they were boosted by a stronger-than-expected showing from Crest Nicholson.

The FTSE 250 firm climbed higher after saying it will surpass earnings guidance, with its shares rising by 17.2p to 351.2p, and took competitors including Persimmon and Barratt on a similar upward trajectory.

Elsewhere in company news, Royal Mail hit the top of the FTSE 100 after it revealed it will hand out £400 million to shareholders following a bumper period for the company during the Covid-19 crisis when online deliveries soared.

Shares in the delivery giant leapt by 42.7p to 480.7p at the end of trading as revenues jumped from £5.7 billion to £6.1 billion and pre-tax profits rose from £17 million to £315 million in the six months to September 26.

Metro Bank dropped sharply in value after private equity giant Carlyle ended talks with the business over a potential takeover.

Naked Wines also saw shares slide after it said availability problems caused by supply chain pressures weighed on new customer growth. It closed 62p lower at 613p.

The biggest risers on the FTSE 100 were Royal Mail, up 42.7p at 480.7p, Persimmon, up 129p at 2,819p, Berkeley, up 166p at 4,462p, and Taylor Wimpey, up 5.75p at 158.65p.

The biggest fallers were Darktrace, down 25.5p at 524.5p, Fresnillo, down 35p at 951.8p, GlaxoSmithKline, down 47p at 1,512p, and Polymetal, down 45.5p at 1,471p.

That’s a wrap from us, please scroll through to see the news as it happened.

Unilever’s £3.8billion cuppa

Thursday 18 November 2021 17:06 , Simon Freeman

(PA) (PA Archive)
(PA) (PA Archive)

Unilever has agreed a deal to sell its tea business, which has brands included PG Tips and Lipton, to private equity firm CVC Partners for 4.5 billion euros (£3.8 billion).

The tea operation, known as Ekaterra, runs 34 brands and generated two billion euros (£1.7 billion) of revenues in 2020, Unilever said.

It comes almost two years after Unilever started the process of reviewing and spinning off the operation, which is the world’s largest tea manufacturer.

The acquisition is subject to regulatory approvals and is expected to complete in the second half of 2022.

Unilever boss Alan Jope said: “The evolution of our portfolio into higher growth spaces is an important part of our growth strategy for Unilever.

“Our decision to sell Ekaterra demonstrates further progress in delivering against our plans.

Pev Hooper, managing partner at CVC Capital Partners, said: “Ekaterra is a great business, built on strong foundations of leading brands and a purpose-driven approach to its products, people and communities.

Ceres CEO talks green investing

Thursday 18 November 2021 16:48 , Simon Freeman

 (Ceres Power)
(Ceres Power)

After almost 20 years on London’s junior AIM market, fuel cell pioneer Ceres Power is limbering up to join London’s main market.

The green energy group’ s £2.2 billion market cap - bigger than WH Smith and Aston Martin - would make it eligible to swiftly enter the mid-cap FTSE 250.

CEO Phil Caldwell tells us why he won’t join the traditional tech flight to the Nasdaq and offers tips on navigating the complicated, but red-hot market in future renewables technologies.

Its shares are up 30% in the past 12 months to 1170p.

Read more here

Cresting the wave

Thursday 18 November 2021 16:41 , Simon Freeman

Crest Nicholson is expecting profits for the past year to be ahead of forecasts after benefiting from the pandemic-boosted housing boom.

Shares in the company lifted after it said pre-tax profit for the year to October is due to be ahead of the consensus of £101.2 million.

Bosses at the FTSE 250 company cheered “robust” recent orders, as it revealed that prospective buyers had committed to 2,502 forward orders as of last week, ahead of 2,330 at the same point last year.

Chief executive Peter Truscott said the business had managed to implement its growth strategy as it navigated its way through supply chain and material availability issues.

Shares were up 5.3%.

Cresting the wave

Thursday 18 November 2021 16:41 , Simon Freeman

Crest Nicholson is expecting profits for the past year to be ahead of forecasts after benefiting from the pandemic-boosted housing boom.

Shares in the company lifted after it said pre-tax profit for the year to October is due to be ahead of the consensus of £101.2 million.

Bosses at the FTSE 250 company cheered “robust” recent orders, as it revealed that prospective buyers had committed to 2,502 forward orders as of last week, ahead of 2,330 at the same point last year.

Chief executive Peter Truscott said the business had managed to implement its growth strategy as it navigated its way through supply chain and material availability issues.

Shares were up 5.3%.

Not just a retail collaboration..

Thursday 18 November 2021 13:40 , Simon Freeman

Costa Coffee is to sell Marks & Spencer food from its 2500 UK outlets from next year.

Costa will sell more than 30 M&S Food products at its UK stores and drive-throughs outlets.

Neil Lake, Costa Coffee managing director for the UK and Ireland, said: “This collaboration with M&S Food will build on our existing food range and help us fulfil our ambition to become the first choice for customers buying food and coffee on the go.”

Shares in M&S have been on the rampage since a profits upgrade earlier this month and are up more than 70% so far this year.

Biffa biffed by driver drought

Thursday 18 November 2021 13:36 , Simon Freeman

Waste collection group Biffa’s shares are being dumped after a warning over driver shortages.

The firm, which collects waste for more than 30 councils across the country, said it had hiked pay to retain and recruit drivers after suffering disruption to its services from a shortfall in drivers of its rubbish trucks.

Biffa said it had been forced to temporarily halt some council rubbish services due to the driver issues, with the group also hit by vehicle, fuel and container shortages.

But it said it had “seen signs of stabilisation in recent weeks”.

It added it would be hiking prices for its services across the second half of its year to March as it faces pressure from rising costs due to the supply chain troubles.

The comments came as Biffa said first-half underlying earnings had nearly recovered to levels seen before the pandemic struck.

It reported adjusted operating profits of £45.4 million for the six months to September 24, down 0.7% on a two-year basis, while revenues lifted 2.5% versus 2019-20 with acquisitions stripped out.

Pre-tax losses narrowed to £25.6 million from £52.5 million a year ago.

But shares fell more than 10%

Babcock sell-off hits choppy waters

Thursday 18 November 2021 11:33 , Simon Freeman

 (Alamy)
(Alamy)

Defence giant Babcock’s drive to simplify its sprawling empire hit potential turbulence today as the City watchdog threatened to escalate a formal probe into the sale to CHC of its oil and gas helicopter operation.

The Competition and Markets Authority said CHC’s completed £10 million purchase of the Aberdeen-based unit could lead to higher prices for customers in the North Sea.

CHC has five days to address the findings before the deal is referred for an in-depth inquiry which could result in specific remedies being imposed, or even an outright prohibition of the merger.

Colin Raftery, CMA senior director, said: “While oil and gas exploration in the North Sea is expected to decline, these are safety-critical services on which customers spend hundreds of millions of pounds a year.”

CHC and Babcock are two of four helicopter operators working out of Aberdeen, along with Bristow and NHV, taking workers to and from rigs.

Raftery added: “Our investigation showed that CHC’s purchase of the Babcock Business would take out an important competitor.

“It is therefore important that this deal is subject to more detailed scrutiny if our concerns aren’t addressed.”

CHC said it is eager to integrate the Babcock business “at the appropriate” time and will work with the regulator to fix its concerns.

Naked Wines’ shares plunge as much as 21% as pandemic winner lowers sales guidance

Thursday 18 November 2021 10:48 , Naomi Ackerman

Doorstep delivery firm Naked Wines reported seeing growth slow as restrictions lifted this morning.

Shares in the AIM-listed merchant plunged as much as 21% in early trading after the company lowered full-year sales guidance from £355-£375 million to £340-£355 million, and said it is dialling back spending on acquiring new customers.

Naked also warned of lower repeat sales margins as it faces surging supply chain and storage costs.

Reported sales for the half year to September 27 were up just 1% on the first half of last year at £159.3 million.

The Standard caught up with firm CEO Nick Devlin, who stressed the company’s strong retention of the swathes of subscribed members signed up during lockdowns. Naked now has 947,000 members - up 25% on November 2020.

Read the full story here

Oil giants fall on China’s move to curb prices

Thursday 18 November 2021 10:40 , Graeme Evans

Brent crude dipped below $80 a barrel and shares in London's oil giants have fallen after China and the US launched an unprecedented joint effort to tame inflation.

Days after discussions between Xi Jinping and Joe Biden at a virtual summit, China signalled it planned to release oil from its strategic reserves in an effort to cool energy prices.

The move represents a win for the White House after it lobbied for major oil consuming nations to use some of their stockpiles in response to the failure of the Opec cartel and its allies to pump more crude.

Oil prices have jumped more than 50% this year, sending gasoline prices to near record levels in some parts of the US and also jeopardising the country's pandemic recovery after inflation this month spiked at 6.2%.

The pressure on the oil industry caused Brent crude to fall to a six-week low at below $80 a barrel, while shares in the oil giants BP and Royal Dutch Shell were 2% lower.

Their declines ensured the FTSE 100 index fell 6.83 points to 7284.31 as London continued its run of underperformance against markets in Europe, where the Cac40 and Dax have hit record highs despite fears over rising Covid-19 case numbers on the continent.

Housebuilders offered some support to the top flight after FTSE 250-listed firm Crest Nicholson said its profits will be “marginally” ahead of the £101.2 million forecast.

The latest positive update from the industry pushed Persimmon and Taylor Wimpey to the front of the blue-chip risers board, up 84p and 4.5p to 2774p and 157.4p respectively.

It was a mixed session for the FTSE 100-listed safety technology company Halma after it increased its interim dividend by another 7% to a record 7.35p a share.

The shares have risen 30% so far this year and initially added 1% to a new all-time high before succumbing to results-day profit taking to stand 2% or 71p cheaper at 3055p.

The 3% rise for Crest Nicholson made it one of the biggest risers in the FTSE 250 as the second tier easily outperformed the top flight by climbing 91.35 points to 23,525.12.

Sentiment also continued to improve towards Wagamama business Restaurant Group after its shares added another 6% or 5.1p to 93.4p.

National Grid profits soar

Thursday 18 November 2021 10:03 , Oscar Williams-Grut

Energy network operator National Grid has seen its half-year profits soar as it benefits from a new undersea cable from France delivering renewable electricity.

National Grid saw pre-tax profits jump 86% to £1 billion in the six months to 30 September. The figure was flattered by the £7.8 billion acquisition of Western Power Distribution. The deal closed earlier this year, meaning numbers were included in financial reports for the first time. Stripping out this impact, comparable profits still rose by 24%.

Chief executive John Pettigrew said the performance was driven by a “strong contribution” from a new interconnector to France that came online during the period.

Interconnectors are undersea cables that link Britain’s electricity network with neighboring countries, allowing them to deliver renewably generated electricity. National Grid recently completed work on another £620 million interconnector with Norway.

Profits were also boosted by a revival in demand for electricity and the fading impact of Covid-19.

Read the full story.

Posties to land £240 dividend from Royal Mail

Thursday 18 November 2021 09:57 , Simon English

Royal Mail revenues raced past £6 billion in the last six months as the online shopping boom continued to transform the formerly struggling business.

Lockdown was good for the Royal Mail, as posties became one of the heroes of the pandemic.

While the letters arm remains in structural decline – it is down 60% since 2004 – even that saw some resurgence as families unable to see each other sought other ways to stay in touch.

Royal Mail is paying a divi of 6.7p a share and another £200 million special dividend. There’s also a £200 million buyback to please investors.

The dividend payments are worth £240 to staff if they hold on to the 913 shares they got when the company went public. They will get the cheque on January 12.

read more here

Metro Bank sinks as Carlyle walks away from bid

Thursday 18 November 2021 09:43 , Oscar Williams-Grut

Shares in troubled lender Metro Bank have sunk after private equity company Carlyle pulled out of takeover talks.

Carlyle said in a brief statement that it had pulled the plug on talks that began at the start of the month. Metro Bank said it “continues to strongly believe in the standalone strategy and future prospects of Metro Bank.”

Shares are down 23.7p, or 17.9%, at 108.6p.

Ian Gordon at Investec says: “We are not unduly surprised. We see the main obstacle to a viable transaction as Metro’s high fixed cost base, largely a function of expensive long leases on its network of 78 stores which suggests (to us) limited strategic flexibility for Metro either on a standalone basis, or in the hands of any would-be third party acquire.”

Eddie Jordan considers counterbid for Playtech

Thursday 18 November 2021 09:38 , Oscar Williams-Grut

The takeover battle for online gambling software company Playtech has taken another surprise turn after it emerged that Eddie Jordan is mulling a bid.

Jordan, the Irish tycoon who made his name with Formula 1, said in a brief statement that a consortium led by himself and gambling industry veteran Keith O’Loughlin were “evaluating making a competing offer” for Playtech.

Playtech said Jordan and O’Loughlin had lined up potential financing from New York leveraged buyout firm Centerbridge Partners. The pair are currently doing due diligence on Playtech. Talks are at an “early stage and ongoing.”

Shares in Playtech rose 21.8p, 2.9%, to 762.8p.

Read the full story.

LondonMetric Property eyes warehouse shopping spree

Thursday 18 November 2021 09:19 , Joanna Bourke

Warehouses landlord LondonMetric Property has outlined plans to raise £175 million to fund a shopping spree, a move that would help it capitalise on strong demand for space.

The FTSE 250 firm, which plans to raise the money via a share placing and retail offer, gave the update as chief executive Andrew Jones predicted high business need for storage and distribution properties would last beyond the pandemic.

The group intends to use the raise to “fund a programme of acquisitions and developments that are either committed or under offer”.

Read more HERE.

Crest Nicholson profits to come in ahead of City expectations

Thursday 18 November 2021 08:32 , Joanna Bourke

FTSE 250 housebuilder Crest Nicholson has cheered “robust” sales rates, as high demand for properties seen during the pandemic looks to remain in place.

Numerous builders have benefited from people reassessing housing needs during lockdowns, with many seeking more space for home working.

In the year to October 2021 Crest Nicholson’s pre-tax profits will be “marginally” ahead of the £101.2 million analysts had expected.

Shares in the firm gained 8.8p to 342.8p.

Read more HERE.

Royal Mail shares surge, oil majors lower

Thursday 18 November 2021 08:27 , Graeme Evans

The FTSE 100 index is 22.38 points lower at 7269.66, driven by falls of almost 2% for BP and Royal Dutch Shell.

Their weakness reflects a decline in oil prices after the Biden administration reportedly called for major oil consuming nations to release some of their strategic reserves.

Royal Mail shares surged 5%, up 20.7p to 458.7p, after its half-year results included a £200 million special dividend as part of plans to return £400 million to shareholders.

There was also a rise of 24p to 3150p for FTSE 100-listed safety technology company Halma as it increased its interim dividend by another 7% to a record 7.35p a share.

Outside the top flight, shares in engineeing firm Rotork fell 9% after it highlighted supply chain difficulties and Metro Bank slumped 21% as it emerged that private equity firm Carlyle had ended its takeover interest.

Stockpile release plan sends oil lower

Thursday 18 November 2021 07:46 , Graeme Evans

Brent crude is below $80 a barrel for the first time in six weeks, driven lower by reports that major oil consuming nations are planning to release some of their strategic reserves.

The Reuters news agency said the Biden administration had asked China, Japan and other big crude consumers about a coordinated release of stockpiles in an effort to lower energy prices.

The move comes amid a backlash over American pump prices and other inflationary pressures, factors which have led to fears about a potential brake on the US economic recovery.

Brent crude futures fell another 0.7% this morning to $79.77 a barrel, while West Texas Intermediate crude has now dipped 5% in the past two days to below $77 a barrel.

There's been no respite for European natural gas prices, however, after the German regulator’s decision to temporarily suspend certification for Nord Stream 2 added to fears that Europe will face supply issues over the winter.

One other factor putting downward pressure on the oil price has been the latest surge in Covid-19 cases in Europe, with German chancellor Angela Merkel warning her country is in the grip of a “dramatic” fourth wave.

This latest threat to the economic recovery is likely to contribute to a subdued session for European markets, with the FTSE 100 index expected to continue this week’s lacklustre performance by falling six points to 7285.

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