Daily Business Live
AG Barr invests; Royal Mail divi; Wetherspoon pledge
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4.30pm: London close
Following a mid-afternoon slump the FTSE 100 closed in positive territory, up 35.95 points at 6,772.12+35.95.
Cairn Energy closed just 2.4p lower at 171.5p, despite the Indian government appealing against a tax case order.
IAG, owner of British Airways, topped the risers, up 5.1% to 202p on hopes of travel opening up.
Financials were also in demand with Barclays, NatWest, Legal & General and HSBC in favour.
Commodities stock Evraz made good ground, up 11.8p to 573.1p on a report that it will be among the big dividend payers (see below).
Wall Street’s main indexes slipped as investors pulled out of heavyweight tech-related stocks and flocked to undervalued banks and industrial stocks amid a rise in U.S. bond yields.
Noon: Nucleus takeover delay
Nucleus Financial, the Edinburgh-based wrap platform, has agreed to change the terms of its £144.6 million acquisition by James Hay amid some disquiet over the deal.
9am: Dividends return
The FTSE 100 is set to deliver its first year of dividend growth since 2018 this year, with a £74.3 billion payout enough to equate to a yield of 3.8%, says Russ Mould, investment director at AJ Bell.
“That compares to a payout of £61.4bn for last year which, if confirmed by company announcements, would be the lowest figure for the FTSE 100 since 2013.
“Total payments peaked at £85.2bn in 2018 and even 2022 is not expected to return to that level as corporate profits, cash flows and confidence look to recover from the effects of the pandemic.”
Six firms are forecast to offer a yield of more than 8% and two – Evraz and Rio Tinto – more than 10%.
8.30am: London edges higher
London stocks rose in early trade as investors looked beyond the Archegos Capital collapse (see below). The FTSE 100 was up 0.7% at 6,782.94.
Legal & General Group, up 2.43% at 282.50p, and HSBC 2.27% higher at 427.60p topped the blue chip risers.
Cairn Energy was largely unmoved despite announcing that the Indian government is appealing a tax ruling.
AG Barr shares fell 2% after it reported a fall in profit (see below).
7am: AG Barr invests
Irn-Bru maker AG Barr is to invest its way out of the pandemic which caused a slump in full-year profit.
The Cumbernauld company said pre-exceptional profit before tax fell 12.3% to £32.8m for the year to 24 January 2021 from £37.4m a year earlier.
Statutory profit fell 30.5% to £26m compared with £37.4m a year earlier.
It said it would resume dividend payments this year and that it ended the financial year with a stronger balance sheet than previous year, with £50m net cash at bank (2019/20: £10.9m). Revenues dropped 11% to £227m.
Roger White, chief executive, said: “We closed the year in strong financial health, with our brands and business poised for growth on a like for like basis, and with the clear intention to recommence dividend payments in 2021.
“Whilst there now appears to be a route out of lockdown, the immediate future remains uncertain. Notwithstanding this current backdrop, our strategy for the year ahead is to support our core growth initiatives with significant investment.
“We have exciting plans to deliver across the Group and are confident of continuing to make further progress in the coming year.”
7am: Wetherspoon invests in pubs
Pubs chain Wetherspoon said it anticipates investing £750 million to open 15 new pubs and enlarging 50 existing pubs each year for 10 years, creating 20,000 jobs.
Founder and chairman Tim Martin said: “Our immediate investment will provide work for architects, contractors and builders as well as result in 2,000 new jobs for staff in our pubs.
“We are geared up to start on the first projects within a few months.
“We are also committed to our long-term investment and job creation programme over the next decade.
“However, the investment is conditional on the UK opening back up again on a long-term basis, with no further lockdowns or the constant changing of rules.”
7am: Confidence rises
Business confidence in Scotland rose 15 points during March to -2%, the highest reading since March 2020, according to the latest Business Barometer from Bank of Scotland Commercial Banking.
The data has been released just a week after the one-year anniversary of the first COVID-19 lockdown.
7am: Cairn Energy India update
Cairn Energy said it has received notice that the Government of India has petitioned the Dutch Court of Appeal to set aside the arbitration award in favour of the Edinburgh company on 21 December 2020.
7am: Royal Mail
Royal Mail said it will pay dividend and that trading has been broadly in line with the update published on 10 March.
Group adjusted operating profit for FY2020-21 is still expected to be around £700 million.
Martin Seidenberg (CEO GLS) and Thorsten Pruin (CFO GLS), will provide a business update at 14:30 BST today, outlining medium term targets for the GLS business.
This includes a focus on International and B2C as key growth opportunities, leveraging the strength of the GLS network and business model.
The board will propose a one-off final dividend of 10p per share in respect of FY2020-21, payable on 6 September. It expects to announce a new dividend policy with full year results on 20 May.
6am: Nucleus vote
Shareholders in Edinburgh-based Nucleus Financial are due to vote today on the takeover of the company by James Hay.
5am: Archegos forces losses
Shares in Credit Suisse closed deep in the red, down over 13%. US-listed shares in Nomura were also under heavy pressure, down 13.5%, after it warned it faces a ‘significant’ loss from US hedge fund Archegos Capital defaulting on margin calls.
Financial regulators across the world are monitoring the collapse of the New York-based billionaire Bill Hwang’s personal hedge fund, which left some of the world’s biggest investment banks nursing billions of dollars of losses.
The US Securities and Exchange Commission said it had been “monitoring the situation and communicating with market participants since last week” as panic spreads about the possible scale of the fallout.
A margin call is when a bank asks a client, in this case the hedge fund, to put up more money or collateral if stocks and assets they have bought on a margin – with borrowed money – have fallen sharply in value.
If the client cannot afford to do that, the bank will sell the shares and assets owned by the client in a bid to recoup what it is owed, which is what Credit Suisse and Nomura are attempting to do.
Wall Street pared earlier losses driven by the banking sector on fears that issues with a defaulting hedge fund could spread throughout the banking sector.
Crude prices inched up on a report that Russia would back broadly stable oil output when the Organisation of the Petroleum Exporting Countries and allies meet this week.
On Wall Street, the Dow Jones Industrial Average rose 0.3%, the S&P 500 lost 0.09% and the Nasdaq Composite dropped 0.6%.