Daily Business Live
STV ads improve; Shell strong start; car output rises
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4.30pm: FTSE 100 fails to hold above 7000
The FTSE 100 broke through 7000 at the open and stayed above that level until mid-afternoon, closing at 6,961.48, down 2.19 points.
Asia-focused bank Standard Chartered ended the best performer, up 5.6% after reporting a “strong” start to 2021, with a sharp drop in credit impairments and a record quarter from its wealth management arm giving the bank confidence for the rest of 2021.
Smith & Nephew was the second-best performer, up 5.6%, after the medical devices maker said it saw double-digit first quarter revenue growth.
BT Group closed up 2.5% after confirming it is in discussions that may lead the sale of all or part of its sports broadcasting arm (see below).
Flutter Entertainment, owner of Paddy Power Betfair, ended 2.7% lower after a “strong start” for 2021, but said no decision had been taken on whether to list part of fantasy sports business FanDuel.
Flutter is in an arbitration dispute with Fox Corp over the value of Fox’s option to buy a stake in FanDuel.
9am: FTSE 100 back above 7000
The FTSE 100 edged back above the 7,000-mark, up 45.22 points (0.65%) to trade at 7,008.89, after the US Federal Reserve maintained a steady position on monetary policy in light of the recent improvement in US economic data.
Smith+Nephew (+4.6%) and Unilever (+3.5%) led the upward movement, while NatWest led the fallers with a 2.5% decline, though this was probably driven more by profit-taking as the figures were largely positive. The market consensus on the shares is a strong hold.
WH Smith slipped 4.6% after it warned of the possible risk of breaching its covenant tests in 2022 and launched a potential £325 million bonds offering as the retailer navigates the COVID-19 pandemic.
8.05am: BT in talks over broadcasting
BT responded to a report that it is considering the sale of BT Sport by confirming that it is in early discussions with a “number of select strategic partners”, to explore ways to generate investment, strengthen its sports business, and help take it to the next stage in its growth.
“The discussions are confidential and may or may not lead to an outcome,” it said.
7am: NatWest (RBS)
NatWest, trading as RBS in Scotland, said attributable profit in the first quarter more than doubled (+115%) from £288m to £620m.
Operating profit before tax rose 82% from £519m to £946m.
Digitally active customers are up 1% to 9.5m and 9% on FY ’19 across retail and business banking.
7am: STV ad outlook improves
Ahead of its AGM today STV Group said advertising trends continue to improve, with STV’s January-April total advertising revenue 10% ahead of previous guidance of 7-9% growth.
STV-controlled advertising continues to outperform the wider market, with regional advertising revenues up 12% in the first four months of the year.
Video on Demand advertising on the STV Player continues to see strong growth, up 26% across January-April, and has delivered eight consecutive months of growth since August 2020.
Baroness Margaret Ford will step down as chairman at today’s AGM after eight years and will be replaced by Paul Reynolds.
Simon Pitts, chief executive, said: “It’s still relatively early days in the economic recovery but I’m encouraged by the strong start we’ve made to 2021, with advertising for the first five months of the year expected to return to 2019 levels and our excellent digital and production growth continuing.
“We’re setting more viewing records on screen and online, with TV viewing up 12% and STV Player viewing up 73% in Q1, the fastest growth of any UK broadcaster.
“We have more to look forward to in 2021, with STV Studios on track to deliver its most successful year yet following a record 19 new commissions last year, as well as the exciting prospect of the delayed Euro 2020 football championships, with over 20 games live and exclusive on STV including both Scotland and England.”
Royal Dutch Shell chief executive Ben van Beurden said: “Shell has made a strong start to 2021, generating over $8 billion of cash in the quarter.
“As previously announced, the first quarter 2021 dividend per share has been increased by around 4%, in line with our progressive dividend policy.
“We have reduced net debt by more than $4 billion this quarter, progressing towards the $65 billion milestone to increase shareholder distributions. Our competitive and robust financial performance provides the platform to achieve the goals of our Powering Progress strategy.”
The board announced an interim dividend of $0.1735 per A ordinary share and B ordinary share.
7am: Weir orders rise
Weir Group reported an 11% increase in orders from continuing operations in the first quarter.
Chief executive Jon Stanton said: “The group has had a good start to the year against the backdrop of ongoing Covid challenges.
“As expected, conditions continued to improve in both mining and infrastructure markets reflecting increasing customer confidence in a broad-based economic recovery and near record prices for commodities essential to growth and carbon transition.
“This was reflected in continued positive development in our project pipeline and improving order conversion of our early cycle product lines and technologies that deliver significant sustainability benefits.
“Looking to the full year, we continue to expect to deliver growth in full year constant currency profits in line with current market expectations.”
6.40am: Car production rises
The number of cars built in Britain rose last month for the first time since the summer of 2019.
The Society of Motor Manufacturers & Traders said 115,498 cars were built in March, 46% more than the same month a year ago.
It said exports to the EU, US and Asia were up by 34%, 36% and 54% respectively. The EU remained the biggest market, with just over half of all exported cars heading to the bloc.
Combined output of battery electric, plug-in hybrid and hybrid vehicles amounted to a fifth of all cars built last month, 13.7% higher on last year.
6am: Valneva listing
Valneva, which is developing a vaccine for Covid-19 in Livingston, is seeking to list its shares on the Nasdaq Global Market.
The company is already listed on Euronext in Paris and intends to raise approximately $300 million to fund further development of vaccines.
Facebook and Apple rise amid ad issues
Facebook‘s results beat expectations but were overshadowed by forecasts of a slowing in growth because of Apple’s new privacy policies.
The social network said total revenue, which is primarily driven by advertising, was up 48% to $26.17bn (£18.7bn) in the first quarter, with ad revenue growth driven by a 30% year-on-year rise in the average price per ad.
But it admitted said Apple’s new privacy policies will make it more difficult to target adverts in future.
The policies will require iPhone app developers to ask users for permission to collect certain data for adverts, a move that Facebook said will harm its business and hurt smaller companies that rely on personalised advertising.
Facebook’s monthly active user count rose 10% to 2.85 billion and net income for the first quarter was $9.5bn (£6.8bn) – compared with $4.9bn (£3.5bn) a year earlier.
Apple posted second-quarter profits of $89.6bn (£64.2bn), helped by a growth in iPhone sales.
But a global chip shortage is expected to hit Macs and iPads, costing the company billions in revenue.
Apple chief executive Tim Cook said a hit to sales has so far been avoided with the help of supply buffers.
However, chief financial officer Luca Maestri said constraints due to the shortage could cost the company between $3bn (£2.1bn) and $4bn (£2.8bn) in revenue in the fiscal third quarter.
All three major US equity benchmarks finished in the red despite robust corporate results and Federal Reserve chairman Jerome Powell easing worries about earlier-than-expected tightening of monetary policy.
At the close, the Dow Jones Industrial Average was down 0.48%, while the S&P 500 lost 0.09% and the Nasdaq Composite fell 0.28%.