Daily Business Live
Skipton CEO quits | ‘Strong’ Computacenter | LendInvest AUM
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5pm: Markets plunge
Tensions over potential conflict Ukraine wiped billions off the stock market today as the FTSE 100 fell 196.98 points (2.63%) to 7,297.15.
10am: Purchasing managers index
The January flash composite purchasing managers’ index (PMI), an early read on economic growth, came in at 53.4 – slightly lower than consensus expectations of 54.8, and down from 53.6 in December.
The reading for the services sector was 53.3 (versus consensus expectation of 54.0, and December’s reading of 53.6), while manufacturing was 56.9 (also lower than expectation of 57.9, and December’s 57.9).
Daniel Casali, chief investment strategist at Tilney Smith & Williamson, says that despite the slight undershoot compared to expectations, the readings should not be a cause for pessimism over the UK economy.
“Much of the concerns about long-lasting damage to the UK economy from covid appears to be misplaced,” he said.
“Employment and GDP are now higher than the pre-pandemic February 2020 level. Moreover, GDP recovered all the lost output over the past two years far quicker than the five years it took after the previous recession during the global financial crisis in 2008.”
9am: FTSE 100 wobbles
Leading shares were beginning to wobble after a steady start. The FTSE 100 was trading down 55 points at 7,439.22.
AJ Bell investment director Russ Mould said the index gave back its year-to-date gains last week and globally the picture has been significantly worse, with the technology sector decidedly out of favour.
“The Federal Reserve is meeting on Wednesday amid expectations of a first interest rate hike in March and more increases to come this year than had previously been pencilled in. This has been signalled by a rise in bond yields.”
7am: Skipton Building Society CEO departing
Skipton Building Society is seeking a new CEO after announcing that David Cutter is stepping down as CEO after 13 years in the post and 28 years with the business. He will leave after the AGM in April.
The society said it had seen considerable progress in a year which included the acquisition of Countrywide by Connells, creating the UK’s largest estate agency network.
Robert East, chairman, said: “David has made an outstanding contribution as group chief executive. He has led the society out of the challenges of the global financial crisis, through Covid and the transformative acquisition of Countrywide Plc by Connells to the robust financial health we enjoy today.
“The growth in membership, savings balances and mortgage lending through David’s tenure show his focus and dedication to serving and delivering for our members.”
7am: Strong year for Computacenter
Computacenter said it finished the year with a strong fourth quarter, ahead of our expectations and believes adjusted profit before tax for the year will be slightly in excess of £250 million. The group is expected to deliver its 17th year of uninterrupted earnings per share growth in spite of head winds from a strong pound and product supply shortages.
Total revenue grew by 23% including the effects of acquisitions made since the beginning of 2020, and by 27% in constant currency.
“During the year we experienced the highest growth in services revenue for the last 20 years, coupled with continued strength from technology Sourcing product sales which was more broadly based in 2021 than the previous year,” it said in an update.
The product order backlog is at an all-time high and considerably larger than a year ago. This is due to two factors, product supply constraint meaning customers are ordering earlier but there is also a significant underlying strength to the market.
“While as always there is much to do, we enter 2022 growing in multiple geographies, across product and services, which means we feel the business is well placed for another year of progress.”
Final results for the year ended 31 December will be published on 16 March.
7am: LendInvest ready for home market
LendInvest, the property finance company, said it has reached £2 billion assets under management two and half years after achieving £1bn in ten years.
The company, which floated last July, said it is on track for its eighth consecutive year of profitable growth from operations and remains poised to capture an increasing share of the property finance market as it enters the specialist homeowner segment in the next financial year.
Rod Lockhart, chief executive said: “The traditional mortgage application process is lengthy and reliant on rigid paper based processes. We’re changing that and bringing simple, cloud-based property finance solutions to more investors and borrowers across the UK via our platform.”
In December, the company announced that in the half-year ended 30 September 2021, platform revenue increased 28% to £72.4 million, gross profit increased 51% to £26.5m and EBITDA increased 179% to £13.4m.
Trading patterns in the next few days will be dictated by worries about conflict in Ukraine and the implications for the gas market, as well as expectations of an interest rate hike in the US on Wednesday when the US Federal Reserve issues an update.
Years of near-zero interest rates and quantitative easing are being replaced by tougher monetary policy as US inflation climbed to 7% in December, the fastest rate of price rises in 40 years. The Bank of England could impose a further increase next week.
The macro agenda is likely to overshadow a busy week of updates from companies including Diageo, Pets At Home and Dr Martens in London and Apple, Microsoft and Tesla in the US.
Public sector net borrowing numbers tomorrow will indicate how much wriggle room Chancellor Rishi Sunak has to help householders cope with rising energy bills.
The UK borrowed £17.4bn in November, down £22.2bn a year earlier and forecasts for December are for a rise closer to £19bn.