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Virgin Money margins rise | AG Barr at pre-Covid level

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5pm: Tech and miners make gains

Edinburgh-managed Scottish Mortgage Investment Trust, which has stakes in tech-led companies such as Tesla, Nvidia and Amazon, ended the session as the second best performer on the FTSE 100, up 3.6%.

It was tracking a revitalised Nasdaq Composite index, although it was off 0.2% in mid-session following a strong performance yesterday.

The FTSE 100 index closed up 71.41 points, or 1%, at 7,535.78 with miners performing strongly. Rio, Glencore and Anglo were up 3.2%, 3.4% and 3.2% respectively.

Brent oil was quoted at $89.50 a barrel at the London close, down sharply from $91.12 at the close Monday, ahead of the 25th OPEC and non-OPEC Ministerial Meeting on Wednesday.


12.15pm: Big Four payout

Accountancy and audit group KPMG, which has been the focus of a number of scandals, is paying its 600 partners an average bonus of £688,000 this year – their biggest payday since 2014.

Full story here


9.30am: Tech and miners lift FTSE 100

AJ Bell investment director Russ Mould said investors are hoping February will bring a more positive outlook for global markets.

“Unsurprisingly tech-focused investment trust Scottish Mortgage was the top gainer in early trade. Miners were also higher.

Virgin Money provided some encouragement for the banking space as it lifted its outlook for margins. A boost to profitability for the banks is widely expected as central banks hike interest rates.

“Irn-Bru maker AG Barr fizzed higher as it lifted profit forecasts – soft drinks firms should benefit from a lifting of Covid restrictions as more people buy cans on the go and people look for non-alcoholic options when eating out and socialising.

“The housing market continues to defy gravity for now – with the latest Nationwide figures, somewhat remarkably, showing the best start to a year since 2005.”

John Moore, senior investment manager at Brewin Dolphin, said the update from AG Barr underlines the strength of its business, with revenues ahead of revised guidance and beyond even pre-pandemic levels.

“You wouldn’t rule out further earnings-enhancing investments in other businesses to complement the recent equity stake in MOMA,” he said.

The FTSE 100 was 50 points higher at 7,513.86.


7am: Virgin Money

Virgin Money

Virgin Money said business lending declined 2.2% in Q1 as anticipated in line with a fall in Government-supported schemes, a seasonal contraction in working capital demand from farming customers, and generally subdued market activity which is expected to improve later in the year in line with the broader economic recovery and improved business confidence. 

Mortgage balances also reduced in Q1 by 0.5% reflecting lower market demand post-SDLT changes and a continuing competitive environment.

Chief executive David Duffy said: “Virgin Money’s performance in the first quarter has been strong. Our balance sheet is performing well, asset quality remains robust and we have increased guidance on net interest margin for 2022. We are optimistic about the pace of recovery of the UK economy based on growing consumer and business confidence, underpinned by lower unemployment.”


7am: AG Barr ahead of pre-Covid trading

Irn-Bru

Irn-Bru manufacturer AG Barr said revenue for the year to the end of January is expected to rise 17.5% to c.£267m, compared to the prior year (2020/21: £227m). 

This is marginally ahead of the revised guidance issued in November and exceeds the pre-pandemic revenue performance of 2019/20 (£255.7m) which also included c.£21m of Rockstar brand revenue.

The company said the strong trading performance was achieved despite the unexpected and increased UK Government restrictions related to the Omicron Covid variant

Roger White, chief executive, said: “We are delighted with both the resilience our business has demonstrated and the growth we have delivered. 

“We have remained fully operational throughout the year, producing high quality products and providing strong business support to all of our customers. 

“We have delivered an excellent financial performance against a volatile backdrop, whilst at the same time delivering on our strategic priorities, with particularly encouraging progress made across our No Time To Waste environmental sustainability programme. 

“We plan to further invest in our business in 2022/23 and remain confident in our ability to deliver continued growth in both revenue and profit in the coming year.”


7am: Parkmead acquires wind farm

Parkmead, the independent energy group, has acquired Kempstone Hill Wind Energy, a company owning a 1.5MW onshore wind farm in Scotland.

The £3.29 million cash deal will see Parkmead assume a project loan of approximately £990,000.

Full story here


Global markets

London was expected to being the new month strongly as the markets price in an interest rate rise on Thursday and a big jump on Wall Street.

The tech-focused Nasdaq leapt 3.4%, overshadowing a 1.9% gain for the S&P 500 and a rise of 1.2% for the Dow Jones.

Despite yesterday’s performance, the Nasdaq suffered its biggest monthly loss since the pandemic-induced panic in March 2020, while European stocks posted their worst month since October 2020.

In Tokyo, the Nikkei 225 closed up 0.3%, S&P/ASX 200 in Sydney added 0.5%. Financial markets are closed in Hong Kong and Shanghai for Lunar New Year.

Oil prices hovered near seven-year highs on expectations that a limited production increase by major oil producers and a solid post-pandemic recovery in fuel demand will keep a tight supply condition.

Brent crude for April delivery was up 34 cents, or 0.4% at $89.60 a barrel at 0455 GMT.

Tensions between Russia and the West have underpinned crude prices. Russia, the world’s second-largest oil producer, and the West have been at loggerheads over Ukraine, fanning fears that energy supplies to Europe could be disrupted.



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