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Ukraine talks lift market | Bellway divi | Mulberry upgrade
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5pm: Talks lift market
London’s blue chip FTSE 100 index closed 64.11 points or 0.86% higher at 7,537.25 after encouraging signs from Istanbul between Russian and Ukrainian negotiators.
In Paris the CAC 40 stock index closed up 3.1%, while the DAX 40 in Frankfurt ended up 2.8%.
The lockdown in China impacted oil prices. Brent crude was quoted at $109.35 a barrel at the equities close, down sharply from $111.48 at the close Monday.
Oil majors BP and Shell ended down 2.5% and 1.9% respectively, tracking spot oil prices lower.
Bellway closed down 3.9% after the housebuilder warned of a potentially chunkier provisions for flammable cladding than initially expected, as it reported interim results (see below).
Online grocer Ocado Group ended up 6.8% despite numbers from Kantar showing its sales and market share fell in the 12 weeks to March.
11am: Nucleus sale
Nucleus, the Scottish financial planning platform, has been sold again, just months after it was acquired by James Hay.
10am: Ukraine talks lift market
Following yesterday’s dip over China lockdown concerns the FTSE 100 sprang back to its feet on hopes that the latest round of peace talks between Moscow and Kyiv might yield tangible progress, says AJ Bell investment director Russ Mould.
“Suggestions the Russian side are softening some of their previous demands raised spirits, but the market is unlikely to take anything for granted when it comes to the machinations of Vladimir Putin,” he said.
“The FTSE 100 has proved to be better placed than most thanks to relatively cheap valuations, strong income credentials and exposure to surging commodity markets, however it is not immune to the current pressures.
“The next big economic announcement to watch is the US jobs release on Friday which may have some impact on expectations around the pace of rate hikes in the world’s largest economy.”
The FTSE 100 was trading 68 points higher at 7,540.91.
Soft drinks firm AG Barr traded 16p (3.01%) higher after full-year sales and profit are now ahead of pre-Covid days, and it is once again paying out more generous dividends.
On AIM, shares in Scotch Malt Whisky Society owner Artisanal Spirits Company were 5p (6.67%) higher at 80p following positive maiden results.
7am: Artisanal Spirits Company
Artisanal Spirits Company, owner of the Scotch Malt Whisky Society, has posted a sharp rise in revenue and says it is on track to double income by 2024.
The premium direct-to-consumer seller posted a 27% increase in gross profit to £11.2m (2020: £8.8m) for the year to the end of December on a 21% rise in revenue to £18.2m (2020: £15m), comfortably ahead of market expectations.
The housebuilder said it had a substantial order book, strong land bank, and significant balance sheet capacity that supports its growth strategy and medium-term target to deliver annual output of around 12,200 homes in the 2023 financial year.
Underlying profit before taxation rose by 8.9% to £327.2 million (2021: £300.5m, 2020 – £291.8m)
The interim dividend has been increased to 45.0p per share (2021 – 35.0p, 2020 – nil), a rise of 28.6% and the Board anticipates that the dividend cover will be 3 times underlying earnings for the full financial year.
The board intends to reduce dividend cover to around 2.5 times underlying earnings by 31 July 2024, which it believes is a prudent and sustainable level, supported by strong investment returns and enhanced cash generation, arising in part, from increased investment in land over the past 18 months.
It says volume growth and higher expected shareholder returns can be achieved, notwithstanding the future increase in corporation tax rates.
7am: AG Barr
Drinks maker AG Barr posted strong sales growth in the 53 weeks ended 30 January, resulting in a profit performance ahead of 2019/20 pre-Covid levels.
It reported strong momentum across the soft drinks portfolio supported by continued brand investment and innovation, with a particular focus on the energy category.
7am: Mulberry Group
Luxury accessories brand Mulberry Group said the robust sales trend in the first half has continued throughout the second half, which will result in group revenue for FY22 being moderately ahead of current expectations. Gross margins have been maintained.
Mulberry has taken this opportunity to increase its marketing investment to further build global brand awareness. Despite this additional expenditure, the profit for FY22 will be moderately ahead of current expectations.
The group’s balance sheet remains strong with net cash balances at FY22 expected to be in excess of £20 million. The group intends to announce its FY22 results on 29 June.
Oil prices fell yesterday on expectations of weaker fuel demand in China after Shanghai was locked down to curb a surge in Covid-19 infections.
Brent crude was trading at $111 having hit a 14-year high of $139 after Russia invaded Ukraine.
Despite yesterday’s slide, the Bank of England governor Andrew Bailey warned that the hit to living standards from surging energy prices will be worse than in any year in the 1970s.
Peace talks in Ukraine helped sentiment on Wall Street. Tech stocks led the way higher as bond yields softened, with the Nasdaq index rising 1.3%, the S&P 500 up 0.7% and the Dow Jones 0.2% higher.