Market report

McColl’s CEO quits | Next war hit | Lloyd’s exposure | Beeks deal


5pm: London steady on Ukraine talks

Markets were focused on the talks in Brussels and London had a quieter session, the FTSE 100 closing just 6.75 points up at 7,467.38.

Craig Erlam, senior market analyst at Oanda said: “The recovery has arguably been overdone considering the invasion of Ukraine is ongoing and commodity prices are at sky-high levels and still prone to surges.

“But the fact that Ukraine and Russia remain in negotiations seems to be enough to keep investors on board.”

Brent oil was quoted at $118.85 a barrel at the London equities close Thursday, down from $121.99 late Wednesday.

Shares in AIM-quoted Beeks Financial Cloud surged 12.3% (18p) to 164.5p following its latest contract win.

9.30am: Oil lifts London shares

Brent Crude oil at $122 per barrel is going to be a tough one for businesses to stomach as energy costs go through the roof, says Russ Mould, investment director at AJ Bell.

However, he adds: “It isn’t all bad news as a higher oil price is good for BP and Shell on the UK stock market, thereby giving a lift to the FTSE 100 index, up 0.2% to 7,478.

“Investors appear to be in defensive mood judging by the other stocks dominating the list of FTSE 100 risers. Utilities, precious metal miners and tobacco manufacturers were bid up, with more cyclical stocks in the form of industrial miners, financials and media among the biggest fallers.”

On figures from retailer Next, Mould says that tor a company that has a habit of under-promising and over-delivering, the market has shown disappointment at its downgraded sales guidance for its current financial year.

“It’s not to say the retailer is set to have a bad session; far from it. Yet Next is perhaps a victim of its own success where everyone expects it to be firing on all cylinders all the time.

“Next is a leader in the retail space and you can be sure that whatever it is doing, others will follow. It remains one step ahead of the game.”

On AIM, Glasgow-based Beeks Financial Cloud rose 6.50p (4.44%) to 153p following its latest contract announcement (see below).

7am: McColl’s CEO quits


McColl’s Retail Group has announced that Jonathan Miller has stepped down from his role as chief executive and from the board.

The search to appoint a new CEO is in progress and the board is confident of concluding that search in the near future.

Angus Porter, currently non-executive chairman of the group, has assumed the role of executive chairman on a temporary basis.

Karen Bird, chief operating officer, has become interim chief executive to manage day-to-day executive responsibilities. Giles David, chief financial officer, will also assume additional responsibilities.

The group said it remains in ongoing dialogue with its lenders towards a longer-term agreement in relation to the balance of its existing facility and continues to believe that a financing solution will be found that involves its existing partners and stakeholders.

7am: Next expects war hit

Retailer Next has lowered its sales guidance for 2022/23 by £85m (-2.0%) and profit guidance by £10m (-1.2%) to take account of closing its Russia and Ukraine websites.

It said an improved outlook for UK retail sales has mitigated the anticipated loss of lower margin sales overseas and the associated cost of increased markdown.

The forecasts accompanied annual figures to the end of January showing profit before tax of £823m, up 10% against 2019/20 (and 140% up on 2020/21) on brand full price sales up 12.8% on 2019/20 (and 32.4% against 2020/21).

In a statement with the figures the company said: “The buoyancy of our sales last year, along with the benign economic environment that accompanied it, make comparatives in the year ahead challenging. Last year’s strength contrasts with this year’s unusually high level of geopolitical and economic uncertainty. The combination of these factors make accurate guidance particularly difficult.”

On sales trends, it said it was seeing consumers revert to more formal wear as they returned to the office.

“So far this year, UK sales are ahead of where we expected them to be, mainly driven by better than anticipated sales in our retail stores.

“We are also seeing a very sharp reversal of lockdown fashion trends, with a return to more formal dressing and notable reduction in spending on Home and very casual clothing.”

Its central scenario for the year ahead is that full price sales will increase by +5.0% and that group profits will increase by +3.3% to £850m.

7am: Lloyd’s of London exposure

Insurance syndicate Lloyd’s of London faces major claims this year from the conflict in Ukraine, but this will not create solvency difficulties, it said.

Lloyd’s is talking to its market partners to understand their exposure related to the conflict.

The aviation insurance market is seen as particularly exposed to the impact of Russia’s invasion of Ukraine and subsequent sanctions by Western governments.

Global leasing companies are staring at an imminent sanctions deadline to repossess more than 400 jets worth almost $10 billion from Russian airlines, as experts warn legal wrangling between airlines, lessors and insurers could last a decade.

Lloyd’s said business underwritten in Ukraine, Russia and Belarus currently accounted for less than 1% of the market’s total business.

It was hit badly by the COVID-19 pandemic in 2020 but recovered ground last year after raising premium rates and excluding the virus from insurance policies.

Lloyd’s posted a 2021 pre-tax profit of £2.3 billion, following a £900m loss in 2020.

7am: Iomart cyber deal

Glasgow-based cloud computing firm iomart Group has announced a new partnership with e2e-assure, the cyber security specialists.

Full story here

7am: Beeks contract

Beeks Financial Cloud, the Glasgow-based cloud computing and connectivity provider for financial markets, has signed a multi-year  private cloud contract worth £4.4 million over five years, is for a new European Tier 1 client, and was secured via a partner.

Gordon McArthur, CEO, said: “Securing a further contract of such significance reinforces our belief that the prospects for Beeks have never been stronger, as financial services organisations accelerate their cloud strategies.

“Alongside other recent wins we have announced, this latest contract contributes towards underpinning our FY23 expectations.

“A substantial pipeline continues to build across our Private Cloud and Proximity Cloud offerings, and we are confident in our ability to further increase our market share.”

Global markets

Brent oil was quoted at $122.05 a barrel this morning, up slightly from $121.99 late Wednesday as attention switches to US president Joe Biden’s meetings in Brussels.

In the US, Wall Street ended lower, with the Dow Jones Industrial Average down 1.3%, S&P 500 1.2% and Nasdaq Composite down 1.3%.

In Asia on Thursday, Japan’s Nikkei 225 index closed up 0.3%. In China, the Shanghai Composite was down 0.5%, while the Hang Seng index in Hong Kong was down 0.2%.

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