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M&G Irish deal | Parkmead’s gas boost | Robert Walters | Topps Tiles
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5pm: LSE pushes on, pound falls
The FTSE 100 closed in positive mood, up 82.3 points at 7,107.77, but the political uncertainty combined with the strength of the dollar has pushed sterling 0.4934% lower to $1.1889. Earlier it fell to $1.877, new low since the early days of the pandemic.
9.30am: Pound slides
“The pound was already sliding before the UK Government was plunged into chaos, yet the resignations of Rishi Sunak and Sajid Javid have simply added to the currency’s woes as it shows a cabinet in disarray,” says Russ Mould, investment director at AJ Bell.
“Recession fears have weighed on the pound in recent months and the currency has now hit a two-year low against the dollar as inflation continues to hurt consumers and businesses.
“Political chaos adds another layer of uncertainty on top of the recession fears, so it is no wonder the pound is sinking.”
The FTSE 100 enjoyed a rebound after yesterday’s rout and was trading 88 points higher at 7,113.39 after earlier soaring by about 170 points.
7.30am: M&G in Irish deal
M&G, the savings and investments business, has acquired a 41% stake in Finance Ireland, the country’s largest non-bank lender.
The investment is on behalf of the £143 billion Prudential With Profits Fund and external client funds managed by M&G Investments.
Finance Ireland is the most diversified lender in the market, providing residential mortgages, commercial property, car finance, leasing, SME financing and lending to the agricultural sector.
In 2021, the company’s lending figure passed €1 billion for the first time and the new €50 million equity raised will underpin future lending growth and expansion.
The deal sees the Ireland Strategic Investment Fund (ISIF) sell its 33% stake in the business.
Finance Ireland, which was forced to abandon plans for a €100 million-plus initial public offering (IPO) in May 2020 as the rapid spread of Covid-19 globally threw equity markets into turmoil, said it will use the fresh cash to support its future growth and expansion, including the continued growth of its car finance business.
7am: Parkmead benefiting from gas prices
Aberdeen-based energy company Parkmead said its gas assets continue to perform well and, combined with the additional volumes resulting from the royalty deal agreed in 2021, the group has benefited from continued high European gas prices.
As a result, revenue for the year to 30 June 2022 from the company’s Dutch gas assets is now expected to exceed €14.5 million, ahead of the board’s expectations.
Gas prices have remained around €100/MWh following the invasion of Ukraine and prices have experienced a large upward spike since mid-June 2022.
Parkmead expects gas prices could remain elevated for the short to medium term, due to tight gas supplies in Europe, therefore Parkmead has chosen to remain 100% unhedged.
7am: Robert Walters chair to leave
Recruitment firm Robert Walters said Ron Mobed has decided to step down from his role as non-executive chair on 15 July.
He said: “With the group performing so well, I have decided to step down from my role to focus on other projects.
“Robert Walters is a great company and has a strong management team. I am confident that the group will continue to go from strength to strength.”
Robert Walters, CEO, added: “On behalf of the board, I would like to thank Ron for his commitment to best practice, professionalism and contribution to the development of the Group. We wish him well for the future.”
While the board considers a successor, Tanith Dodge will undertake the role of interim non-executive chair.
7am: Topps Tiles confident
Tiles specialist Topps Tiles said in an update on trading for the first quarter ended 2 July it remains strongly cash generative and cash balances have increased since the half year.
Rob Parker, CEO, said: “Despite the continuing headwinds from lower consumer confidence, supply chain challenges and high inflation, trading remained encouraging and in line with our expectations in the third quarter, with group sales up 9.2%.
“Sales per store in Topps Tiles remain significantly ahead of our pre-pandemic performance, Commercial and Pro Tiler Tools are growing well year on year, and we have successfully launched our newest brand, Tile Warehouse.
“Whilst we are mindful of the current economic pressures and their impact on the outlook for consumers, we are confident that our successful strategy, multiple growth drivers and strong balance sheet leave us well-positioned to deliver medium term growth and our 20% market share goal of ‘1 in 5 by 2025’.”
The London stock market was set to rebound after suffering its worst single-day drubbing in three weeks, even as investors braced for months of political uncertainty.
However, investors expect little respite in the near term for sterling, which is at a two-year low against the dollar. Some are hoping the crisis will lead to a softening of outgoing Chancellor Rishi Sunak’s tough stance on Brexit negotiations and fiscal spending.
The pound was quoted at $1.1927 early today, up from $1.1900 at the London equities closed on Tuesday, but down from $1.1955 around the time of the closing bell in New York.
Asian markets were gripped by fresh Covid outbreaks in China that may hamper attempts to get the economy back into growth mode. The Nikkei 225 was 1.0% lower in late dealings. In China, the Shanghai Composite shed 1.3%, while the Hang Seng in Hong Kong fell 1.8%.
On Wall Street, stocks staged a late turnaround to bounce off session lows. The Dow Jones Industrial Average closed down 0.4%, but the S&P 500 added 0.2% and the Nasdaq Composite closed up 1.8%.