M&G profit falls | Heathrow improves | Entain deal
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5pm: London lower
The FTSE 100 index closed down 41.20 points, or 0.6%, at 7,465.91.
GSK and its consumer health spin-off Haleon weighed on the index for the second day in a row, closing down 10% and 4.9% respectively on Zantac litigation worries.
Heading the blue-chips was Entain, rising 3.7%. The Ladbrokes-Coral owner left annual guidance unchanged and declared a dividend for the first time since the onset of Covid-19, with the bookmaker promising a “progressive” payout going forward
M&G: 223.8p +4.50p (2.07%)
Wealth manager M&G blamed market volatility for a 44.3% fall in adjusted operating profit for the six months to the end of June to £182m, down from £327m in the same period of 2021. However, there was an improvement in the flow of funds.
Restructuring costs included £33m on transforming the business and £17m on integrating its platform business, which now includes the M&G Wealth Platform.
Profit was also hit by a £21bn drop in assets under management during the first six months of the year.
M&G warned that ongoing macroeconomic uncertainty has the potential to impact its results, but said it was “cautiously optimistic” about the turnaround of its Wholesale Asset Management platform.
Its Institutional Asset Management segment has £4.4bn of committed client capital for private assets and more clients in the pipeline, it said.
M&G Wealth recently agreed to acquire Continuum Financial Services and launched PruFund Planet on its digital platform.
John Foley, M&G’s outgoing chief executive, said: “Improved client flows underpinned a resilient operational and financial performance despite a period of volatility when many investors reduced their exposure to markets.
“The turnaround in flows builds on the progress we made in 2021. In only 12 months, we have reversed our position from being £2bn in net client outflows, to achieving £1.2bn in net client inflows excluding Heritage.”
The firm declared a 6.2p dividend per share, up 2% as a result of its £500m share buyback programme.
M&G’s shares ticked up on the improvements in the flow of funds.
Heathrow airport boss John Holland-Kaye said the cap on passengers was resulting in a better experience with fewer cancellations, better punctuality and luggage delivery.
There had been an increase in airline ground handler capacity and resilience and security resource is back at pre pandemic levels, enabling 88% of Heathrow passengers to clear security within 20 minutes or less.
Border Force “has performed well so far this summer”, he said “and we are working to help them secure sufficient resource to serve the peak in passengers returning to the UK over the next few weeks.
Heathrow has seen the largest rise in passenger numbers of any European airport in the last year. Over six million people travelled through Heathrow in July and an estimated 16 million are expected between July and September.
Savills: 1025p -97p (8.63%)
Real estate adviser Savills is expecting a short term reduction in activity as markets adjust to rising cost of debt.
After announcing a fall in profits for the half year to the end of June, group chief executive Mark Ridley, said: “Despite staff cost inflation and the anticipated increase in discretionary costs, we have performed well so far this year, in line with the board’s expectations.” Full story here
7am: Entain: 1354.5p +49p (3.74%)
Ladbrokes-Coral owner Entain, the global sports-betting, gaming and interactive entertainment group, has partnered with EMMA Capital, an investment firm based in the Czech Republic, to establish a new venture to drive expansion in Central and Eastern Europe.
Entain will own 75% of the economic rights in Entain CEE. Entain CEE will acquire the SuperSport Group, the gaming and sportsbook operator in Croatia from EMMA, for an initial €600m in cash, with a further €90m due in early 2023.
Interim underlying profit before tax fell from £246.7m to £152.4m. However, the dividend is resumed with a payment of 8.5p per share.
London was expected to open higher following gains in the US and Asia overnight with global markets taking heart from the better than expected US consumer price inflation report.
The Nasdaq Composite jumped 2.9%, the S&P 500 improved 2.1% and the Dow Jones closed 1.6% higher.
The S&P 500 hit its highest level since May thanks to a broad rally brought on in part by positive reactions to July’s Consumer Price Index data released yesterday.
Tokyo markets were closed for the Mountain Day holiday. In China, the Shanghai Composite was up 1.3%, while the Hang Seng index in Hong Kong was up 1.6%.