Market report

Royal London | Hargreaves Lansdown | Pets At Home


Blue chips drift under water

The FTSE 100 closed in the red, having spent the early part of the session in positive territory, but falling as traders weighed up a strong US jobs number alongside the generally downbeat global economic outlook.

Britain’s benchmark of blue-chip shares closed down around 8 points, or 0.11%, at 7,439.

Royal London

Pensions provider Royal London posted a 36% increase in half year operating profit to £109m but a loss before tax of £228m (H1 2021: £228m profit) as falls in equity and bond markets led to negative economic variances.

Life and pensions new business sales were up 19% at £5,494m (H1 2021: £4,620m), driven by a 24% rise in Individual and Workplace pensions sales. UK Protection sales slowed as the market has returned to pre-pandemic levels.

It reported 140,000 new pension policies had been taken out by customers to save for their retirement with Royal London during the first half of 2022, increasing the total number of UK pension policies to over 3.1 million.

Assets under management decreased to £150bn (31 December 2021: £164bn) with net inflows offset by negative market movements.

CEO Barry O’Dwyer said: “As the increased cost of living continues to create uncertainty, building customers’ financial resilience remains at the forefront of our priorities.”

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Hargreaves Lansdown: 884.7p +42p (4.98%)

The wealth manager and data group said underlying profit before tax to the year to the end of June fell 19% to £297.5 million while profit before tax slumped 26% to £269.2million

Assets Under Administration were 9% lower, driven by market falls to £123.8 billion.

The group is recommending a dividend up 3% at 39.7 pence per share.

Chris Hill, chief executive, said: “Against a macroeconomic and geopolitical climate not seen in a generation with subdued flows and lower activity across wealth management, we have delivered £5.5 billion of net new business through the year and the quality of our service attracted a further 92,000 net new clients.

“Our focus is firmly on servicing our clients, disciplined cost management and delivering our strategy because we remain confident that it will deliver outstanding client service, strong shareholder returns and market leadership for HL.

“Our progress against our strategic goals has been strong since February with the launch of the first of our new funds and an acceleration in our Active Savings proposition, an essential service to help clients manage their cash savings at this critical time, leading to a record £4.6 bn assets, with over 114,000 client accounts.”

Pets At Home: 337p -1.00p (0.30%)

Pet supplies retailer Pets At Home said it had delivered a “continued strong performance” in its first trading quarter.

Total group revenue rose 7.1% to £404.7m, while like-for-like revenues were up 6% year-on-year, reflecting broad-based growth throughout the 16 weeks ended 21 July.

The FTSE 250-listed firm stated that retail revenues were up 6.6%, while vet group revenues had risen 11.2%.

It kept its full-year guidance unchanged.

Global markets

Attention will turn to the US and the release of July’s non-farm payrolls report. Economists at Barclays Research are anticipating a further modest slowdown in the pace of hiring to 275,000, versus 372,000 during the prior month (consensus: 250,000).

European stocks made gains despite the biggest rise in UK interest rates since 1995, and growing tensions between the US and China.

The German Dax added 0.55% after German factory orders fell less than expected in June, according to figures released on Thursday by Destatis.

In Asia, shares traded higher after the rally on Wall Street and despite tensions over US House Speaker Nancy Pelosi’s controversial visit to Taiwan, which has triggered Beijing into massive live-fire military exercises in the Taiwan Strait.

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