Market report

M&S | ITV | Aviva | Taylor Wimpey | Ithaca | Wetherspoon

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The FTSE 100 was off its lows for the day and closed 9.89 points lower at 7,296.25.

Sterling was also in negative territory, and was last down 1.33% on the dollar at $1.1390.

“With the elections in the US still not providing a clear direction for investors, a quietly cautious atmosphere prevails in stocks,” said IG chief market analyst Chris Beauchamp.


Wetherspoon

JD Wetherspoon shares slumped 6.31% after the pub chain posted a rise in sales as it continued to recover from pandemic restrictions, but said it had seen a slight slowdown in October and highlighted “significantly higher” costs.

It said like-for-like sales in the first 14 weeks of the financial year were 9.6% higher than the same period last year and 0.4% higher than the 14 weeks ending 3 November 2019.

Costs, especially in respect of labour, food and repairs, were substantially higher.

Trading has been broadly in line with expectations, although October has been a slightly slower month.

For the first nine weeks of the financial year, sales were 1.5% above the same period in calendar-year 2019. For the last 5 weeks, sales were 1.1% lower than the same period in 2019. 

In comparison with 2021, sales were up 10.1% for the first nine weeks and were 8.9% higher for the last five weeks.


Marks and Spencer

Food and clothing retailer Marks and Spencer fell 3.37% after saying it expected a material contraction in demand over the next 18 months, as it reported a drop in interim profit, but backed its customers to be more resilient than market assumptions.

Marks & Spencer Gyle

It expected to deliver annual results “similar” to expectations as interim pre-tax profits rose 11.3%.

Clothing and homewares sales rose 14% in the six months to 1 October, while food revenue was up 5.6%. Group revenue increased 8.5% to £5.5bn.

Trading in the first four weeks of the second half is in line with forecasts, with Clothing & Home sales up 4.2%, Food sales up 3.0% and International up 4.1%. 

Chief executive Stuart Machin said the chain approached the challenging trading conditions with an “increased resilience”.


Aviva

Aviva was down 1.75% even after it posted a 10% rise in third-quarter gross written premiums and backed its dividend and capital returns guidance.

Amanda Blanc, group chief executive, of the insurance and investments firm, said in an update: “Trading is positive and our performance is consistently strong. We have had a good nine months.

“Aviva’s capital and liquidity position is strong and our high quality asset portfolio has performed well during the recent period of extreme market volatility.

“We remain confident in the outlook for Aviva. We are on track to deliver our financial targets and trading momentum is building. Our dividend guidance remains unchanged and, as previously announced, we anticipate commencing additional returns of capital to shareholders with our 2022 full year results.”

The company anticipates commencing a new share buyback programme with its 2022 full year results.


ITV

ITV retreated 4.32% after the broadcaster reported a rise in sales for the first nine months of the year, as its production arm offset a fall in television advertising revenue

The broadcaster said that given the nature of its cost base and mitigations already in place, it expects to be able to manage inflation.

For 2023, continued higher rates of inflation will impact the cost base although it is looking carefully at further mitigation measures.

Total external revenue was up 6% at £2.52 billion (2021: £2.381bn) for the nine months to 30 September. Total non-advertising revenue was up 13%, representing over 50% of total revenue, as it continues to grow and diversify the business

Carolyn McCall, chief executive, said: “ITV has performed strongly delivering a 6% increase in total revenue for the first nine months of the year, driven by double digit growth in both digital revenue and revenue from ITV Studios.

“ITV Studios continues to outperform the growing content market and will exceed 2019 revenues in 2022.  It’s on track to deliver on all of its KPI targets and has a formidable slate to power it into 2023 as we further diversify the business by genre, geography and customer.

“We are making good progress on our new, free, ad-funded streaming service ITVX, which will be rolled out across devices and platforms in the coming weeks with the full launch of new and exclusive content on 8 December, in time to reach millions of viewers who will come to ITV for the FIFA World Cup.

“ITVX will supercharge our streaming business providing viewers with a content-rich destination rather than a catch up service and advertisers with valuable addressable audiences at scale. This will drive significant digital viewing and revenue growth, enabling ITV to deliver at least £750 million digital revenues by 2026.

“While we remain mindful of the macroeconomic and geopolitical uncertainty there’s strong operational momentum across both our Studios and Media & Entertainment divisions, as we continue to build a resilient, diversified business that can take advantage of the global growth in the demand for quality content and the desire of advertisers for both mass reach and data-led addressable advertising, targeting millions of UK viewers.”


Taylor Wimpey

Taylor Wimpey

Housebuilder Taylor Wimpey flagged a drop in the rate of sales and an increase in cancellation rates as a homebuyers feel the impact of higher mortgage rates and other bills.

The FTSE 100 company said year-to-date net private sales rate stood at 0.74 homes per outlet, per week for the year to date, compared with 0.95 in the year-ago period.

The sales rate fell further to 0.51 homes per outlet, per week in the second half of the year to date, Taylor Wimpey said.


FirstGroup

Shares in Aberdeen-based transport operator FirstGroup fell 9.92% after first-half numbers missed expectations.


Ithaca IPO price

Ithaca Energy has priced its IPO at 250p per share, valuing the owner of the Cambo oil field in the North Sea at £2.5 billion ($2.9 billion) at the start of conditional dealings on the main market of the London Stock Exchange.

Gilad Myerson, executive chair, said: “We have received great support from a high-quality selection of institutional investors and I am excited to welcome them on board as we continue to create value in the public markets.

“Ithaca Energy has undergone a transformation over the past three years to become one of the UK’s leading independent oil and gas companies and I am very excited for what lies ahead as we continue our journey in the public markets.”


Meta job cuts

Ireland is braced for up to 1,000 cutbacks at Facebook’s operations in the country as owner Meta Platforms begins laying off employees this morning.

Chief Executive Mark Zuckerberg told hundreds of executives on Tuesday that he was accountable for the company’s mis-steps and his over-optimism about growth had led to overstaffing.

He described broad cuts and specifically mentioned the recruiting and business teams as among those facing layoffs, the report said.

Rumours have been circulating in recent weeks that the company could be seeking to shed up to 1,000 roles from its Irish operations.

Meta employs more than 3,000 people directly in Ireland, with an additional 6,000 employed at operations across several sites, including its international headquarters in Dublin, Clonee data centre in Co Meath and Reality Labs in Cork.


Global markets

US markets closed higher for the third session in a row, but well off their best levels for the day ahead of key inflation data tomorrow and as results from the US midterm elections started to come in.

Ipek Ozkardeskaya senior analyst at Swissquote Bank said: “From an investor point of view, a Republican win in both chambers is a good outcome for the stocks. And even a divided government, which we will sure get, is better for the stocks than a Democratic win.“ 



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