Market report

Wetherspoon back in black | Metro Bank | AssetCo

JD Wetherspoon

Pubs chain J D Wetherspoon has returned to profit as sales continued their rebound from the pandemic.

The firm posted a pre-tax profit of £42.6 million in the year to the end of July compared to a pre-tax loss of £30.4m last time.

Revenue rose 10.6% to £1.9 billion from £1.7bn in the previous year. Like-for-like sales increased by 12.7% year-on-year.

Chairman Tim Martin said: “Wetherspoon continues to perform well. In the first nine weeks of the current financial year, to 1 October 2023, like-for-like sales increased by 9.9%, compared with the nine weeks to 2 October 2022.”

He added that perhaps the “biggest threat to the hospitality industry is the possibility of further lockdowns and restrictions.”

JD Wetherspoon opened three pubs during the year and sold, closed or terminated the leases of 31 pubs, leaving 826 pubs at the financial year end.

The board did not declare a dividend and despite the positive outlook its shares closed down 44.5p, or 6.4%, to 652p.

Halifax house prices

UK house prices fell again in September, but the pace of the month-on-month decline slowed, according to the Halifax house price index.

It said average house prices fell by 0.4% in September from August, slowing from a 1.8% decline in August from July. Market consensus cited by FXStreet had expected house prices to have declined by 0.8% on a monthly basis.

Annually, prices fell by 4.7% in September, accelerating from a 4.5% decline in August.

The average UK home now costs £278,601, around the level seen in early 2022. That is a £1,200 reduction from August.

Metro Bank

Metro Bank

Metro Bank’s chairman and the UK’s top financial watchdogs met yesterday as the bank seeks to raise up to £600 million and sell about a third of its mortgage book in an effort to shore up its balance sheet.

Metro, which operates mainly around London, is looking to raise as much as £250 million in equity funding and £350 million of debt, the Financial Times reported..

The news triggered a 29% fall in the bank’s shares to 36.1p at Thursday’s market close, but recovered on Friday to close 20.7%, or 7.75p, higher at 45¼p.

Sky News reported that Metro is also considering a sale of about £2.3 billion of its £7.5bn mortgage book to raise funds and reduce its capital requirements. Lloyds Banking Group, NatWest and HSBC are said to be among those approached.

The bank said on Thursday that it “continues to be well positioned for future growth”, pointing to its underlying profits for the past three quarters.


Martin Gilbert

Asset manager AssetCo and its wholly owned subsidiary, River & Mercantile Holdings have reached agreement in principle for the transfer of their interest as corporate partner in RMI, to partners of RMI led by Ian Berry, managing partner of RMI.

Partners of RMI will continue managing and operating RMI outside the AssetCo Group. It is anticipated that the transaction(s) to effect this change will be completed, subject to agreeing final contractual documentation, in Q4 2023.

Martin Gilbert, executive chair of AssetCo said the deal will allow that team to re-shape the RMI business to focus on delivering the best outcome for the fund’s clients while leaving AssetCo to focus on building its active equities business.

“In doing so, we are looking to capitalise on the recent acquisition of Ocean Dial Asset Management and bringing this together with our other active equities businesses under the River & Mercantile banner.

“In that context, the operations of our three legacy Scottish businesses have now been fully amalgamated into a single unit pending further integration with River & Mercantile in London before calendar year end.

“This move, following quite swiftly on the heels of our disposal of Rize ETF Limited, delivers a much-simplified Group which is better able to withstand the significant headwinds that persist in global markets for asset management services.

“ur narrower focus, together with the financial support of our valuable stake in the business of Parmenion, gives us renewed confidence for the future.”

Market – US jobs surge

The US added 336,000 non-farm payroll (NFP) jobs in September, double the forecast of 170,000, raising the prospect of a further interest rate rise.

The unemployment rate came in unchanged at 3.8% (consensus: 3.7%). Average hourly earnings rose 0.2% in the month (consensus: +0.3%).

The benchmark S&P 500 index closed up by 1.2% as investors could see signs of a soft landing for the labour market. The tech-focused Nasdaq rose 1.6%. The Dow Jones industrial average closed up 0.9%.


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