John Lewis Partnership today posted a half-year loss after highlighting the impact of higher National Insurance costs.
The employee-owned department stores and Waitrose supermarket business still expects full-year profit growth.
Trainline has bolstered profit guidance, while the global focus is on US inflation figures and the latest European Central Bank policy meeting.
FTSE 100 Live Thursday
- John Lewis loss widens
- Trainline lifts guidance
- Treasury mulls rates overhaul
Market update: BAE leads stronger FTSE 100, Trainline surges on buy back
10:07 , Graeme EvansLondon’s mid-cap benchmark today outpaced the FTSE 100 index after Trainline signalled a bumper buy back of shares equivalent to 14% of its market value.
The blue-chip index rallied by 0.5% or 45.04 points to 9270.43, led by BAE Systems as the defence firm added another 3% or 50.5p to 1882.5p.
Associated British Foods and airlines group IAG also lifted 2%, offset by a decline of 2% for asset manager M&G after its shares were marked ex-dividend.
London’s robust performance came ahead of today’s release of US inflation figures and the latest decision of European Central Bank policymakers.
The FTSE 250 index put on 0.7% or 158.60 points to 21,692.70, with Trainline the best performer after posting a strong half-year trading update.
Shares surged 10% or 26.6p, returning them to May’s level of 286p as the online platform forecast full-year earnings growth near the top of its 6-9% guidance range.
UK consumer net ticket sales were 8% higher at £2.1 billion, while the international business grew 2% to £594 million as Trainline focused investment on European high-speed routes with emerging carrier competition.
Boosted by the first half showing, Trainline extended its share buy back programme by £150 million over the next 12 months - 14% of its value at last night’s price.
Panmure Liberum said: “Near-term, the current valuation is driven more by fears over regulatory risk than by short-term fundamentals.
“We continue to think Trainline is in a strong position and maintain our Buy rating and 470p target price.”
Other stronger mid-cap stocks included Playtech, which lifted 7% or 26.5p to 423p after the online gambling platform and services provider said it is on track for forecast-beating annual earnings.
The haul of 91.6 million euros in today’s interim results was 16% down on last year but consistent with upgraded expectations in last month’s trading update.
On AIM, Fevertree Drinks rose 10% or 81p to 856p after the mixers firm reported continued US momentum during the transition to a new strategic partnership with Molson Coors.
US revenues rose 6% in today’s half-year results, whereas the UK declined 6% amid continued challenging conditions in the on-trade category.
Fevertree recently signed a long-term deal giving Molson Coors exclusive rights to sell, distribute and produce the brand in the United States.
Adjusted half-year earnings of £18.4 million came in 1% higher and better than the £16.3 million forecast by Jefferies.
The City bank said: “Whilst still early days, trading in the US would appear to be running ahead of expectations and bucking the trend of broader beverage alcohol.”
Treasury mulls business rates overhaul
09:20 , Graeme EvansThe Treasury is looking at changes to the current system of business rates – the tax on UK business properties – as part of efforts to cut red tape and improve growth.
Potential moves include overhauling small business rates relief rules, which “can discourage” expansion and investment.
The current rule means that when a company opens a second property it loses access to all small business rates relief unless it meets specific criteria.
It is understood that bosses of major high street firms, such as John Lewis, met with the Chancellor Rachel Reeves last week and encouraged a shake-up of current business rates rules.
She said: “Our economy isn’t broken, but it does feel stuck. That’s why growth is our number one mission.”
Fevertree hails progress amid Molson Coors switch
08:57 , Graeme EvansFevertree Drinks today said its US business maintained sales momentum during the transition to a new strategic partnership with Molson Coors.
US revenues rose 6% in the first half of the year, whereas the UK declined 6% amid continued challenging conditions in the on-trade category.
Fevertree recently signed a long-term deal giving Molson Coors exclusive rights to sell, distribute and produce the brand in the United States.
The move into Molson Coors’ national network of distributors commenced in June.
Fevetree’s AIM-listed shares rose by 9% or 73p to 848p after adjusted half-year earnings of £18.4 million came in 1% higher and better than the £16.3 million forecast by Jefferies.
The City bank said: “Whilst still early days, trading in the US would appear to be running ahead of expectations and bucking the trend of broader beverage alcohol.”
FTSE 100 rallies, AIM's Fevertree Drinks up 7%
08:24 , Graeme EvansThe FTSE 100 index today rose 0.5% or 45.99 points to 9271.38, with BP and Diageo among the stocks up by 1%.
M&G and Intertek were among the biggest fallers after shares traded without their latest dividend, while the strong run for Anglo American ended with a decline of 29p to 2502p.
FTSE 250-listed Trainline recovered from recent weakness, lifting 11% or 27.8p to 287.8p after it forecast full-year earnings near the top end of City expectations.
The ticketing platform also announced a further buyback of shares worth £150 million.
On AIM, Fevertree Drinks rose 7% or 52.7p to 827.7p after it beat City expectations with a 1% rise in half-year adjusted earnings to £18.4 million. The results also included a £30 million buyback of shares.
John Lewis Partnership half-year loss widens
07:55 , Graeme EvansJohn Lewis Parternship today reported wider losses after its half-year performance was impacted by the rise in National Insurance costs and a new packaging tax.
It recorded an operating loss of £34 million in the six months to June, compared with a £5 million deficit last year.
The John Lewis department stores and website fell £53 million into the red while Waitrose made a £110 million profit.
Partnership chair Jason Tarry said: “The investments we are making, combined with our plans for peak trading, provide a strong foundation for the remainder of the year.
“While we are reporting a loss in the first half, we’re well positioned to deliver full year profit growth, which we’ll continue to invest in our customers and Partners.”
Traders focused on US inflation and ECB rates meeting
07:47 , Graeme EvansThe interest rate outlook is in focus during a significant session for traders in Europe and the United States.
The European Central Bank is widely expected to keep its deposit rate at 2% for a second meeting in a row.
The policy meeting will be followed by the release of growth and inflation forecasts, which will help shape expectations for further interest rate cuts.
At about the same time, the release of US inflation figures for August are expected to show an increase in the annual rate of CPI from 2.7% to 2.9%.
Despite the increase, traders remain confident that the Federal Reserve will cut interest rates next week.
With producer prices below expectations yesterday, Wall Street is currently pricing between two and three quarter point rate cuts before the year end.
Trainline improves earnings guidance, unveils £150m buyback
07:22 , Graeme EvansTrainline today bolstered annual profit guidance after reporting that net ticket sales rose 8% to £3.2 billion in the six months to the end of August.
The sales growth, which compares with the company’s full-year target range of 6-9%, helped lift group revenues by 2% to £235 million.
The FTSE 250-listed online ticketing platform now expects adjusted earnings growth at the top end of its previous guidance range of between 6% and 9%.
UK consumer net ticket sales were 8% higher at £2.1 billion, while the international business grew 2% to £594 million as Trainline focused investment on European high-speed routes with emerging carrier competition.
In Southeast France, increased carrier competition between Paris, Lyon and Marseille drove second quarter sales growth of 34%.
Chief executive Jody Ford said: “Rail liberalisation in Europe continues to demonstrate the value Trainline brings as the preeminent domestic aggregator.”
Trainline announced a share buyback programme of £150 million over the next 12 months, which if completed would bring the total to £350 million in three years.
Housing market weakens amid economic uncertainty - RICS
07:09 , Graeme EvansHome buyer inquiries and house sales slipped back further in August, the Royal Institution of Chartered Surveyors (Rics) said today.
New instructions also fell for the first time in more than a year.
Tarrant Parsons, head of market research and analysis at RICS, said: “With buyer demand easing and agreed sales in decline, the housing market is clearly feeling the effects of ongoing uncertainty.
“Concerns over the wider economic and fiscal outlook, combined with questions around the future path of interest rates amid stubbornly high inflation, are weighing on sentiment at this time.”
FTSE 100 seen higher, oil and gold prices fall back
07:02 , Graeme EvansA tech-fuelled session after Oracle shares soared 36% yesterday helped the S&P 500 index and the Nasdaq Composite to close at record highs.
The Dow Jones Industrial Average fell 0.5% but the S&P 500 lifted 0.3% and the Nasdaq Composite edged up by a handful of points. Oracle jumped on its new guidance for AI revenues, despite a miss on quarterly earnings.
The FTSE 100 index gave back early gains to close 17.14 points lower at 9225.39 as weak retailers and increased geopolitical concerns impacted the performance.
London’s top flight is forecast to open about 0.2% higher this morning, reflecting a largely positive session for Asia markets.
Oil and gold prices are down slightly at $67.28 a barrel and $3630 an ounce respectively.
