
FTSE 100 Live Thursday
- Labour market weakens
- Budget costs hit Frasers
- Ocado shares jump
Market update: Diploma leads FTSE 100, Ocado rallies in FTSE 250
10:19 , Graeme EvansLater summer booking trends and cost pressures spooked easyJet investors today as the low-cost airline fell 7% in an otherwise robust FTSE 100 index.
The Luton-based carrier reported a £50 million rise in third quarter profit to £286 million, a figure below the City’s consensus of £295 million.
Two-thirds of fourth-quarter capacity has been sold, leaving the outcome for the financial year dependent on later bookings and associated yields.
Higher fuel costs and the impact of industrial action by French air traffic control also clouded sentiment, despite more strong profit progress in the holidays division.
Shares fell 7% or 36.9p to a three-month low of 488.9p, while British Airways owner IAG retreated 7.1p to 373.4p as the second worst stock in the FTSE 100 index.
A strong session for Lloyds Banking Group after shares rose 3% or 2.1p to 78.5p helped London’s top flight advance by 0.4% or 39.79 points to 8966.34.
The best performing stock was Diploma, which hit a fresh record after upgrading its full-year revenue growth guidance to 10% from 8% previously.
The industrial supplier, which is focused on seals, controls and life sciences, made two acquisitions in the third quarter as it continues a proven strategy of targeting businesses with the potential to deliver strong returns.
The shares rose another 8% or 391p to 5295p, up 24% this year.
The FTSE 250 index advanced 75.16 points to 21,677.02 during a busy session for mid-cap updates.
Ocado surged 13% or 30.4p to 265.9p after half-year earnings more than doubled at its technology platform division, which serves 13 grocery retail partners.
The company also reiterated its ambition to be cash flow positive during the next financial year.
Magazine publisher Future lifted 70.5p to 782.5p as investors cheered a return to growth in US advertising, while a robust year-end update by homewares retailer Dunelm boosted shares by 38p to 1179p.
Premier Foods fell 8p to 185.4p after it said that first quarter sales rose 0.3% in the face of tough comparatives and unhelpful weather conditions.
Sports Direct owner Frasers Group dipped 19p to 626p after it issued guidance for underlying profits of between £550 million and £600 million in 2025-26.
This compares with £560 million in results published today. The group said it is working hard to offset £50 million of additional wage costs related to the autumn budget.
Frasers “working hard” to offset rising wage costs, shares fall
09:33 , Graeme EvansSports Direct owner Frasers today said it was working hard to offset soaring wage costs, adding that trading has been “more encouraging” after a tough end to 2024.
The group reported a 2.8% rise in underlying pre-tax profits to £560.2 million for the year to April 27, despite a 7.4% drop in revenues to £4.9 billion.
Second-half profits jumped 8.3% as it recovered from a tough end to 2024 due to weaker consumer confidence in the run up to, and following, the autumn budget.
Shares fell 3% or 17.5p to 627.5p as the group said it expects to deliver underlying profits of between £550 million and £600 million in 2025-26.
It is faced with a £50 million hike in costs due to the autumn budget move to hike national insurance contributions and increase in the minimum wage.
Frasers said: “We are working hard to mitigate those (costs) by taking more costs out, focusing on potential efficiencies through the use of AI, realising further acquisition synergies and sustaining a robust gross margin.”
Ocado earnings rise, shares jump 11%
09:05 , Graeme EvansOcado shares have jumped 11%, up 26.8p to 262.3p after the grocery logistics business reported an improved half-year performance.
Group revenues of £674 million were 13.2% higher, while earnings in the six months to 1 June jumped to £91.8 million from £52 million the year before.
This was driven by a doubling of earnings in the technology platform division, which provides services to 13 grocery retail partners.
Chief executive Tim Steiner said the company’s focus remained on becoming cash flow positive during the next financial year.
Ocado said its M&S retail joint venture lifted revenues by 16.3%, with underlying earnings up 61% to £33.3 million.
Diploma up 7% in stronger FTSE 100, easyJet down 7%
08:19 , Graeme EvansThe shares of easyJet have fallen 7%, down 39.3p to 486.5p after the low-cost airline said the trend towards later bookings continued to be seen.
Two-thirds of fourth-quarter capacity has been sold, leaving the outcome for the financial year dependent on summer bookings and associated yields.
The FTSE 100 index rose 21.92 points to 8948.47, led by industrial products supplier Diploma after it upgraded guidance for full-year revenues growth to 10%.
The shares advanced 7% or 338.5p to 5242.5p. Meanwhile, renewables generation firm SSE fell 5p to 1839p after it published an in-line AGM trading update.
In the FTSE 250 index, Dunelm rose 17p to 1158p but Premier Foods fell 8.95p to 184.45p after the release of their latest trading updates. Frasers Group results left shares 34.5p lower at 610.5p.
Firms curtail hiring in face of rising costs
07:50 , Graeme EvansThe number of payrolled employees fell by 41,000 in today’s labour market report to 30.3 million.
Capital Economics said the figure has fallen in seven of the eight months since the Chancellor announced rises in National Insurance contributions and the minimum wage.
The consultancy said: “Clearly businesses are offsetting the rises in their costs by reducing headcounts.
“The further fall in the number of job vacancies, from 738,000 in the three months to May to 727,000 in the three months to June, also suggests that businesses have curtailed hiring plans.”
Yesterday’s inflation reading provided some evidence that businesses are responding to higher national insurance contributions by raising their selling prices.
Capital Economics said: “But the bigger response appears to be the reduction in headcounts, which should eventually weigh on inflation. That’s why we think the Bank will continue to cut interest rates gradually from 4.25% now to 3%.”
Easyjet profit rises, later booking trends continue
07:21 , Graeme EvansLow-cost airline easyJet’s third quarter profit today improved by £50 million to £286 million, driven by strong demand for its primary airport network and the timing of Easter.
Airline passenger numbers increased by 2% in the three months to 30 June, with the load factor up slightly.
It remains positive on the outlook for the rest of the financial year, despite recent higher fuel costs and the scale of industrial action by French air traffic control.
Two-thirds of fourth-quarter capacity has been sold as the trend towards later bookings continues to be seen.
Chief executive Kenton Jarvis said: “We performed well in the quarter, increasing profits alongside improving operational performance which has boosted easyJet’s customer satisfaction scores and we continued to see strong demand from our customers.
“We are extremely unhappy with the strike action by the French ATC in early July, which as well as presenting unacceptable challenges for customers and crew also created unexpected and significant costs for all airlines.”
He said the easyJet holidays division remains on track to deliver more than £235 million of profits for the full year.
Unemployment rate rises, earnings growth slows
07:05 , Graeme EvansThe UK unemployment rate today increased to 4.7%, the highest level in four years.
The figure compared with City forecasts for an unchanged rate of 4.6%.
Growth in average earnings excluding bonuses slowed to 5% in the three months to May, compared with 5.3% in last month’s labour market report.
FTSE 100 set for improved session, US stocks recover
06:56 , Graeme EvansThe FTSE 100 index is seen rising by 0.4% after Wall Street markets finished in positive territory last night.
London’s top flight yesterday closed lower for a second successive session, falling 11.77 points at 8926.55.
President Trump’s denial of reports that he intended to oust Federal Reserve chair Jerome Powell helped to ease earlier jitters on Wall Street.
The Dow Jones Industrial Average rose 0.5%, while the S&P 500 index and Nasdaq Composite added 0.3%.
Leading Asia benchmarks are slightly higher this morning.