FTSE 100 Live Thursday
- Hays issues profit warning
- Whitbread UK sales weaken
- AIM boss urges IHT help
Market update: FTSE 100 down, Whitbread and Hays under pressure
10:12 , Graeme EvansThe caution of the Federal Reserve and worries over an escalation in the Israel-Iran conflict today fuelled a weaker session for the FTSE 100 index.
London’s top flight dropped 47.39 points to 8796.08, while the mid-cap FTSE 250 lost 0.9% in a session when recruitment firm Hays issued a profit warning.
The selling followed a weak finish for Wall Street ahead of today’s Juneteenth holiday, while Asia benchmarks including the Hang Seng index slumped.
The Federal Reserve fuelled tension by cutting US growth forecasts for this year and next, while its projections also pointed to higher inflation than thought in March.
The base case is for two US interest rate cuts this year but with an increased number of officials expecting no change at all.
Fed chair Jerome Powell flagged the highly uncertain outlook, although with the unemployment rate still low at 4.2% he said the central bank could afford to wait for more data on the impact of tariffs.
UBS said: “Our base case continues to call for 100 basis points of cuts starting in September, but we see risks as skewed toward a later start to cuts.”
Confusion over potential US involvement in Iran attacks added to today’s risk averse session and lifted the price of Brent Crude rose above $77 a barrel.
BP shares lifted 5.25p to 391.75p and Shell added 25.5p to 2692.5p, while defensive Tesco and Centrica also improved on a shortened FTSE 100 risers board.
Some of the biggest fallers came from the mining sector after declines of 5.3p to 283.95p for Glencore and 68.5p to 4172p for Rio Tinto.
Ex-dividend stocks Persimmon and United Utilities lost 3%, while Whitbread dropped 72p to 2718p after the Premier Inn reported a 3% decline in UK like-for-like sales at the start of its financial year.
The Premier Inn owner described trading conditions as challenging amid limited booking visibility but that it was performing ahead of the market.
Broker Peel Hunt reiterated a price target of 3500p following the update.
It said: “Whitbread continues to create value: room openings are accelerating, skewed to higher-priced London, business market penetration is growing and independent competitors are struggling.”
Hays fell 12% or 8.75p, leaving the global recruitment firm at a multi-year low of 61.45p after it warned June year profits will be £10 million short of City forecasts.
Hays highlighted “broad-based weakness” in the permanent recruitment market, with like-for-like net fees set to show a 9% decline in the fourth quarter.
The warning also impacted FTSE 250-listed Page Group, which slid 8% or 22.2p to 238.6p, and Robert Walters after a decline of 8.4p to 199.6p in the FTSE All-Share.
AIM at 30: Boss warns over inheritance tax impact
09:36 , Graeme EvansThe boss of London’s junior stock market has called on the Government to help halt an exodus of companies listed in the City.
Marcus Stuttard, head of AIM and UK primary markets at the London Stock Exchange, urged the Government to reinstate “financial incentives” for AIM investors.
This follows last autumn’s Budget, which revealed plans to slash inheritance tax relief on AIM-listed stocks from 100% to 50% from April next year.
More than 60 firms – with a market cap of over £12 billion – have already announced plans to leave AIM in 2025 as they look to move to the main market, delist or are bought out.
Today marks the 30th anniversary of AIM, which is home to stocks including Jet2 and Fevertree Drinks.
Frasers Group ends Revolution Beauty bid interest
08:40 , Graeme EvansMike Ashley’s Frasers Group has pulled out of the bidding process for Revolution Beauty.
The cosmetics retailer formally put itself up for sale last month after being approached by an unnamed suitor.
It later told investors that Frasers was “one of a number of parties conducting due diligence” before a potential bid.
Frasers, the retail giant which owns Sports Direct and Flannels, said today it “now confirms that it does not intend to make an offer” to buy the business.
Revolution Beauty shares fell 15% or 1.2p to 6.5p.
Whitbread shares down in weaker FTSE 100, Hays slides 14%
08:25 , Graeme EvansThe FTSE 100 index is 0.4% or 31.88 points lower at 8811.59, with Whitbread among the fallers in the wake of the Premier Inn owner’s first quarter update.
Whitbread shares weakened 2% or 55p to 2735p.
Other leading fallers came from the mining sector as Glencore dropped 3.15p to 286.1p and Anglo American fell 22.5p to 2067.5p.
United Utilities lost 40.5p to 1130.5p and Compass Group fell 28p to 2469p as a result of their shares being marked ex-dividend.
BP rose 5p to 391.5p and Shell lifted 24.5p to 2691.5p after Brent Crude futures traded above $77 a barrel. BT Group also rose 0.6p to 189.95p and Centrica improved half a penny to 166.85p.
In the FTSE 250, Hays shares slid 14% or 9.6p to a multi-year low of 60.6p after the recruitment firm warned profits will be £10 million short of City forecasts.
Bank of England interest rate decision due, Federal Reserve unchanged
07:55 , Graeme EvansThe Bank of England base rate is expected to be pegged at 4.25% when the central bank publishes its latest monetary policy decision at 12 noon.
Policymakers have cut rates at every other meeting since the Bank started to ease borrowing costs last August, from a peak of 5.25%.
Economists expect the next reduction in August, with another to follow in November dependent on inflation’s progress back towards a 2% target.
Yesterday, the Federal Reserve held its headline rate in the range of 4.25%-4.5% and signalled the potential for two rate cuts this year.
The central bank cut its forecast for economic growth in 2025 to 1.4% from the 1.7% forecast in March, with 2026’s estimate down to 1.6% from 1.8%. It lifted its projection for the bank’s preferred inflation measure.
Whitbread sales fall amid limited visibility
07:43 , Graeme EvansPremier Inn owner Whitbread today reported a 3% decline in UK like-for-like sales in the first quarter of its financial year to 29 May.
Revenue per available room declined by 2% but the FTSE 100-listed group said it continued to outperform in a challenging market backdrop,
Chief executive Dominic Paul said: “Whilst the short-lead nature of our business means that our forward visibility remains limited, our forward booked position is ahead of last year and we remain confident that we can continue to outperform the market.”
It reported outperformance in the London market, with occupancy of 76.6% and revenue per available room of £81.07.
Total sales in the UK fell by 5%, including a 16% decline in the Beefeater-to-Brewers Fayre food and drink business as a result of strategic changes.
The addition of Whitbread’s Germany operation left total sales 4% lower.
Hays cuts profit guidance amid hiring slowdown
07:17 , Graeme EvansHays today cut profit guidance for the June financial year after experiencing “broad-based weakness” in the permanent recruitment market.
Like-for-like net fees are expected to show a 9% decline in the fourth quarter of the year, against a soft prior-year comparative. The figure for permanent roles is down 14% and temporary and contracting 5% lower.
The global recruitment firm now expects a pre-exceptional operating profit of about £45 million, which compares with the City’s consensus forecast of £56.4 million.
FTSE 100 seen lower, US markets weaken on Federal Reserve update
07:03 , Graeme EvansWall Street markets weakened at the end of last night’s session after the Federal Reserve cut its growth forecast for this year to 1.4%.
The central bank kept interest rates on hold for a fourth successive meeting but indicated it may cut borrowing costs twice later this year.
The Dow Jones Industrial Average ended the session down by 0.1%, while the S&P 500 lost earlier gains to finish slightly lower.
The FTSE 100 index rose 9.44 points to 8843.47 but is forecast to open about 0.1% lower in this morning’s session.
The price of Brent Crude stands at $76.88 a barrel, while the pound is at $1.34 ahead of today’s expected unchanged interest rate decision by the Bank of England.
