FTSE 100 Live Thursday
- WH Smith error hits shares
- Hays slashes dividend
- Public borrowing beats forecasts
Market update: FTSE 100 stays near record, WH Smith slides
10:16 , Graeme EvansAn accounting error at WH Smith and dividend reset by Hays today put their midcap shares in the spotlight during another record session for the FTSE 100 index.
London’s top flight broke new intraday ground at 9301.52, having outperformed in yesterday’s session with a rise of 1% to post a record close of 9288.14.
The FTSE 100 index settled 2.72 points higher at 9290.86 as BAE Systems returned to favour with a rise of 33.5p to 1760.5p, offset by falls for ex-dividend stocks including Legal & General and Imperial Brands.
The main trading interest came in the FTSE 250, particularly WH Smith after shares skidded 37% on a major hit to profit expectations for the year to 31 August.
The group, which recently sold its high street operations in order to focus on its portfolio of global travel stores, disclosed that supplier income had been recognised too early in its North American business.
The overstatement means that profits in the division will be £25 million rather than the £55 million forecast, with the surplus for the group now at £110 million.
Shares slumped to their lowest since the early days of the pandemic, off 409.5p to 700.5p, as the City had previously forecast a profit of about £157 million.
WH Smith has asked Deloitte to undertake an “independent and comprehensive review” of the overstatement.
The shares of recruitment firm Hays also traded at a multi-year low, down 4% or 2.4p to 61.1p after it reported a 66% slide in underlying profits to £32.2 million for the year to 30 June.
Net fees decreased by 11% to £972.4 million, while Hays said trading conditions remained challenging in July and August. The company also announced a rebasing of its dividend to 1.24p a share, down from 3p the year before.
The best performing stock in the FTSE 250 was analytical instruments business Renishaw, which rose 9% or 265p to 3240p after disclosing that next month’s annual results will show profit towards the top end of expectations.
It also said that finance director Allen Roberts is to step down after a career of over 46 years with Renishaw. Interim chair David Grant said: “To have remained finance director of a FTSE listed company for over 40 years is an incredible achievement.”
Premier Foods rose 3.6p to 190.4p , boosted by the acquisition of ready-to-eat pulses and grains brand Merchant Gourmet for an enterprise value of £48 million.
Private sector activity accelerates, job numbers fall
09:48 , Graeme EvansAn acceleration in private sector output growth to its fastest pace for 12 months today boosted hopes of an upturn in the UK economy.
S&P Global’s preliminary PMI data showed a reading of 53, above the neutral level of 50 for the fourth successive month and stronger than City forecasts of near to July’s 51.5.
The services sector led the expansion with a score of 53.6, while manufacturing activity also showed further signs of stabilising.
New business volumes expanded at the strongest pace since October 2024 but employment was a weak spot in the survey as total workforce numbers decreased for the eleventh month running and at a marked pace.
Input cost inflation also edged up to its highest since May.
Chris Williamson, chief business economist at S&P Global Market Intelligence, said it was evident from survey measures of order books that the demand environment remains both uneven and fragile.
He added: “Companies report concerns over the impact of recent government policy changes, as well as unease emanating from broader geopolitical uncertainty.
“Goods exports are still falling especially sharply.”
Hays profit slides, headwinds persist in July and August
08:33 , Graeme EvansHays today slashed its dividend after the global recruitment firm reported a 66% slide in underlying profit to £32.2 million for the year to 30 June.
Net fees decreased by 11% to £972.4 million in the period, with temporary and contracting hiring down 7% and permanent recruitment 17% lower.
Trading in July and August has been in line with the company’s expectations, with no significant change in trading momentum from the previous quarter.
Chief executive Dirk Hahn said: "Market conditions remained challenging during the year, with economic and political uncertainty weighing on confidence, increasing 'time-to-hire' and reducing placement volumes.
“Despite making significant strategic and operational progress towards our long-term ambitions, our overall financial performance was impacted by these headwinds.”
The company announced a dividend of 1.24p a share, down from 3p the year before. Shares fell 3.95p to a multi-year low of 59.5p, down 25% this year.
FTSE 100 maintains progress, WH Smith shares slide
08:23 , Graeme EvansWH Smith shares have slumped 29% after the travel-focused retailer disclosed a £30 million overstatement of profits in its North America division.
The FTSE 250-listed group, which made the discovery ahead of results for the year to 31 August, fell 320p to a multi-year low of 790p.
The FTSE 100 index is up 6.60 points at 9294.74, having set an intraday record of 9301.52 in the opening moments of trading.
A return to BAE Systems and Rolls-Royce after selling earlier in the week helped the top flight, with their shares up 31p to 1758p and 15.5p to 1041.5p respectively.
Ex-dividend stocks Legal & General, Imperial Brands and Entain featured at the top of the fallers board.
Among other fallers in the FTSE 250, recruitment firm Hays dropped 3.6p to 59.9p following the release of annual results.
Premier Foods acquires Merchant Gourmet
07:39 , Graeme EvansPremier Foods today announced the acquisition of ready-to-eat pulses and grains business Merchant Gourmet for an enterprise value of £48 million.
The FTSE 250-listed owner of brands including Ambrosia, Batchelors, Bisto, Mr Kipling and Oxo said the acquisition met growing demand for premium, healthy and convenient meal options.
The deal follows the acquisitions of The Spice Tailor in July 2022 and FUEL10K in October 2023, which Premier said have grown by double-digits every year since being taken over.
Merchant Gourmet, which was founded in 1995, is forecast to generate revenues of about £28 million in the year to next March.
Public borrowing undershoots as tax receipts rise
07:28 , Graeme EvansPublic sector borrowing in the tax receipt month of July today came in below expectations at £1.1 billion, ONS figures showed today.
The fall from £3.4 billion the year before represented the lowest figure in three years and compared with the £2.1 billion forecast in March by the Office for Budget Responsibility. The City had predicted £2.6 billion.
Self-assessed income tax receipts in July were £15.5 billion, £2.7 billion more than in July 2024.
Borrowing in the financial year to July was £60 billion, which is £6.7 billion more than in the same four-month period of 2024 and the third-highest April to July borrowing since monthly records began, after those of 2020 and 2021.
The cumulative current budget - borrowing to fund day-to-day public sector activities - stands at £42.8 billion, which is £5.4 billion more than in the same four-month period of 2024.
Capital Economics said today’s release does little to brighten the gloomy outlook ahead of the Budget later this year.
The consultancy said: “The government’s u-turns on spending cuts and potential upward revisions to the OBR’s borrowing forecasts mean the Chancellor may need to raise £17-27 billion at the Autumn Budget to maintain the £9.9 billion of headroom against her fiscal mandate.”
WH Smith cuts guidance after profit overstatement
07:15 , Graeme EvansWH Smith today issued a profit warning after it said it had identified an overstatement of around £30 million in its North America business.
The accounting error relates to the accelerated recognition of supplier income, which the group receives in the form of incentives and discounts.
The group has instructed Deloitte to undertake an independent and comprehensive review.
WHSmith now expects headline trading profit from the North America division for the financial year ending 31 August to be approximately £25 million, down from previous market expectations of about £55 million..
Group headline profit before tax and non-underlying items will be in the region of £110 million. which compares with earlier City forecasts of £157 million.
Shares fell 398p to 712p, leaving the retailer back where it was in the early days of the pandemic in March 2020.
The company is now a global travel retail business, having sold its UK high street operation to Modella Capital earlier this summer.
FTSE 100 in record territory, Nasdaq down 0.7%
07:14 , Graeme EvansThe FTSE 100 index is set for a session of consolidation after rising 1% yesterday to close at a record high of 9288.14.
A rotation towards defensive sectors benefited London’s top flight, which peaked at 9301.19 earlier in the day. IG Index futures point to a steady start at today’s opening bell.
On Wall Street, the tech-focused Nasdaq recorded another session in the red with a decline of 0.7%.
Nvidia recovered from earlier weakness to finish near its opening mark, while Palantir Technologies followed Tuesday’s 9% fall with a 1% reverse.
The S&P 500 fell 0.2% and the Dow Jones Industrial Average finished broadly unchanged.
