FTSE 100 Live Thursday
- Shell beats forecasts
- Next extends strong run
- Rolls-Royce rallies on upgrade
Market update: Rolls-Royce and Shell lift FTSE 100, miners slide
10:18 , Graeme EvansRed hot Rolls-Royce and the latest strong performance by Shell today fuelled another FTSE 100 index record during a packed session for corporate earnings.
Another profit upgrade by Next and the takeover of a FTSE 250 company at a 75% premium were among other highlights.
The FTSE 100 index climbed as high as 9183.85 but the impact of sharply lower mining stocks including Rio Tinto later cut the rise to 32.35 points at 9169.18.
The overall mood was helped by expectations of a strong session on Wall Street after forecast-beating results by Microsoft and Facebook owner Meta Platforms.
The tech giants are among the three largest holdings of Polar Capital Technology Trust, which rose 3% or 11.3p to 404.3p in the FTSE 100.
London’s best stock was Rolls-Royce, which continued its remarkable surge from 100p at the start of 2023 by jumping another 9% or 87p to 1075p.
The engines giant, which is now worth more than £90 billion as the fifth largest company in the FTSE 100, smashed City forecasts with a 50% increase in half-year underlying operating profit to £1.7 billion.
The performance, which was driven by the civil aerospace division, meant another upgrade to 2025 guidance on profit and free cash flow. The dividend of 4.5p a share was also much higher than the 3p expected.
Shell was another factor in the robust performance of the FTSE 100 after it posted a smaller-than-expected 24% fall in adjusted earnings to $4.3 billion (£3.2 billion).
Cost savings offset lower oil prices during the period as cash flow from operations jumped 29% over the first three months of the year to $11.9 billion (£9 billion).
This underpinned another $3.5 billion of share buybacks for the next three months - the 15th consecutive quarter above $3 billion.
The shares rose 2% or 48p to 2597p, whereas BP drifted 0.65p to 404.7p.
Other stocks on the risers board included Rentokil Initial after half-year results boosted confidence following a challenging period for the pest control business.
It said sales and marketing initiatives in North America were starting to have an impact, with organic revenue growth of 1.4% in the second quarter up from 0.7% in the first quarter.
The company reiterated guidance for the full year, helping shares to rally 6% or 19.1p to 365.7p.
On the fallers board, the shares of retailer Next failed to hold the initial gains seen after another upgrade to profit guidance.
Full price sales rose 10.5% versus last year, up from the 6.5% forecast as UK trading benefited from the warm weather and disruption at Marks & Spencer. The shares fell 95p to 12,180p, having risen by 25% so far this year.
The mining sector dragged on the top flight after details of President Trump’s exemptions on copper tariffs caused the metal’s price to slide 18% yesterday and another 5% today.
Copper-focused Antofagasta fell 5% or 94.5p to 1900p, while Glencore lost 4% or 12.8p to 298.9p and Rio Tinto eased 171p to 4417p.
Other fallers included London Stock Exchange, which dropped back 405p to 9650p despite upgrading margin guidance in half-year results.
In the FTSE 250 index, another big takeover deal helped the mid-cap benchmark to improve by 0.8% or 172.50 points to 21,949.08.
Just Group jumped 68% or 85.5p to 211.5p after the pension de-risking business backed a 220p-a-share or £2.4 billion takeover deal with Canada’s Brookfield.
Professional services business JTC surged 12% or 101p to 923p after it announced the £20 million acquisition of Kleinwort Hambros Trust Company, which provides trust and estate planning services to ultra and high net worth individuals,
Power station operator Drax and speciality chemicals business Elementis also rose by 4% and 6% respectively following their half-year results.
However, weaker profit guidance due to testing retail market conditions meant Pets at Home shares fell 9.4p to 234p.
Pets at Home cuts guidance amid tough conditions
10:10 , Graeme EvansPets at Home is braced for a fall in annual profits after seeing no improvement in retail trading conditions.
The chain cut its guidance for 2025-26 as it struggles against a “subdued market backdrop and uncertain consumer environment”.
It reported a 3% drop in like-for-like retail sales over the 16 weeks to July 17, marking the third quarter in a row of falling sales.
Pets said that with market growth expected to be just 1% against the 2% forecast, it now expects annual profits to fall to between £110 million and £120 million.
The shares fell 9.4p to 234p.
FTSE 250 up 0.8%, Pets at Home down 3% after update
09:08 , Graeme EvansThe FTSE 250 index is led by Just Group after the shares of pension de-risking business jumped 67% on its £2.4 billion takeover deal with Canada’s Brookfield.
The rise of 85.5p to 211.5p compared with the bid price of 220p a share.
Power station operator Drax and speciality chemicals business Elementis are up 6% and 5% respectively following their half-year results.
Professional services business JTC surged 12% or 101p to 923p after it announced the £20 million acquisition of Kleinwort Hambros Trust Company, which provides trust and estate planning services to ultra and high net worth individuals.
The FTSE 250 index improved 0.8% or 180.20 points to 21,956.78, with FirstGroup and Trustpilot among the other risers following gains of about 2%.
On the fallers board, Pets at Home dropped 3% or 7.4p to 236p after it reported a 3% decline in retail like-for-like sales for the quarter to 17 July.
It highlighted a subdued market backdrop, which means underlying profit for the year will be in a range of £110 million-£120 million.
FTSE 100 sets new record, Rolls-Royce up another 9%
08:31 , Graeme EvansRolls-Royce shares have jumped 9%, up 91p to 1079p after the engines giant gave another lift to guidance. The shares were 100p at the start of 2023.
Shell rose 3% or 61p to 2740p as its second quarter earnings beat City forecasts and it pledged to buy back another $3.5 billion of its shares.
Other strong performers included Rentokil Initial, which jumped 11% or 37.7p to 384.3p after its half-year results and unchanged guidance reassured investors.
Next shares failed to benefit from today’s latest upgrade profit guidance, with shares up by less than 1% or 100p at 12,375p.
On the fallers board, Antofagasta slumped 7% and Anglo American fell by 5% in response to a tariffs-led slide in the price of copper over the past 24 hours.
The FTSE 100 index recovered from a weak start to stand 0.5% or 43.64 points higher at a record 9180.58 .
FTSE 250 firm backs £2.4bn takeover
08:16 , Graeme EvansFTSE 250-listed financial services business Just Group has agreed a £2.4 billion takeover by Canadian investment giant Brookfield.
The board of the Reigate-based business, which specialises in taking over employee pension schemes, has recommended a 220p a share offer from Brookfield’s financial services arm Brookfield Wealth Solutions (BWS).
This represents a 75% premium to the closing price of 126p yesterday afternoon. It is also 54% higher than the average of 143p over the past six months.
Just Group was formed through the merger of Just Retirement and Partnership Assurance in April 2016. It currently manages more than £27 billion of pension savings on behalf of 700,000 customers.
The deal will add to Brookfield’s huge portfolio of UK assets, which include Center Parcs, Checkatrade, and a 22% share in Canary Wharf Group.
BWS was spun out in 2021 and has its shares quoted on the New York and Toronto stock exchanges.
Wall Street lifted by Microsoft and Meta results
07:58 , Graeme EvansThe S&P 500 index is seen lifting 1% and the Nasdaq by 1.5% after tech sector sentiment was boosted by Microsoft and Facebook owner Meta Platforms.
Microsoft shares are set to open about 8% higher after quarterly figures beat Wall Street hopes thanks to AI-led growth in its Azure cloud computing division.
Meta Platforms rose 11% in extended hours after it earlier reported quarterly revenues of $47.5 billion and earnings per share well ahead of hopes at $7.14.
Hargreaves Lansdown analyst Matt Britzman said: “Pick your metric and Meta crushed it, from ad revenue growth to daily users, all the way down to the profit lines.
“AI is clearly delivering real-world benefits for advertisers, and they’re willing to pay more as a result. Average price per ad was up 9% over the quarter, a clear indication that Meta is delivering an improved product for both users and advertisers.”
Shell earnings beat forecasts, announces $3.5bn buyback
07:29 , Graeme EvansOil giant Shell today announced another $3.5 billion of share buybacks for the next three months - the 15th consecutive quarter above $3 billion.
The latest return was announced alongside second quarter results showing a smaller-than-expected 24% quarter-on-quarter fall in adjusted earnings to $4.3 billion (£3.2 billion).
Cash flow from operations rose 29% over the first three months of the year to $11.9 billion (£9 billion). The improvement, which follows $3.9 billion of cost reductions since 2022, came despite a period of lower oil prices.
Chief executive Wael Sawan said: "Shell generated robust cash flows reflecting strong operational performance in a less favourable macro environment.
“We continued to deliver on our strategy by enhancing our deep-water portfolio in Nigeria and Brazil, and achieved a key milestone by shipping the first cargo from LNG Canada.”
Next sales get weather boost, lifts profit guidance
07:15 , Graeme EvansNext today gave another lift to its profits guidance after reporting a stronger-than-expected sales performance in the second quarter to 26 July.
Full price sales rose 10.5% versus last year, some £49 million ahead of its previous estimate for growth in the period of 6.5%.
The outperformance in the UK follows better than expected weather and trading disruption at rival Marks & Spencer.
International sales grew faster than expected, mainly because digital marketing proved more effective than anticipated.
The company increased its guidance for full price sales in the second half from 3.5% to 4.5%. This adds a further £27 million to its forecast.
It has lifted full year guidance for pre-tax profit by £25 million to £1.105 billion.
Rolls-Royce lifts guidance after strong half year
07:07 , Graeme EvansRolls-Royce today lifted full year guidance after reporting a 50% increase in underlying operating profit to £1.7 billion for the first six months.
The engines giant now expects £3.1 billion-£3.2 billion of underlying operating profit and free cash flow in the range £3 billion and £3.1 billion.
It intends to pay an interim dividend of 4.5p share in September.
Chief executive Tufan Erginbilgic said: "Our multi-year transformation continues to deliver.
“Our actions led to strong first half year results, despite the challenges of the supply chain and tariffs. We are continuing to expand the earnings and cash potential of Rolls-Royce.”
FTSE 100 seen flat, Microsoft shares jump
06:57 , Graeme EvansForecast-beating results by Microsoft and Facebook owner Meta Platforms last night lifted their shares 8% and 11% respectively in extended hours dealings.
The S&P 500 index earlier finished slightly lower after the Federal Reserve left interest rates in the range of 4.25-4.5% for the fifth meeting in a row.
Prior to the decision, the FTSE 100 index closed flat at 9136.94 after HSBC shares fell 5% and GSK rose 5% amid the latest round of corporate results.
Futures trading for London’s top flight points to little movement at today’s opening bell.
In Asia, the Nikkei 225 has risen by 1% while the Hang Seng index is down by 1.4%.
