FTSE 100 Closed Lower as UK Policy Continues to Spook Markets

The FTSE 100 on Tuesday closed down 0.5% amid fears that the inflationary impact of U.K. economic policy could push the Bank of England into an emergency rate hike, said Joshua Mahony, IG's senior market analyst. "With Liz Truss and Kwasi Kwarteng under pressure less than a month into their appointment, traders will hope that this provides a stark warning over the need to be fiscally responsible despite the desire spend their way out of this crisis," Mr. Mahony added. The index's top fallers were Rightmove PLC, down 8.9%, SSE PLC, which fell 7.3%, and Taylor Wimpey PLC, down 7.2%.

 
Companies News: 

SSE PLC Sees 1H Adjusted Earnings Per Share Rising; Backs Guidance

SSE PLC said Tuesday that it expects higher adjusted earnings per share for the first half of the fiscal year, and backed its full-year guidance.

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United Utilities Sees Lower 1H Revenue Amid Inflation, Higher Power Prices

United Utilities Group PLC said Tuesday that revenue for both the first half and the full fiscal year ending March 31 are expected to be lower on year amid the inflationary environment and higher power prices.

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UK Regulator to Examine Acquisition of National Grid Stake by Consortium

The U.K. competition regulator said Tuesday that it is considering whether the acquisition of a 60% shareholding in National Grid PLC by Macquarie Infrastructure and Real Assets (Europe) Ltd. and British Columbia Investment Management Corp. could lessen competition.

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Weir Group Backs 2022 Views, Targets Operating-Margin Growth

Weir Group PLC said Tuesday that is taking initiatives to increase operating margins beyond 2023, and backed its guidance for the full year.

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Saga Swung to 1H Pretax Loss; Lowers Full-Year Profit Guidance

Saga PLC said Tuesday that it swung to a first-half pretax loss despite higher revenue on a one-off impairment of assets, and that it cut full-year expectations.

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SSP to Report Around GBP2.17Bln in Sales for FY 2022 as Passenger Numbers Recover

SSP Group PLC said Tuesday that it expects to report sales of around 2.17 billion pounds ($2.32 billion) for fiscal 2022 as passenger numbers continue to recover, and that it remains confident in the continuing resilience of its business model.

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Biffa Agrees to GBP1.3 Bln Offer by ECP, Lower than Previously Indicated

Biffa PLC said Tuesday that it has agreed to a 1.3 billion-pound ($1.39 billion) takeover by Bears Bidco Ltd., a new company formed and controlled by ECP V, LLC, slightly lower than the price indicated on June 7.

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Card Factory Swung to 1H Pretax Profit as Customer Spending Normalized

Card Factory PLC reported on Tuesday a swing to pretax profit in the first half of fiscal 2023, driven by a return to normal customer spending after the lifting of coronavirus measures.

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Domino's Pizza Group Appoints Elias Diaz Sese as Interim CEO

Domino's Pizza Group PLC said Tuesday that it has appointed Elias Diaz Sese as interim chief executive officer, succeeding Dominic Paul, who is leaving to join FTSE 100-listed hotel-and-restaurant company Whitbread PLC.

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Close Brothers FY 2022 Net Profit Fell on Higher Costs; Raises Dividend

Close Brothers Group PLC said Tuesday that profit for fiscal 2022 fell on higher expenses, but increased its dividend payout.

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AG Barr Warns of Economic Challenges Ahead Despite Good 1H Performance

A.G. Barr PLC said Tuesday that it expects the current economic environment to hurt consumers' purchasing behavior as it reported a rise in pretax profit for the first half of fiscal 2023 on a rise in revenue across all of its core brands.

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First Property Funds Under Management Fell in Early Fiscal 2023

First Property Group PLC said Tuesday that its total funds under management have decreased in fiscal 2023 to date following the sale of several properties.

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Mortgage Advice Bureau 1H Pretax Profit Fell Amid Difficult Macro Environment

Mortgage Advice Bureau (Holdings) PLC said Tuesday that pretax profit for the first half fell amid an increasingly difficult macro environment.

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S&U 1H Pretax Profit Rose; Raises Dividend

S&U PLC said Tuesday that pretax profit for the first half of fiscal 2023 rose on increased revenue and it declared a dividend payout.

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Billington Shares Rise on Higher 1H Pretax Profit, Expectation of 2022 Profit Beating Views

Shares in Billington Holdings PLC rose Tuesday after the company said that its first-half pretax profit rose significantly together with revenue on new business and continued recovery, and that it expects full-year profit to exceed management views.

 
Market Talk: 

TinyBuild Is Highly Undervalued, Peel Hunt Says

0935 GMT - TinyBuild is highly undervalued and is trading at a double-digit discount to its peers, Peel Hunt analysts James Lockyer and Damindu Jayaweera say in a research note. The company's back catalogue gaming revenue bodes well for the second half and the fact that Secret Neighbor is going to online game platform Roblox looks exciting, they say. Elsewhere, releases of new games such as SpiderHeck, Justice Sucks, and Tinykin look reassuring, Lockyer and Jayaweera say. Peel Hunt has a buy rating on the stock with a target price of 200 pence. Shares are up 5.4% at 112.00 pence. ([e-mail])

AG Barr 1H Profit Gains, But Price Rises Cloud Outlook

0927 GMT - Shares in AG Barr drop 1% after the Scottish soft-drink maker said it expected the economic environment to affect consumers even as it reported higher first-half pretax profit, revenue and dividends. Barr is finally seeing momentum after a difficult period during lockdowns, Hargreaves Lansdown says. "The group's continued investment into renowned brands like Irn-Bru is starting to reap rewards, backed up by successful launches of new product lines," HL's Charlie Williams writes. "Barr isn't immune to inflationary pressures, though. Cost management remains a key focus, but recent price hikes have already seen volumes fall and management remains conscious of consumer-spending patterns as incomes get squeezed." ([e-mail])

Virgin Money's Suspension of Mortgage Deals Makes Sense, AJ Bell Says

0909 GMT - Virgin Money's decision to withdraw mortgage ranges for new customers amid sterling volatility means that the lender can recalculate what it needs to charge to still make money, AJ Bell investment director Russ Mould says in a note. The costs increase of long-term borrowing can hit mortgage lenders unless they can push up their own rates, the director says. "Under normal circumstances, mortgage lenders could do this work while still having the full range of products available to customers, but everything is moving at such a rapid pace that banks need to take stock of events and not get caught out," Mould adds. ([e-mail])

Rising Interest Rates Set to Hit UK Housing Market Hard

0906 GMT - The sharp increase in U.K. interest rates, which is priced in by markets, could bring mortgage rates to about 6.6% from 3.6% in August, Capital Economics senior property economist Andrew Wishart says in a note. At the current level of house prices, such an increase would cause the cost of repayments on a new mortgage to rise to their highest level since 1990, he says. "House prices fell by 20% between 1989 and 1992, so if affordability were to deteriorate to the same extent, prices would surely fall by more than the 7% drop that we currently forecast," Wishart says. The Bank of England is unlikely to be that aggressive, but until inflation starts to fall, the housing market may have to be "collateral damage," he says. ([e-mail])

Markets Seen Overreacting to UK Government's Economic Policy

0853 GMT - The negative market reaction over the U.K.'s government economic growth plan looks overdone, Berenberg's senior economist Kallum Pickering says in a note. Higher deficits justify higher yields and a lower exchange rate, but the U.K. remains a solid advanced economy, doesn't have large external liabilities in a foreign currency and will almost certainly be able repay its debt, he says. However, the U.K. has damaged its once strong credibility with a poorly managed Brexit and threats of a U.K.-EU trade war, Pickering says. "Once upon a time, markets may have been excited by the prospect of the U.K. cutting taxes and deregulating," he says. "Today markets just see a government... pursuing a last-ditch attempt to try and rescue its election chances." ([e-mail])

Turmoil on UK Gilt Market Makes Syndication Unlikely This Week

0846 GMT - The hefty selloff in U.K. gilts in the past few days and market talk of a potential emergency interest rate rise by the Bank of England is likely to scupper the Debt Management Office's plans for a bond syndication this week, Mizuho's analysts say. "What's more certain is that the DMO will be unlikely to go ahead with the syndication they were planning to carry out this week," Mizuho's rates strategist Peter McCallum and rates strategy analyst Evelyne Gomez-Liechti write in a note. Investors sold gilts at a fast pace after Friday's budget revision that resulted in a massive increase in gilt issuance in 2022-2023. The 10-year gilt yield is up about 2 basis points at 4.140%, according to Tradeweb. ([e-mail])

Contact: London NewsPlus; [e-mail]

(END) Dow Jones Newswires

09-27-22 1256ET