Investors will be hoping for fresh progress this week after the FTSE 100 index closed on Friday at its highest level in a year.
Bets on interest rate cuts by the summer fuelled the advance, with London’s top flight up by more than 2.5%.
DIY chain Kingfisher is in the spotlight today, with its annual profits lower due to weaker trading in France and Poland.
FTSE 100 Live Monday
Mobico takes big hit from German stat changes
07:41 , Daniel O’Boyle
Mobico, formerly known as National Express, has warned its profits will be hit by “unexpected” changes to official German figures used to calculate recovery of energy costs.
The transport firm said its results will be delayed until mid-April as “a number of judgemental items” in its accounts still need to be settled.
Underlying profits £15m lower, and the business will take a £70 million “onerous contract provision” for 2023, plus an additional £25 million for 2022.
Mobico said: “The Group has made an initial assessment of the implications of the revised indices. Whilst it is the Group’s expectation that the models used to calculate the profitability of the German Rail business remain valid, further work is now required to determine the full effect of the revised indices”.
Profits down 22% at B&Q owner Kingfisher
07:36 , Michael Hunter
B&Q and Screwfix owner Kingfisher today revealed lower annual sales and profits amid tough conditions for its operations in France.
Profit before tax fell by over a fifth to £475 million, while sales declined 1.8% to almost £13 billion.
The Home improvement and builders’ merchant chain said sales in the UK and Ireland were “positive” but there was a “more challenging consumer backdrop” on the continent.
Its French business, Castorama, will be at the centre of a new plan to “significantly improve performance and profitability”.
Thierry Garnier, chief executive officer, said: “In France, where the market has been impacted by low consumer confidence, we have made significant adjustments to the cost base and started to embed e-commerce marketplace and trade customer initiatives similar to those successfully implemented in the UK.”
FTSE 100 seen lower after strong week, US rates guidance in focus
07:12 , Graeme Evans
The FTSE 100 index is set for a weaker session after last week’s rise of 2.6% left London’s leading benchmark at its highest level in just over a year.
The improvement in risk appetite reflected optimism on the near term outlook for interest rate cuts by the US Federal Reserve and other central banks.
This mood will be tested in a week of speeches by several US monetary policymakers and release of the central bank’s preferred measure of inflation.
The S&P 500 index rose more than 2% last week but is expected to make a flat start today, while IG Index sees the FTSE 100 falling about 15 points to 7916.
Asia markets have traded in the red, led by a decline of more than 1% for the Nikkei 225 after last week’s record high. The Hang Seng index is down by 0.3%.
Recap: Friday’s top stories
06:42 , Simon Hunt
Good morning from the Standard City desk.
Vodafone knows a thing or two about mergers. The Paddington-based telco still holds the crown for the world’s biggest-ever M&A transaction, acquiring German rival Mannesman in 1999 in a $183 billion deal (double that in today’s money). Elon Musk’s $44 billion Twitter takeover, or Microsoft’s $69 billion purchase of Activision, concluded last year, look puny by comparison.
Back then, Vodafone was one of the most exciting, most valuable companies in the world — not far off the market cap of Microsoft. It was viewed as a tech stock with a big growth story to tell.
Now? Not so much. It’s a smaller, leaner organisation, and shareholders see it as a utility stock — a company with ageing infrastructure, wrestling with the high costs of maintenance and upgrades.
And that forms the rationale behind its latest deal, the proposed £15 billion merger with Three, which the competition watchdog, the CMA, on Friday said would go through its more thorough ‘phase 2’ investigation.
Voda says it can’t afford network improvements without more market share. There are four network operators today — three is the magic number, says CEO Margarita Della Valle. But the CMA fears higher prices and worse customer service could result.
Voda is destined to be emblematic of the UK stock market’s dealmaking chutzpah. If the firm behind the biggest merger failed to get a deal through at home it will ring alarm bells over what has changed and why for a once buccaneering giant and blockbuster City M&A.
Here’s a summary of our other top stories from Friday:
And in City Spy…
