Proactive Investors -
- Blue chips down 10 points to 8,099
- Imperial Brands' results impress
- Mulberry losses widen
9.37am: Nestle (NS:NEST) to spin out fancy waters
Across the Channel, Nestle S.A. (LON:0QR4) (OTC:NSRGF, VTX:NESN) has announced plans to spin out Perrier and San Pellegrino in a $2.8 billion cost drive.
New chief executive Laurent Friexe unveiled the plans at a capital market day as part of a strategy that will double organic sales growth to 4% from 2% currently.
Nestle intends to turn the taps on advertising and marketing spend to achieve this goal.
"Our action plan will also improve the way we operate, making us more efficient, responsive and agile," Freixe said in a statement, adding the focus will be on core brands such as Kit Kat, Nescafe and Maggi.
Nestle S.A. (OTC:NSRGF, VTX:NESN)es fell 1.4% this morning.
9.21am: Diploma (LON:DPLM) leads footsie losers
Diploma PLC (LSE:DPLM)’s share price has taken a hit following the FTSE 100 distributor’s preliminary results.
Total (EPA:TTEF) revenues increased 14% year on year to £1.36 billion, which was below to £1.4 billion consensus market estimate.
Nonetheless, Diploma proposed a full-year dividend of 59.3p, marking a 5% annual increase, reflecting a strong cash position.
Diploma is guiding towards organic revenue growth of around 6%, plus an extra 2% from acquisitions.
The wider FTSE 100 index has taken a downward turn. After trending in the green for the first hour, the index is down 10 points to 8,099.
9.04am: The morning so far
The FTSE 100 sprang into life with a 30-point gain to 8,140 this morning, although it has since climbed back to 8,126 at the time of writing.
Tobacco giant Imperial Brands is one of the morning’s biggest risers with a 1.8% gain in its share price.
This follows Imperial’s annual results, which featured a 4.5% dividend hike and 4.6% improvement in adjusted operating profits.
BT Group PLC (LSE:LON:BT.A) is the morning’s biggest riser with a 2.9% gain, followed by energy and healthcare holding company DCC PLC (LSE:LON:DCC).
British Airways’ parent company International Consolidated Airlines Group (LON:ICAG) SA (LSE:IAG) fell 1.6% following news the IT outages caused mass flight delays overnight.
The party is over at aerospace manufacturing firm Melrose Industries (LON:MRON) PLC (LSE:MRO, OTC:MLSPF). The company’s share price has retreated by 2.4% following a bumper 7% post-results rally on Monday.
Other major fallers include Diploma PLC (LSE:DPLM), which is down 3.8% following its preliminary results; Informa PLC (LSE:LON:INF), which is down 2.1%; and B&M European Value Retail SA (LSE:BME), which is down 0.9%.
Outside of the FTSE 100, British luxury icon Mulberry Group (AIM:LON:MUL) plc flopped another 14.4% to bring year-to-date losses above 38%.
Mulberry delivered a worrying set of half-year results highlighting the challenges the British label is facing in a time of plummeting global luxury spending.
Chief executive Andrea Baldo Baldo hinted at headcount reductions to help stem ongoing losses: "In response to current market conditions, we have taken decisive steps to streamline operations, improve margins, reduce working capital, and strengthen our cash position.”
8.42am: UK retailers rally against Reeves’ Budget
Major UK retailers have warned that rising costs and tax increases from the Budget will lead to job losses, shop closures, and price hikes.
In a letter to Chancellor Rachel Reeves, 79 signatories, including the British Retail Consortium (BRC), urged the government to reconsider measures they say will add £7 billion in costs next year.
From April next year, businesses face higher National Insurance Contributions (NICs), with rates rising from 13.8% to 15% and thresholds lowered.
This, combined with a minimum wage increase, will cost retailers £5 billion annually, according to the BRC. A packaging levy, starting in 2025, is expected to add another £2 billion.
Retailers, including Tesco (LON:TSCO), Sainsbury (LON:SBRY) and Next (LON:NXT), argue these changes will hurt profit margins and drive inflation.
The letter states: “We appreciate Government’s focus on improving the fiscal situation and investing in public services; we also recognise the role businesses have in supporting this.
“But, the sheer scale of new costs and the speed with which they occur create a cumulative burden that will make job losses inevitable, and higher prices a certainty.”
Despite mounting industry pleas, Labour has taken a hard-line approach to the Budget.
Prime Minister Keir Starmer stated this weekend: “Make no mistake, I will defend our decisions in the Budget all day long. I will defend facing up to the harsh light of fiscal reality.”
8.29am: British Airways IT failure leads to travel chaos
A “technical issue” in British Airways’ IT system has led to a chaotic 12 hours for passengers travelling through Heathrow.
Thousands of ticket holders faced delays and disruption throughout Monday evening and this morning, although BA has stated that no flights have been cancelled.
Travel reporter Simon Calder posted rolling updates on Twitter/X.
“British Airways IT system failure is causing delays of 1-2 hours on many BA flights this evening. Trying to contact the airline to find out more,” he Tweeted at around 8pm on Monday.
British Airways responded at around 6am this morning: "Our teams worked hard to resolve an issue we experienced for a short time. We’ve apologised to customers for delays to their flights and ensured they were able to reach their destinations as planned."
British Airways IT failure now resolved.Airline says: "Our teams worked hard to resolve an issue we experienced for a short time. We’ve apologised to customers for delays to their flights and ensured they were able to reach their destinations as planned."https://t.co/NNpIAUs4AU
— Simon Calder (@SimonCalder) November 19, 2024
8.22am: Stocks well bid
The FTSE 100 opened in the green this Tuesday, with the blue-chip index currently trading 28 points higher at 8,137.
Top morning risers include Imperial Brands PLC (LSE:LON:IMB), which is up 2.9% following its latest results; BT Group PLC (LSE:BT.A), which is up 2.2%; and Croda International PLC (LSE:LON:CRDA), which is up 1.9%.
8.05am: Mulberry hints at job losses as revenues plummet at iconic British label
Mulberry plc has delivered a worrying set of half-year results that have highlighted the challenges the British label is facing in a time of plummeting global luxury spending.
Right off the bat from rejecting numerous takeover advances from Frasers Group PLC (LSE:LON:FRAS), Mulberry has reported a year-on-year 19% decline in revenue to £56.1 million on a margin nearly 400 basis points smaller than last year.
The group posted a pre-tax loss of £15.7 million, widening from the £12.8 million loss recorded in the prior year.
Chief executive Andrea Baldo did not gloss over the challenges Mulberry is contending with.
“The first half results illustrate the clear need to reprioritise and rebuild the business,” he told shareholders, adding: "There is no question that our industry is facing a period of significant uncertainty, driven by a challenging and volatile macroeconomic environment that is impacting consumer confidence in several markets, particularly in our home country.”
Baldo hinted at headcount reductions to help stem ongoing losses: "In response to current market conditions, we have taken decisive steps to streamline operations, improve margins, reduce working capital, and strengthen our cash position.
“This has also meant reviewing our internal team structure to ensure we become a leaner, more agile organisation.”
7.36am: Imperial Brands reduces non-cigarette losses
Tobacco giant Imperial Brands PLC (LSE:IMB)’s net revenue across all product lines fell 0.2% to £32.4 billion in 2024, mirroring the 0.2% decline reported in 2023.
Adjusted operating profit grew by 4.5% to £3.5 billion, compared to the 3.8% growth delivered in 2023.
Imperial’s next-generation products (NGPs) segment, which covers vapes, tobacco pouches and other non-cigarette products, continues to be unprofitable, but they are becoming a larger portion of sales.
In 2024, NGPs made up 8% of total sales while delivering a £79 million operating loss- this marks a 43% improvement in losses compared to the previous year.
Income investors will be pleased with the results regardless. Imperial Brands increased the dividend by 4.5% to 154.42p.
£2.8 billion worth of shareholder returns are scheduled for the current year via dividends and buybacks.
7.27am: FTSE 100 to surge
The FTSE 100 is expected to surge by 32 points when markets open today, bringing the blue-chip index up to 8,135.
It follows a positive trading session on Monday, when the FTSE 100 closed 45% higher.
All eyes will be on the reaction to Imperial Brands PLC (LSE:IMB)’s latest earnings.
5am: Morning preview
Tuesday brings updates from the likes of Imperial Brands, Revolution Beauty and Mothercare in London, alongside Walmart (NYSE:WMT) from across the Atlantic.
Imperial Brands previously warned against an overarching vape ban, so any thoughts on the government's move will be eyed... Read more
Announcements due:
Interims: Calnex Solutions PLC, CML Microsystems Plc, GB Group PLC, Gear4music Holdings PLC, Manolete Partners PLC, Mothercare PLC (LON:MTC), Revolution Beauty Group PLC, Trifast PLC, Vianet Group PLC
Finals: Avon Technologies PLC, Imperial Brands PLC (LSE:IMB), Diploma PLC (LSE:DPLM)
US earnings: Xpeng Inc (NYSE:XPEV), Walmart Inc, Medtronic PLC (BVMF:MDTC34)
AGMs: Abingdon Health PLC, Bradda Head Lithium (LON:BHL) Ltd, Berkeley (LON:BKGH) Energia Ltd, Fonix Mobile PLC, Mothercare PLC, Mulberry Group (AIM:MUL) PLC, Physiomics (LON:PYSM) PLC
Economic announcements: Consumer Price Index (EU)