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FTSE 100 Live: London stocks dip as Frasers tumbles, Vodafone-Three merger approved

Published 05/12/2024, 08:14
Updated 05/12/2024, 08:40
© Reuters FTSE 100 Live: London stocks dip as Frasers tumbles, Vodafone-Three merger approved
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Proactive Investors - 8.13am: FTSE dips, Frasers flops

The FTSE 100 has started Thursday's trading slightly lower, down four points at 8,332.

A big early faller was Frasers Group PLC (LSE:FRAS), down almost 15% after the Sports Direct (LON:FRAS), Slazenger and Sofa.com owner cut its full-year profit guidance.

The retailer said "both ahead of and after the recent Budget, consumer confidence has weakened and recent trading conditions have been tougher".

Other fallers include British Land (LON:BLND), down 4%, as it is one of four blue-chips going ex-dividend today, as well as Next PLC (LON:NXT), Intermediate Capital Group (LON:ICGIN) PLC and LondonMetric (LON:LMPL) Property.

Vodafone shares are up 0.6% after the Three merger was apporoved by the CMA>

7.58am: Frasers lowers outlook

Mike Ashley's Frasers Group PLC (LSE:FRAS) has posted results showing a small fall in half-year profits and a lowered outlook for the full year, blaming weaker consumer confidence and tougher recent trading conditions since the Budget.

The Sports Direct owner reported Adjusted profit before tax came in at £299.20 million for the 26 weeks ending 27 October, down 1.5% versus a year ago, as revenues fell 8.3% to £2.54 billion.

Even though the retailer achieved £74.70 million in cost savings and synergies from automation and integration of acquisitions, retail gross margins improved only marginally and other operating costs increased.

Full-year adjusted PBT is now seen in the range of £550 million to £600 million, with "at least £50 million of incremental costs" going into the 2026 financial year as a result of the recent Budget.

7.44am: Shell and Equinor to merge UK offshore arms

In more merger news, Shell PLC (LSE:LON:SHEL, NYSE:SHEL) and Equinor Equinor ASA have agreed to combine their UK offshore businesses to form a new company which will be the UK North Sea’s biggest independent producer.

Merging oil & gas assets and staff, the incorporated joint venture will be set up "to sustain domestic oil and gas production and security of energy supply in the UK", the pair said.

On completion, Shell and Equinor will both own a 50% stake.

"With the once prolific basin now maturing and production naturally declining, the combination of portfolios and expertise will allow continued economic recovery of this vital UK resource. The new company will be more agile, focused, cost-competitive and strategically well positioned to maximise the value of its combined portfolios on the UK continental shelf," they said.

7.29am: Vodafone-Three merger approved

The CMA says it has approved the merger of the UK mobile networks of Vodafone and Three is based on legally binding commitments to invest £11 billion over the next eight year, cap certain tariffs for three years and give virtual mobile providers access to pre-set wholesale prices and contract terms.

After an 18-month review process, the antitrust watchdog green-lit the deal on the basis of these terms, with the investment to be overseen by both Ofcom and the CMA, with the merged company also required to publish an annual report setting out its progress on the implementation of the network plan

Vodafone boss Margherita Della Valle said the merger "creates a new force in UK mobile, unleashing more competition and investment to transform the UK telecoms landscape", with £11 billion of investment committed to building "the UK's biggest and best network" over the next eight years.

The new network will reach 99% of the population and benefit over 50 million customers, the companies said, and use no public funding.

The merger is expected to formally complete during the first half of 2025.

7.16am: FTSE 100 called lower

The FTSE 100 has been called lower again on Thursday, despite gains being made for US and European markets.

Futures markets had the London benchmark falling 12 points, reducing the index further after it fell almost 24 points the day before to 8,335.8.

There could be a boost from news this morning that the UK's Competition and Markets Authority has approved the merger of Vodafone Group PLC (LSE:LON:VOD) and Three to create an £11 billion mobile network. More on that in a moment.

Overnight, Wall Street set new record highs across the board, with the Nasdaq jumping 1.3%, the Dow Jones rising 0.7% and the S&P 500 gaining 0.6%.

Asian markets are mixed, but mainly in the green, with the Hang Seng the exception, down 1.1%.

5am: What to watch out for today

Balfour, Watches of Switzerland, DS Smith and AJ Bell (LON:AJBA) are among those in line to report on a busier Thursday diary.

Will Balfour Beatty (LON:BALF) offer any guidance on yet another buyback... Read more

Watches of Switzerland is set to face continued pressure on persistent luxury sector headwinds... Read more

Announcements due:

Trading updates: Balfour Beatty plc

Interims: Baltic Classifieds Group PLC, Carclo PLC, Sdi Group PLC, DS Smith PLC (LON:SMDS), Watches of Switzerland Group PLC (LON:WOSG)

Finals: AJ Bell PLC, Future PLC (LON:FUTR)

US earnings: Signet Jewelers Ltd, CleanSpark (NASDAQ:CLSK) Inc, Docusign (NASDAQ:DOCU) Inc, Hewlett Packard Enterprise Co (NYSE:HPE), Lululemon Athletica (NASDAQ:LULU) Inc, UiPath (NYSE:PATH) Inc

AGMs: Doric Nimrod Air Three Ltd, Doric Nimrod Air Two Ltd, Gabelli Merger Plus Trust PLC, Global Petroleum, New Star Investment Trust PLC, Solgold PLC, Volta Finance Ltd, YouGov (LON:YOU) PLC, Zanaga Iron Ore Company Ltd

Economic announcements: PMI Construction (UK), Continuing Claims (US), Initial Jobless Claims (US), ISM Services (US)

Ex-dividends to reduce FTSE 100 by: 1.17

Read more on Proactive Investors UK

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