FTSE 100 Live: Wages squeeze continues as unemployment rate dips, Vodafone results

FTSE 100 live
FTSE 100 live
Evening Standard
City Staff18 May 2022

Earnings are continuing to fall sharply in real terms amid surging living costs, figures from the UK jobs market showed today.

The March unemployment rate edged down to 3.7% and the Office for National Statistics said job vacancies outstripped the number of unemployed people for the first time.

Bonuses in construction and finance mean that total pay is growing faster than prices on average at 7%, but underlying regular earnings are continuing to fall sharply in real terms after annual growth in January to March of 4.2%.

Live updates

17 May 2022

US retail sales hold steady despite pressure from inflation

US retail sales grew at a steady rate in April, suggesting demand for goods remains resilient despite rampant inflation.

The value of overall retail purchases increased 0.9%, after a 1.4% gain in March, according to Commerce Department figures released on Tuesday.

Excluding vehicles and petrol stations, sales rose 1% last month.

Andrew Grantham, an economist at Canadian Imperial Bank of Commerce, said: “While the increase will look less impressive after taking price movements into account, today’s data still suggests that the squeeze on household incomes from inflationary pressures isn’t yet having a material impact on discretionary spending.”

In the markets, the Dow Jones opened 204 points higher at 32,427, while the S&P 500 opened 44 higher at 4,052. The Nasdaq Composite also gained 64 points at the opening bell.

Here are the headlines this afternoon:

17 May 2022

The FTSE 100 is up 68.6 points this lunchtime, at 7,533.37, as investors reacted positively to news that the UK unemployment rate has dropped to 3.7% in the first three months of the year, its lowest level since 1974.

Imperial Brands is still leading the gainers, up 7.94% today on the back of better-than-expected results for the half year.

In the FTSE 250, Contour Global shares are still up an astonishing 32.37% to 256p after the company announced it had been bought by US private equity firm KKR for 263.6p a share.

The German Dax is up 1.5%, while the French CAC has risen 1.3% during the morning’s trading.

Meanwhile, the pound is worth almost $1.25 and €1.19.

Here are the top stories from this morning:

17 May 2022

Elon Musk says Twitter takeover ‘cannot move forward’ until bot numbers verified

Elon Musk has stoked speculation he may walk away from his $44 billion deal to buy Twitter after tweeting he would not proceed until he had proof that fewer than 5% of accounts on Twitter were fake or spam.

The billionaire tweeted: “My offer was based on Twitter’s SEC filings being accurate. Yesterday, Twitter’s CEO publicly refused to show proof of (less than) 5%. This deal cannot move forward until he does.”

In a statement, Twitter said it was “committed to completing the transaction on the agreed price and terms as promptly as practicable.”

17 May 2022

High-end London offices still in demand despite hybrid working

Companies have been snapping up new high-end office space at record levels, according to the boss of Landsec, as the great return to the office continues.

The company reported leasing deals for central London office worth £63 million in the year to 31 March at average let prices 4% higher than valuers had predicted.

Overall, Landsec’s offices are now 95.3% full, the company said.

17 May 2022

London ‘buy now, pay later’ startup Zilch heads to Miami

A London “buy now, pay later” start-up is opening up in Miami as the fintech tries to crack America.

Zilch plans to recruit 100 new employees for the new office, its first in the US.

CEO Philip Belamant said: “With the cost of living going up, and with people paying billions of dollars in fees and interest, we think it’s the perfect time to us to launch a product like ours which eliminates those costs for customers but provides the same benefits.”

17 May 2022

Sir Martin Sorrell back making deals

Sir Martin Sorrell continues to strike deals at a rate of knots despite questions being raised about the speed of expansion at his new business, S4 Capital.

S4’s operating company Media.Monks today announced a merger with US digital marketing agency TheoremOne. The LA-based business works with brands like American Express, AT&T, Intel and Starbucks, and had revenues of $58 million last year. Financial terms weren’t disclosed.

Sorrell said TheoremOne was “a great fit” for S4.

The merger is the first deal announced since the publication of S4’s delayed accounts a little over a week ago. Accounts were delayed after auditors asked for more time to check the numbers. S4 struck around a deal a month last year and reports suggest its rapid growth created problems when it came to drawing up the annual results. Shares have halved since the start of the year.

Analysts at Peel Hunt said: “Our understanding is that the deal was struck prior

to the results being delayed.”

The deal could provide an immediate boost to earnings, Peel Hunt said, adding: “With the price down so much since the start of the year, the shares look attractive.”

S4 gained 8.6p, or 3%, to 294p.

17 May 2022

Imperial Brands leads FTSE 100 surge, Victorian Plumbing recovers

Income-hunting investors were unable to kick their tobacco habit today as Imperial Brands showed its appeal as a hedge against inflation.

The Bristol-based maker of JPS, Gauloises and vaping brand blu reported half-year earnings and margins ahead of City expectations, while strong cash generation led to a 1% rise in interim dividend to 42.54p a share.

Shares in Imperial, which trades with a forward dividend yield above 8%, surged 6% or 101p to 1813.5p amid further progress in the roll-out of next generation products.

AJ Bell’s investment director Russ Mould said: “The cigarette makers are proving hard to stub out in an environment where their pricing power and resilient demand provides a useful hedge against inflation.”

Imperial’s rally came in a positive session for the London market, with the FTSE 100 index up 44.37 points to 7509.17 as widely-held Barclays, Prudential and Royal Mail lifted 2%.

The heating oil-to-healthcare conglomerate DCC also gained 3% or 158p to 6426p after its annual results showed a 28th year in a row of dividend growth. The 10% rise to 175.78p a share came as annual operating profits improved 11% to £589.2 million.

Other blue-chip risers included Premier Inn owner Whitbread, which gained 54p to 2701p after Deutsche Bank analysts reiterated their “buy” recommendation and 3800p target.

The FTSE 250 returned above 20,000 after a rise of 216.55 points to 20,140.66, with British Gas owner Centrica up another 3% and Wizz Air 4% higher.

Victorian Plumbing got a boost on AIM after it met expectations with a 5% fall in half-year revenues to £133.9 million. The bathrooms retailer, whose adverts feature Changing Rooms star Laurence Llewellyn-Bowen, listed at 262p last June for a valuation of £850 million but is now at 52p despite today’s 1.6p rise.

17 May 2022

Britvic profits surge as drinks maker confident it will thrive during a downturn

The CEO of soft drink maker Britvic said he expects the company to perform well in a recession, but warned prices across some brands may rise as a result of higher packaging and fruit juice costs.

The maker of Tango and Robinsons squash made profits of £46 million in the six months to March 2022, a 49% increase on the previous year.

Britvic boss Simon Litherland said: “We’re a multi-channel business – if people cut back on drinking out we’ll see a lift in at-home purchases.”

“We haven’t seen any downside at the moment and we remain confident for the future.”

18 May 2022

KKR snaps up UK energy company

KKR has agreed a deal to buy UK-based power generation company Contour Global for around £1.75 billion, adding to its stable of renewable energy companies.

Contour has 138 power plants across 20 countries, with solar, wind and hydro operations, as well as a number run by fossil fuels.

It provides a “compelling platform” for growth, driven by the “changing nature of the energy industry as a result of decarbonisation targets,” KKR said.

The US private equity firm will pay 263.6p a share in cash for the company.

KKR has also recently made a bid for French solar company Albioma SA and Australia’s Spark Infrastructure Group, as the move towards renewable energy sources continues.

Contour’s shares surged 34% at the market open, a record gain, and traded at 258p as of 9am on Tuesday.

17 May 2022

FTSE 100 higher, ContourGlobal surges on KKR offer

The FTSE 100 index is up 0.6%, led by tobacco and vaping business Imperial Brands after its interim results met expectations and included a 1% rise in dividend to 42.54p a share.

The stock surged 6%, or 102p to 1814.5p, returning the Bristol-based company to near the high for the year seen in February.

Other big FTSE 100 risers included the retail-to-oil conglomerate DCC after its full-year results sent shares up 144p to 6412p. BP, Barclays and Prudential were among the widely-held stocks up by around 2% today.

The FTSE 100 index stood 42.80 points higher at 7507.60, with the fallers board led by Vodafone and consumer goods giant Unilever.

The FTSE 250 index returned above 20,000 after a rise of 0.7% or 145.63 points to 20,069.74.

It was led by power generation company ContourGlobal after its board recommended a £1.75 billion takeover offer from private equity firm KKR at a price of 263.6p a share. ContourGlobal’s share price jumped by a third, or 64.6p to 258p.

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