BAT, the maker of Lucky Strike cigarettes, has signed an agreement to sell its Russian and Belarusian business. The decision comes 561 days after Russia launched its invasion of Ukraine. The company stated that the deal complies with local and international laws, and that it will not receive any financial gain from ongoing sales in these markets.
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BAT, maker of Lucky Strike, signs deal to sell Russian business after 18 months
Lucky Strike cigarette maker British American Tobacco (BAT) has signed an agreement to withdraw from Russia, 561 days after the country launched its full-scale invasion of Ukraine.
The company, which also makes Dunhill, Kent and Pall Mall, said it has “entered into an agreement to sell its Russian and Belarusian business”, adding that the deal complies with local and international laws.
He promised not to receive any “financial gain from ongoing sales in these markets.”
Funding Circle sees slowdown in demand as interest rates soar
UK small business lender Funding Circle today lamented high interest rates and slow economic growth while posting losses.
The London-based firm reported a 15% drop in its loan book to £3.5bn in the first six months of the year, driven by the repayment of loans taken out by small businesses under the Government Post-Covid Recovery Loan Scheme, while before -Tax losses came to £16.6m, up from a £1.6m profit the year before.
Lending fell 27% in the UK, while its US subsidiary showed signs of growth over the same period. This was partially offset by growth in adoption of its new credit product line, FlexiPay.
Funding Circle said the “UK economic recovery has been slower than we anticipated” as “Base rate increases from the Bank of England… have raised the cost of borrowing for SMEs.”
Chief executive Lisa Jacobs told the Standard: “We are seeing a gap in demand where companies are putting off investment decisions and focusing instead on short-term capital.
“Given all the volatility there has been, it has been a challenge for small businesses to have foresight. I expect that as there is more certainty in the economy, companies will make more long-term investment decisions than they do today.”
Funding Circle shares fell 1.7% to 40 pence.
Melrose shares jump as earnings takeoff
MELROSE today unveiled plans to tighten the screws on arch-rival Rolls Royce as it forecasts £1 billion in annual profit amid an aerospace boom.
With customers trying to catch up post-Covid and new orders pouring in, analysts believe the aerospace trade is poised for a prolonged boom.
Melrose, no longer an aggressive dealmaker, will focus exclusively on his aerospace arm.
That means chief executive Simon Peckham and chief financial officer Geoffrey Martin will step down next year and be replaced by pundits Peter Dilnot and Matthew Gregory.
For the half, Melrose posted a 19% revenue increase to £1.63 billion, while profit rose from £9 million to £134 million.
It plans to buy back a large chunk of the shares and will start in October, earlier than previously planned.
Peckham, after 20 years at Melrose, said: “There will be a huge increase in the aerospace cycle, there is a huge backlog of orders.”
Profits this year will reach £385m and are expected to achieve annual profits of £1bn over the long term. This should take three years and puts it at risk of scrapping with Rolls Royce, for whom it already makes some engine parts.
If it hits those profit targets, the business could be worth £10bn. Today the shares were up 39 pence to 548 pence, valuing the company at £7.4 billion.
Melrose Stock Jumps After Update, Pets at Home Drops 12%
Melrose Industries is the company leading the rise in the FTSE 100 index after aerospace business GKN upgraded its full-year earnings guidance and brought forward the launch of a share buyback program to next month.
The stock rose 7% or 34.6 pence to 543.6 pence, and other industrial beneficiaries include Weir, Rolls-Royce and BAE Systems.
Paper and packaging group Mondi rose 33.5 pence to 1,329.5 pence on hopes of further industry consolidation following last night’s announcement of a partnership between Smurfit Kappa and US-listed WestRock.
Smurfit shares fell 84 pence to 3,134 pence, while the London Stock Exchange fell 190 pence to 8,074 pence after former owners of the Refinitiv data business sold more shares.
The FTSE 100 Index fell 34.27 points to 7,391.87 and the FTSE 250 Index weakened 90.89 points to 18,360.93.
Shares of Direct Line rose 17% after its results, but Pets at Home fell 12% or 46 pence to 332.6 pence after the Competition and Markets Authority announced a review of veterinary services.
Currys shows Nordic progress, but UK is in decline
Currys showed slow signs of progress in getting its troubled business in the Nordics back on track, but a slump in computer sales hit its main UK division.
The fridge-to-phone retail giant said trends in the Nordic region had “improved slightly” in the 17 weeks to August 26. However, the environment “remains challenging.”
But in the UK, sales fell 2% due to “weakness” in its IT division.
“Our priorities this year are simple: keep up the encouraging momentum in the UK and Ireland and get the Nordic countries back on track,” Chief Executive Alex Baldock said. “We are making good progress on both, in what remains a challenging economic environment.” .
“We remain confident that we are building a stronger business that is resilient today and poised to thrive for the long term.”
Shares held steady at 48.7 pence.
Direct Line on £520m worth of commercial insurance sale as half-year losses mount
Direct Line today announced the sale of its commercial insurance brokerage, as the embattled FTSE 250 company reported a widening loss in the first half.
It said the £520m sale would help “restore the strength of its capital position” and provide “a platform to improve performance”. The buyer is RSA Insurance, a subsidiary of Intact Financial.
News of the sale came as Direct Line reported a pre-tax loss of £76.3 million, up from £11.1 million in the same period a year ago.
Last month he named a new chief executive, Adam Winslow, as a permanent replacement for Penny James, who left abruptly in January, two weeks after he issued a profit warning and canceled his dividend.
Earlier this month it pledged to return around £30m to customers it overcharged after the city’s watchdog banned insurers from charging more for renewals than new policies.
Lloyd’s of London returns to profit with ‘bulletproof’ balance sheet
Lloyd’s of London, the world’s largest insurance exchange, returned to profit today, helped by an increase of more than a fifth in gross written premiums.
The 21.9% increase in £29.3bn new insurance business in H1 2023 helped it return to pre-tax profit of £3.9bn vs. to a loss of £1.8 billion in the same period a year ago.
Its managing director, John Neal, described Lloyd’s balance sheet as “bulletproof” and added that it “means we can support clients in a range of crises and scenarios.”
Its total capital increased to £40.8 billion from £40.2 billion.
FTSE 100 falls as oil tops $90 a barrel
The FTSE 100 index’s slump will continue as investors worry about slowing economic activity and the prospect that high oil prices will help keep interest rates higher for longer.
CMC Markets forecasts London’s top notch to open 18 points lower at 7408, after posting three straight sessions in negative territory this week.
The latest downbeat performance follows declines in Wall Street benchmarks, as the S&P 500 lost 0.7% and the Nasdaq fell 1%.
Brent crude is down 0.5% this morning but is still above $90 a barrel after breaking the threshold yesterday. The pound is just below $1.25 after Bank of England Governor Andrew Bailey signaled yesterday that interest rates may be near their top.
House prices experience their biggest drop since November
Median UK house prices fell 1.9% in August, the steepest drop since November, as the property market feels the impact of Bank of England interest rate hikes.
The median home registered by the Halifax lender is now £279,569, down around £5,000 from July and back to the level seen early last year. On an annual basis, prices fell 4.6%, from 2.5% in July and the biggest year-over-year drop since 2009 amid comparisons with record home prices seen last summer.
Halifax Mortgages Director Kim Kinnaird said: “It is fair to say that house prices have proven more resilient than expected so far this year, despite higher interest rates weighing on demand. of the buyers.
“However, there is always a lag effect when it comes to rate increases, and we may now be seeing a bigger impact from rising mortgage costs being passed through to house prices.
“Higher month-over-month volatility is also expected when activity levels are lower, although overall the pace of decline remains in line with our outlook for the year as a whole.”
London had an average property price of £529,814, down 4.1% from last year. The south of England and Wales have experienced the most downward pressure on property prices, with Scotland showing the greatest resilience.
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