Business live: FTSE 100 on course for new record close

Times

5 days ago

The owner of British Gas has called for larger rival Octopus Energy to be barred from taking on new customers after failing to hit financial resilience targets.Chris O'Shea, Centrica chief executive, said it was 'outrageous' that Ofgem had not placed such restrictions on all three companies that had fallen short of the minimum capital target that came into force at the end of March.O'Shea denied his comments were 'sour grapes' after Octopus overtook British Gas as Britain's largest supplier earlier this year and said he simply wanted regulation to be 'fair and evenly applied'. He said Octopus' accounts showed a shortfall of more than £1 billion compared with the target.An Ofgem spokeswoman said: 'The financial resilience of the energy sector has improved significantly.'An Octopus Energy spokeswoman said: 'This is yet more naked self-interest from British Gas.'
The FTSE 100 was trading up 85 points, or 0.9 per cent, at 9,146.70 points at noon as the leading London index headed for a new record high.
Sentiment was buoyed by corporate results and growing optimism about the trade war.
The kitchen and joinery supplier Howden Joinery was the biggest riser, up 11.7 per cent, after it reported a rise in first-half pre-tax profits in a challenging market.
The consumer goods company Reckitt Benckiser gained 9.6 per cent after a slight upgrade to full-year sales forecasts following recent volatile trading and BT rose 8.3 per cent after it kept full-year guidance unchanged in a quarterly update.
In all there were 77 risers and 23 fallers. 3i Group was the biggest faller after investors took profits following a bullish trading update. The shares, which have risen 41 per cent over the past year, fell 2 per cent.
Gold miners continued to fall as demand for safe haven assets faded for the moment, leaving the gold price down 0.6 per cent at $3,365.59 an ounce.
The government's savings arm has released new versions of its one-year British Savings Bonds with increased interest rates.
NS&I's new rate for the one-year growth and income bond is 4.18 per cent AER (annual equivalent rate). The previous rate was 4.05 per cent AER.
They are available to new customers and those with existing bonds that are due to mature.
The manufacturing sector shows signs of stabilising in July but the outlook remains fragile with factories holding back on investment and cutting jobs again, according to the latest CBI industrial trends survey.
Manufacturing output was broadly flat in the three months to July, the survey said. Although declines were recorded across several sub-sectors, these were largely offset by stronger activity in motor vehicles and transport equipment and in food, drink and tobacco.
Manufacturers expect output to fall slightly over the coming quarter to October.
Ben Jones, lead economist at the trade body, said: 'Conditions in UK manufacturing remain challenging, with many firms reporting subdued and unpredictable demand. High input costs, labour shortages and global supply chain disruptions are continuing to put pressure on margins and capacity.'
Sir Keir Starmer and Narendra Modi, the Indian prime minister, who is in Britain for a two-day visit, will formally sign a free trade agreement today that was agreed earlier in the year.
Here's a reminder of what's in it for the UK:
• India will remove or reduce tariffs on 92 per cent of UK goods exports.• Tariffs on gin and whisky exports will fall from 150 per cent to 40 per cent. Luxury car tariffs will fall from 100 per cent to 10 per cent.• UK food and drink, such as chocolate, salmon, biscuits and lamb, will not pay any tariffs.• Zero tariffs will also apply to machinery, medical devices and car parts.• UK firms will also be granted access to about 40,000 Indian procurement contracts with a value of at least £38 billion a year.
The home improvement retailer Wickes reported a 6.9 per cent rise in second-quarter like-for-like sales that outpaced the first quarter, as its design and installation business returned to growth and retail revenues grew.
Group revenue in the six months to June 28 increased 5.6 per cent year-on-year to £847.9 million.
The company said it was comfortable with consensus expectations for annual adjusted pre-tax profit of £46.7 million to £51.5 million despite significant cost headwinds across the retail sector.
David Wood, chief executive, said: 'In the first half of the year we have gone from strength to strength, with increased sales and record market share.'
The shares rose 5 per cent to 233p.
Growth in Britain's private sector slowed last month as new orders fell and companies cut jobs at the fastest pace in five months.
The S&P Global flash UK composite purchasing managers' index (PMI) reported a reading of 51 in July, down from a nine-month high of 52 in June. A reading of 50 marks the line between growth and contraction.
The survey covers the service and manufacturing sectors. Its employment gauge dropped to 45.1, its lowest since February, and businesses in part blamed Rachel Reeves's decision to increase labour costs. Concerns about weak demand also weighed on hiring decisions.
Chris Williamson, chief business economist at S&P Global Market Intelligence, said the sustained impact of the budget measures on employment was particularly worrying. He said the survey suggested that the British economy was growing at a quarterly pace of only 0.1 per cent with a risk that it could prove weaker.
An upgrade to full-year sales forecasts following recent volatile trading at Reckitt Benckiser has caused a sharp rise in the consumer goods company's share price.
The FTSE 100 group raised full-year net revenue forecasts to above 4 per cent from its previous guidance of 3-plus per cent to 4-plus per cent in 'core Reckitt'.
That excludes a portfolio of homecare brands, such Air Wick fresheners and Cillit Bang cleaners, in which Reckitt agreed to sell a majority stake to the private equity firm Advent International last week for up to £3.6 billion. It also excludes Mead Johnson, Reckitt's infant nutrition business, which is subject to a strategic review in the face of costly safety lawsuits in the United States.
Reckitt shares rose 9 per cent, or 454p, to £54.94.
British consumers remain resilient despite the slowing economy, according to TSB, which chalked up record profits in the six months to June.
The high-street bank, which is the subject of a £2.9 billion bid from Santander, reported a 71.5 per cent increase in pre-tax profit to £191.4 million.
Lower costs, higher income and a fall in provisions for bad debts produced the improvement in profit, which was also 7 per cent higher than in the second half of 2024.
TSB is owned by the Spanish group Sabadell and has five million customers, 5,000 employees and 175 branches. Job cuts and branch closures are expected if the purchase by Santander goes through.
'The UK consumer remains resilient in the face of slower economic growth and uncertainty about the global outlook,' TSB said in an outlook statement.
Shares in Howden Joinery have jumped 10 per cent this morning after the FTSE 100 kitchen and joinery supplier reported a rise in first-half pre-tax profits in a challenging trade-led refurbishment market.
Pre-tax profits rose to £117.2 million in the 24 weeks to June 15, up from £112.3 million in the same period last year.
Howdens put the rise down to price increases, which lifted gross profit margins by 130 basis points to 61.2 per cent, and a strong mix towards kitchens.
The company, which reiterated its full-year guidance, plans to bring out more new kitchen ranges and open about 25 depots in the UK and reformat about 60 existing depots over the year.
The shares rose 87½p to 923p.
London's leading share index has risen to a new record intraday high buoyed by strong corporate results and optimism of trade deals with the United States.
The FTSE 100 rose 43 points, or 0.5 per cent, to 9,102.53 and is on track to beat yesterday's record closing high of 9061.49.
Reckitt Benckiser, BT and Lloyds Banking Group, which all reported results this morning, rose by 11 per cent, 3.5 per cent and 1.14 per cent respectively.
The British Gas owner Centrica was the biggest faller after reporting a halving of profits, down 2.52 per cent. The gold miners Endeavour and Fresnillo also fell after a dip in the gold price and were down 1.37 per cent and 0.68 per cent respectively.
In the FTSE 250, the biggest riser was ITV, which also reported results. The shares gained 6 per cent. The molten metal flow engineering company Vesuvius fell 11 per cent after a trading update that was cautious about the outlook for the second half.
IG: The online trading group announced a £125 million share buyback after it reported a better-than-expected 17 per cent rise in headline profits to £535.8 million, up from £456 million last year, in the 12 months to May 31. This was driven by a rise in trading volumes during the recent market turbulence. Statutory pre-tax profit rose 24 per cent to £380.4 million. Revenue over the period rose 9 per cent to £1.07 billion.
AJ Bell: The broker and investment platform has reported that assets under administration rose to £96.1 billion in the three months to the end of June, up 15 per cent over the past year and 6 per cent in the quarter, as the number of customers rose by 27,000 in the quarter to 620,000.
Wizz Air: The budget carrier reported worse-than-expected first-quarter profit as it struggled with plane groundings and forecast a key revenue metric for the second quarter to be flat year on year. Operating profit fell to €27 million for the three months to June 30, compared with analysts' forecasts of €87 million and down 38 per cent from a year ago.
Vodafone: The telecoms group reported a 5.5 per cent rise in organic service revenue, its key performance metric, during the June quarter, as the UK, Turkey and Africa offset a further decline in its troubled German business. In its first trading update since the merger of its UK business with Three, Margherita Della Valle, Vodafone's chief executive, said that the group was 'well positioned for multi-year growth across both Europe and Africa'.
BT: The former state monopoly said Simon Lowth, its finance chief, was to retire after nine years in the job and would be replaced by Patricia Cobain, who is in the same role at Virgin Media O2, one of BT's main rivals in the mobile and broadband market. The telecoms group reported a 3 per cent decline in revenue for its first quarter but said that it was on track to achieve full-year guidance. Analysts had forecast a 2.1 per cent decline in revenue over the three months.
Reckitt Benckiser: The Dettol and Lysol owner has announced plans to buy back £1 billion of its own shares as it announced that like-for-like sales rose by 1.5 per cent in the first six months of the year. The company sold a majority stake in homecare brands such as Air Wick and Cillit Bang for £3.6 billion last week.
Lower gas and power prices drove a halving of profits at the British Gas owner Centrica in the first six months of the year.
The FTSE 100 energy group said that adjusted operating profits fell 47 per cent to £549 million, as its North Sea oil and gas, nuclear and commodities trading divisions all reported sharp drops in earnings and its gas storage business swung to a loss.
Its British Gas household energy supply business also reported a slight drop in profits as warmer weather hit energy usage, offsetting an increase in customer numbers.
At a statutory level, the company made a £69 million loss, down from a £1.67 billion profit in the same half last year, as it wrote down the value of its nuclear investments and closed its Morecambe gas field. The company described the performance as resilient.
Despite the lower profits, Centrica said it would pay an interim dividend of 1.83p per share, up from 1.5p per share this time last year.
The broadcaster and studios business ITV said it would cut an extra £15 million in costs this year, on top of the £30 million already outlined, and reduce content spending to £1.23 billion, from a previously expected £1.25 billion.
The FTSE 250 group recorded a 7 per cent decline in advertising revenue over the first six months of the year, which offset a better performance for its studios arm, where revenue rose by 3 per cent.
Carolyn McCall, ITV chief executive, said: 'ITV Studios continues to see positive momentum, with strong growth in external revenues in H1, driven by content for the global streaming platforms, including The Devil's Hour for Amazon Prime Video and Run Away for Netflix.'
Lloyds Banking Group has declared a bumper half-year dividend that will return about £730 million to its stock market investors after posting a surprise rise in interim profits.
Britain's biggest mortgage lender said that pre-tax profits in the six months to the end of June had increased to £3.5 billion, up from £3.3 billion a year earlier and better than the dip to £3.2 billion that City analysts had been expecting.
It said it was increasing its interim dividend by 15 per cent year-on-year to 1.22p a share, a distribution to its shareholders that is the equivalent of £731 million.
Profits were helped by a smaller-than-expected impairment charge for bad loans. City analysts had forecast a £591 million provision, but the actual impairment was £442 million, although this was still up from £101 million at the same point in 2024.
The FTSE 100 is expected to open about 39 points higher, putting it on track to hit a new record high after shares in Asia rallied on optimism about trade following the US-Japan deal and reports that the European Union is close to an agreement with President Trump.
Sentiment will also be driven by the large number of FTSE 100 and FTSE 250 companies reporting this morning as executives and advisers clear their desks before heading to the pool in Provence or Tuscany.
The Nikkei rose 1.65 per cent to 41,815.90, its highest level in more than a year as it edges nearer its closing high of 42,224.02 on July 11. Shares in China and South Korea were also higher.
This followed record closing highs for the S&P 500 and the Dow Jones industrial average on Wall Street last night. The tech-heavy Nasdaq also made gains before the second-quarter results from Google's parent company, Alphabet. Nasdaq and S&P futures are higher after Alphabet beat estimates to kick off the 'Magnificent Seven' earnings season.