Latest news with #FTSE100
The Guardian
3 hours ago
- Business
- The Guardian
Debra Crew couldn't shift Diageo's post-Covid hangover
Two years is no time at all to be the boss of a large FTSE-100 company, but the departure of Debra Crew from Diageo, the Guinness and Johnnie Walker group, has felt possible for at least half that period. Now she has gone 'by mutual agreement'. Crew's first problem was that she followed a genuine corporate superstar in the form of the late Sir Ivan Menezes, whose strategy of 'premiumisation' – encouraging punters to drink more expensive stuff – did wonders for profit margins year after year. Any successor would have found it hard to match his record. Second, she started with a thumping profits warning in November 2023 – a proper shock to investors – and explained it badly. The cause was overstocking in Latin America in the post-Covid period, but it was never entirely clear how Diageo could have been so badly informed about the mismatch between stocks held by local distributors and how much tequila and whisky was actually being consumed on the ground. As the former chief operating officer, Crew could hardly blame others. Third, she waited too long to ditch financial guidance, inherited from Menezes, that was plainly out of date. After Covid's locked-up booze fest and the post-pandemic party period, the spirits market became harder to read when consumers turned more cautious. Clinging to 'medium-term' sales growth of 5% to 7% while turning in numbers as low as 0.6% added to the sense of drift. Fourth, even when Diageo came up with a cost-cutting plan in May, pledging $500m of savings, it was the new finance director, Nik Jhangiani, who got the credit in the eyes of City. While Crew talked about 'largely macroeconomic' factors at work, the incomer sounded more attuned to the reality that Diageo was living in a harsher operating climate. Only the ever-reliable Guinness brand has proved immune. Fifth, a new chairman, Sir John Manzoni, arrived in February, which was always going to be a moment of danger for a chief executive who had overseen a 40% fall in the share price. Thus Crew's immediate exit lacks shock value. When you're getting fixed pay of £1.7m out of total remuneration of £3m last year, you're vulnerable. The removal process sometimes should be unsentimental, just as it was at Unilever, where the last boss lasted only 18 months. That is not to dispute that the macroeconomic forces are genuine. The spirits market has weakened and Pernod Ricard's share price looks as horrible as Diageo's. Complicating factors include Gen Z's lower appetite for alcohol than their parents' generation, slimming drugs' possible effect on drinking habits and Donald Trump's ever-changing tariffs. Yet it is still hard to shake the feeling that Diageo could do more to help itself. From an annual sales base of $20bn, is $500m of cost savings really all that can be found? A lot of corporate fat may have accumulated over 20-odd years of success – the definition of leanness may have to be sharpened. Should it take until 2028, as pitched in May, to get the debt ratios within the desired range? Disposals have been promised, but the timetable looks leisurely. Sign up to Business Today Get set for the working day – we'll point you to all the business news and analysis you need every morning after newsletter promotion Jhangiani will start as favourite to succeed Crew as he's now the stand-in, is untarnished and is popular in the City. But, whoever it is, she or he needs to start with a clearer-eyed focus of what Diageo can do to shift its hangover. The company still has the potential to be great again. Under Crew, the long-term vision felt too blurry.
The Independent
4 hours ago
- Business
- The Independent
London stocks slip after reports that Trump will fire Federal Reserve boss
The FTSE 100 faded into the close to end lower on Wednesday after a White House official told Bloomberg News that Donald Trump is likely to fire Federal Reserve chairman Jerome Powell. The blue-chip index had earlier traded in the green, shrugging aside stronger-than-expected inflation data. The FTSE 100 closed down 11.77 points, 0.1%, at 8,926.55. It had earlier traded as high as 8,972.29. The FTSE 250 ended down 88.60 points, 0.4%, at 21,601.86, but the AIM All-Share rose 1.07 points, 0.1%, at 772.10. According to the Office for National Statistics, the UK annual consumer price inflation rate accelerated to 3.6% in June, from 3.4% in May. According to FXStreet cited consensus, it had been expected to remain at 3.4% in June. Costs for transport, particularly motor fuels, made the largest upward revision to the annual inflation rate, the ONS said. Core consumer prices, excluding energy, food, alcohol and tobacco, rose 3.7% annually in June, topping the FXStreet cited consensus which had pencilled in another 3.5% hike, which would have matched the May increase. The annual service price inflation rate was unchanged at 4.7% in June, the ONS said. Barclays said the 'tricky print' should keep the Bank of England 'cautious and gradual'. 'The overshoot in inflation itself is problematic but, we think, within the tolerance range of the [Monetary Policy Committee] for data outturns relative to its forecast, especially given the role played by air fares and the fact that core goods is undershooting relative to the May forecast.' Barclays felt the lack of progress on underlying services was of more concern and likely to give the central MPC members enough reason to remain cautious, even as 'we expect the labour market loosens in the coming months'. 'Governor (Andrew) Bailey has said that he is waiting to see the pass-through of a loosening labour market in inflation data before he can be more committal than gradual, and that is not present in today's print.' Barclays said Thursday's labour market data will be key. 'Altogether, we expect the committee to cut in August and remain on a gradual path for the removal of restriction to neutral, at a quarterly pace to 3.5% by February 2026.' Bank of America said the stronger-than-expected data was unlikely to derail an August rate cut. 'But there will be increased focus now on tomorrow's labour market data to validate continued easing in pay and softer employment dynamics,' BofA said. 'We expect a continued slowing in private regular pay growth to 4.8% year-on-year, unemployment to rise to 4.7%, above the BoE's forecast of 4.6% and June payrolls at minus 70,000 with May's payrolls revised upwards from minus 109,000 to minus 65,000. 'In our view labour market data would be key in determining the rate outlook,' BofA added. Stocks in New York gave back early gains, while bond yields rose and the dollar fell after the report that the US president could fire Fed chief Mr Powell. Bloomberg sources said Mr Trump discussed the possible move in a meeting with congressional Republicans on Tuesday night. The president has repeatedly expressed frustration over the central bank's decision to hold interest rates steady. Dan Coatsworth, investment analyst at AJ Bell, said: 'Markets in both the UK and US pulled back amid speculation that Trump was about to fire Powell. 'He hasn't been shy in expressing displeasure in Powell's decision-making, demanding the Fed bring down rates to help drive economic activity. He wants someone new behind the wheel at the central bank, and someone who will influence looser monetary policy.' The Dow Jones Industrial Average was down 0.3%, as was the S&P 500 index, while the Nasdaq Composite fell 0.4%. According to the Bureau of Labour Statistics producer prices rose 2.3% on-year in June, easing from a 2.7% climb in May. June's growth was tamer than expected. According to FXStreet cited consensus, a producer rise of 2.5% on-year was expected. Month-on-month, producer prices were flat in June, defying expectations of a 0.2% climb. They had edged up 0.1% in May from April. Goldman Sachs fell 1.6% despite reporting its best ever quarter for trading revenues, as they benefitted from the April volatility. Morgan Stanley fell 3.6% while Bank of America dipped 1.7%. The yield on the US 10-year Treasury was quoted at 4.48%, up from 4.43%. The yield on the US 30-year Treasury was quoted at 5.06%, up from 5.02%. The pound was quoted at 1.3473 dollars at the time of the London equities close on Wednesday, up from 1.3380 dollars on Tuesday. The euro rose against the dollar to 1.1708 from 1.1604. Against the yen, the dollar was trading lower at 147.97 compared with 148.97. In European equities on Wednesday, the Cac 40 in Paris closed down 0.6%, while the Dax 40 in Frankfurt fell 0.2%. In London, Intermediate Capital Group shares rose 3.4%, the best large-cap performer. It said the investment landscape remains 'very attractive' as it reported an increase in assets under management in its financial first quarter. The London-based private equity investment firm said assets under management were 122.58 billion dollars on June 30, the end of its financial first quarter, up 9.1% from 112.36 billion dollars on March 31, or by 3% at constant currency. Year-on-year, AUM increased 22% from 101.00 billion dollars, or by 15% at constant currency. Insurer Hiscox rose 2.6% as Morgan Stanley raised the stock to 'overweight'. Recruiter Hays fell 1.5% after Morgan Stanley cut it to 'underweight'. Diageo rose 0.6% after it said chief executive Debra Crew had stepped down with immediate effect by mutual agreement, with the chief financial officer stepping up on an interim basis. The London-based owner of Guinness and Johnnie Walker said it has started a formal search process to replace Ms Crew, which will include internal and external candidates. CFO Nik Jhangiani will take on the role of chief executive in the interim. Analysts at Citi said: 'Although Debra's tenure as CEO may have been viewed as turbulent, we note that many of the factors impacting the business were spirit industry-wide. As such we think today's initially positive share price reaction to the news is primarily driven by short-covering.' The broker added that 'until clarity on a new CEO is forthcoming, investor re-engagement in the stock is likely to remain limited'. Brent oil fell to 67.87 dollars a barrel at the time of the London equities close on Wednesday, from 68.94 dollars late on Tuesday. Gold was quoted higher at 3,371.80 dollars an ounce against 3,331.36. The biggest risers on the FTSE 100 were Intermediate Capital Group, up 67.0 pence at 2,044.0p, Hiscox, up 32.0p at 1,274.0p, 3i Group, up 60.0p at 4,210.0p, Beazley, up 13.0p at 912.0p and British American Tobacco, up 55.0p at 3,873.0p. The biggest fallers were Ashtead, down 124.0p at 4,679.0p, Croda International, down 68.0p at 2,854.0p, WPP, down 8.7p at 411.7p, Pershing Square Holdings, down 80.0p at 4,100.0p and Melrose, down 9.4p at 520.8p.
Sky News
8 hours ago
- Business
- Sky News
Guinness owner Diageo parts ways with boss after tough two years
The chief executive of Diageo has left by "mutual agreement" after a tough two years at the helm of the FTSE 100 drinks firm. Debra Crew, who took over in the summer of 2023 following the sudden death of long-time boss Sir Ivan Menezes, had come under pressure from investors over performance. Shares in the maker of Johnnie Walker whisky and Guinness stout, during her time in charge, had plunged by more than 40%. They gained more than 3%, and were leading the FTSE 100, when the Financial Times first reported that her departure was imminent. It was later confirmed by the company, which gave no reasons for the move. Diageo only said that it was sticking to its forecasts for this year and next and that Ms Crew would be replaced, on an interim basis, by chief financial officer Nik Jhangiani. The share price, which has outperformed rivals despite its struggles, reflects the post pandemic decline in people drinking at home. Some analysts have suggested that she did not convince shareholders over Diageo's strategy in the wake of this shift, with a turnaround plan revealed in May, which aimed to slash costs, seen as failing to go far in enough. Some investors had sought a greater focus on disposal of non-core brands. However, the stock has also struggled on the back of threats posed by the US trade war. Diageo's chair, John Manzoni, said: "On behalf of Diageo and the board, I would like to thank Debra for her contributions to Diageo, including steering the company through the challenging aftermath of the global pandemic and the ensuing geopolitical and macroeconomic volatility. "On behalf of all Diageo colleagues, I wish her every success in the future. The Board's focus is on securing the best candidate to lead Diageo and take the company forward. We strongly believe Diageo is well placed to deliver long-term, sustainable value creation."
Yahoo
8 hours ago
- Business
- Yahoo
Markets bet on August interest rate cut despite surprise inflation jump
Investors remain confident that the Bank of England (BoE) will cut interest rates next month, even as UK inflation rose unexpectedly to a near 18-month high in June as food and fuel prices surged. Though inflation remains well above the Bank of England's target rate of 2%, most economists think the central bank will cut interest rates again at its next meeting on 7 August. Since its first quarter-point rate cut last August from the 16-year high of 5.25%, the Bank of England has been cautious, reducing interest rates every three months to the current 4.25%. Read more: UK inflation unexpectedly rises in June on higher fuel prices The Office for National Statistics (ONS) said consumer prices rose by an annual rate of 3.6% in June, up from 3.4% in May. That was the highest rate since January 2024. The ONS added that higher food prices were primarily behind the increase. Fuel and transport costs also contributed. Money markets indicate there is an 87% chance that policymakers will lower borrowing costs in August, down from an 89% probability on Tuesday. Suren Thiru, economics director at ICAEW, said: 'June's uptick is the start of a slight summer surge in inflation with skyrocketing business costs and global trade turbulence likely to lift the headline rate moderately higher by the autumn, despite July's drop in energy bills. 'While June's hot inflation won't deter policymakers from sanctioning an August policy loosening, given mounting worries over economic conditions, these figures may increase caution over the pace of future rate cuts.' Services inflation, a measure the central bank views as a better guide to domestically generated price pressures than the headline rate, held steady at 4.7% in June. Read more: FTSE 100 LIVE: Stocks muted as UK inflation unexpectedly jumps to highest since January 2024 Sanjay Sanjay, Deutsche Bank's chief UK economist, said: "Is an August rate cut in jeopardy? No, we don't think so. There's enough of a slowdown in GDP and the labour market to warrant a 'gradual and careful' easing of monetary policy. But the onus now rests on the labour market to shape how far and how fast the MPC can cut this year and next." Last month, the central bank's Monetary Policy Committee (MPC) voted six to three to keep rates unchanged at 4.25%, following a quarter-point cut in May. The MPC, which has an inflation target of 2%, has reduced interest rates four times since last summer. Chris Beauchamp, chief market analyst at IG, said: "Today's CPI data spells more pressure for consumers thanks to the surge in food prices, but the overall picture doesn't quite spell the end for any further rate cuts. "Core goods and services inflation was broadly contained, and the focus shifts now to the job numbers tomorrow to see if there are further signs of weakness that might keep the Bank of England on course to ease policy in upcoming meetings." Markets are betting the BoE will cut rates one more time by the end of the year. However, the latest inflation figures still represents a setback for policymakers at Threadneedle Street. Read more: Bank of England could cut interest rates faster if jobs market slows, Bailey says Isaac Stell, investment manager at the investment service Wealth Club, said: "The surprising strength of the inflation figures adds additional issues to the UK's mounting economic woes. All eyes will turn to the Bank of England who have indicated they are willing to cut rates given the cooling in the jobs market but are unlikely to be able to justify a cut when inflation has started to run hot once again. "In the absence of interest rate cuts, consumers are likely to feel a continued squeeze, unhelpful for the government's growth agenda which has yet to show signs of life itself. Awful April has rolled into miserable May and in turn rolled into joyless June. The government will now pin its hopes on a Jubilant July." Andrew Sentance, who sat on the Monetary Policy Committee from 2006 to 2011, said it would be 'irresponsible' for it to cut interest rates after the jump in inflation. Bank governor Andrew Bailey said in an interview with The Times newspaper earlier this week that rates could be cut further if the jobs market slows down, saying 'I really do believe the path is downward'. The UK labour market statistics will be published this Thursday at 7am in London. The Bank of England will announce its decision on interest rates on 7 August around noon.
Zawya
8 hours ago
- Business
- Zawya
UK stocks muted as inflation data dims interest rate cut bets
London's main stock indexes were subdued on Wednesday, as a stronger-than-expected rise in domestic inflation slightly cooled bets of interest rate cuts from the Bank of England. The blue-chip FTSE 100 was up 0.2% as of 1035 GMT, while the midcap FTSE 250 index was flat. Britain's annual rate of consumer price inflation unexpectedly rose to its highest in over a year at 3.6% in June, as higher costs of motor fuel, transport and food pushed up prices. "There is a real threat of stagflation as the rate of inflation moves higher and the economy is stuck in the mud. It puts the Bank of England in a tricky situation with regards to monetary policy decisions," said Dan Coatsworth, investment analyst at AJ Bell. The central bank is largely expected to cut interest rates by a quarter-point in August after recent economic data fuelled concerns of weaker domestic growth and labour market, but the chances of such a move dimmed after Wednesday's inflation data. The BoE will closely watch the employment and wages figures due on Thursday. Meanwhile, UK finance minister Rachel Reeves on Tuesday announced measures to boost the finance sector, including reforming requirements for banks to separate retail and investment banking activities, easing regulations and a plan to get more savers investing in stocks. In corporate updates, AstraZeneca fell 1.1% after the drugmaker's experimental therapy, anselamimab, failed to meet the main goal of a late-stage study for the treatment of AL amyloidosis, a rare condition that causes a buildup of protein deposits in the body. Rio Tinto rose 1.3% after the mining giant reported its strongest second-quarter iron ore production since 2018, a day after promoting its iron ore chief Simon Trott to CEO. Antofagasta edged up 0.5% after the Chilean miner said its copper production rose 11% in the first half of 2025, on improved output from its two concentrators. (Reporting by Ankita Yadav in Bengaluru; Editing by Shinjini Ganguli)
