Strong NatWest results today underpinned a robust session for the FTSE 100 index.
The lender’s shares surged as its second quarter profits easily beat City forecasts.
Meanwhile, Rightmove is hopeful that lower mortgage rates will stimulate portal activity.
Key Points
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NatWest shares jump on results
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Rightmove eyes mortgage boost
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Drax improves full-year guidance
3M shares jump as Tesla continues decline
14:46 , Simon Hunt
Shares in 3M led a recovery in stock prices in the opening minutes of trade on Wall Street, with the shares up as much as 10% after the consumer goods conglomerate upped its full-year profits forecast.
Meanwhile shares in Tesla continued their retreat, down another 1.3%, meaning the carmaker’s stock has now fallen more than 10% in the past week.
The S&P 500 opened higher by 0.64% at 5,433.67, while the Nasdaq Composite gained 0.87%, to 17,331.95 at the opening bell.
Motorists still ‘paying too much’ for fuel, says competition watchdog
14:05 , Simon Hunt
Drivers are still paying too much for their fuel, with retail margins “significantly” above historic levels, according to the UK competition watchdog.
The Competition and Markets Authority (CMA) said that the fuel market is still “failing consumers” a year on from its first report that laid bare the problems in the sector.
It said that retailers’ fuel margins – the difference between what they pay for their fuel and the price they sell it at – are “still significantly above historic levels”.
City comment: Is Evri really worth £2.7 billion?
12:52 , Simon Hunt
Private equity firm Apollo has bought delivery business Evri for £2.7 billion. Did they get a good price? I can only assume the execs who hammered out the deal are not fans of online shopping.
A brief history: A few years ago Evri was called Hermes. The company found itself bottom in rankings for delivery firms more than once. Citizens’ advice gave Hermes a 2-star rating for ‘trust’ and a 1-star rating for handling customer problems.
On top of that, workers at the courier service carelessly threw parcels around delivery depots and over people’s fences, an investigation by the Times found.
So Hermes rebranded to Evri, and said it would improve. But old habits die hard.
Commercial property market turning a corner, says Segro
11:22 , Simon Hunt
There are signs the commercial property sector has turned a corner in the UK after warehouse developer Segro said it had seen the first rise in valuations for two years.
The London-listed firm, which specialises in edge of town flexible business space, posted a 0.9% rise in the value of its UK property portfolio for the first six months of the year. That compares to a 3.4% fall in its 2023 financial year.
Segro CEO David Sleath said: “The balance of supply and demand for modern warehouse space remains supportive of further rental growth and development gains in the attractive European markets in which our portfolio is concentrated. Valuations have stabilised with the UK seeing its first increase since the cycle turned in 2022.”
It comes amid signs the new Labour government is plotting a major shake-up of planning laws in the UK that could see a flurry of development on so called ‘grey belt’ land and less power for developments to be blocked locally.
Earlier this month, levelling-up Secretary Angela Rayner unveiled a review into two proposals to build data centres in London’s commuter belt which had been blocked by local authorities, a move which by itself would unlock billions of pounds of investment if the decisions were overturned.
Segro said the rise in value of its UK property portfolio had been offset by a continued drop in the value of its portfolio in continental Europe, which declined by 1.4% during the period. The firm’s shares fell 2.4% to 885p.
Drax guidance boosts FTSE 250 shares, summer setback for Brighton Pier
10:16 , Graeme Evans
Drax shares today jumped 11% after the biomass power station business lifted City guidance alongside a 23% rise in half-year earnings to £515 million.
The company, whose North Yorkshire site generates enough renewable electricity a year to power the equivalent of over eight million homes, said it looked forward to working with ministers on delivering the government’s 2030 net zero ambitions.
As well as the biomass Drax power station, the group operates the Cruachan hydro site and is developing opportunities around bioenergy with carbon capture and storage. Shares rose 64p to 630.5p.
The performance by Drax, which also announced a £300 million buy back of shares, helped the FTSE 250 index improve 124.05 points to 21,008.40.
The blue-chip FTSE 100 index lifted 0.9% or 75.39 points to 8261.74, aided by better sessions for heavyweights Rolls-Royce, Anglo American and Shell.
Their gains followed a mixed handover from Wall Street after US GDP figures boosted hopes of a soft landing for the world’s biggest economy but tech stocks faltered
Despite the jitters, FTSE 250 venture capital business Molten Ventures rose 13p to 362p as it announced a £10 million share buyback following its exit from medical technology firm Endomag.
Among the AIM-listed minnows, shares in Brighton Pier Group fell 16% as it revealed the impact of recent wet summer weather on full-year forecasts.
The group, whose portfolio includes eight indoor mini-golf sites and the Lightwater Valley adventure park in North Yorkshire, said footfall at Brighton Palace Pier was down 29% in the four weeks to Sunday.
Despite charging non-residents £1 for admission to the pier in peak periods, it does not expect to recover the shortfall over the summer. Its warning that full-year earnings will miss City forecasts sent shares down 6.5p to 33p.
NatWest reveals £24m bill for shelved retail share sale as profits fall
09:51 , Simon English
NATWEST today revealed that shelved plans to sell shares in itself to the public had cost £24 million – but its results offered a good case for revitalising that scheme.
CEO Paul Thwaites is keen to put Natwest’s days as an arm of the government far in the past.
A retail share sale planned by the previous Tory government was ditched – Labour’s plans for its 20% stake, acquired when it bailed out Royal Bank of Scotland, are not clear.
Today NatWest unveiled the acquisition of £2.5 billion of mortgages from Metro Bank, giving it another 10,000 customers.
That comes on top of last month’s purchase of the bulk of Sainsbury’s Bank, giving it £2.5 billion of loans and one million new accounts.
NatWest saw half year operating profit down 16% to £3 billion. But they compared well to arch rival Lloyds Bank, which reported yesterday.
Rightmove braced for surge in property deals
09:38 , Simon Hunt
Rightmove today said it was prepared for a surge in property deals amid falling mortgage rates as the online real estate portal posted a rise in sales and profits.
It is hoped that the Bank of England will unveil its first rate cut in four years as soon as next week, leading to further mortgage rates drops and rising house market activity.
The probability of an interest rate cut stands next week at 48% versus 52% for a rate hold, according to figures from LSEG based on analyst forecasts.
“With the election now concluded, the property market looks forward to potential interest rate reductions which will further stimulate activity,” said CEO Johan Svanstrom.
Rightmove today posted a 7% rise in revenues to £192 million for the first six months of the year, while pre-tax profit rose 2% to £133 million. Shares rose as much as 3.5% to 588p.
Charlie Huggins, Manager at Wealth Club, said: “These are solid but uninspiring results from Rightmove. Even without much growth, Rightmove is still a cash cow. But with the competitive environment hotting up, Rightmove cannot afford to rest on its laurels.”
NatWest shares up 8% in stronger FTSE 100, Drax jumps 15%
08:24 , Graeme Evans
NatWest shares have jumped 8% after second quarter results beat forecasts and it increased the half-year dividend. The rise of 25.8p left shares at 363.9p.
Other strong performers in the FTSE 100 included Rightmove, which rose 3% or 15.3p to 583.3p following half-year results.
With BP, Shell and Barclays also higher, London’s top flight improved 0.5% or 41.81 points to 8228.16.
The FTSE 250 index added 80.06 points to 20,964.41, led by the biomass power station business Drax on annual guidance at the top end of hopes.
Drax shares rallied 15% or 83.5p to 650p, while the results-day optimism of Jupiter Fund Management helped shares put on 8% or 6.9p to 89.4p.
Rightmove profits edge higher, eyes interest rate boost
07:53 , Graeme Evans
The Rightmove property platform has reported a 7% rise in half-year revenues to £192.1 million, leading to a 2% increase in operating profit to £131.6 million.
Chief executive Johan Svanstrom said: “Our performance came against the backdrop of the sustained challenging mortgage rate environment.
“The period saw a pick-up in existing-homes listings and transactions, a continued yet softening imbalance of demand and supply for rentals, and a tentative outlook for new homes development volumes.
“With the election now concluded, the property market looks forward to potential interest rate reductions which will further stimulate activity.”
For the full year, the company continues to expect revenue growth of 7-9%, with membership growth of up to 2% across estate agency and new home and full-year average revenue per advertiser growth of £78-85.
NatWest adds Metro mortgages, margin improves
07:18 , Graeme Evans
NatWest has unveiled a deal with Metro Bank to acquire a £2.5 billion portfolio of prime UK residential mortgages, adding about 10,000 customer accounts.
The move was announced alongside half-year results showing an operating profit of £3 billion, down 15% on a year earlier.
The figure for the second quarter rose 27.7% to £1.7 billion after the net interest margin improved by five basis points to 2.10% and the lender benefited from improvement bad debt provisions.
NatWest has declared a 6p interim dividend, up 9% on last year’s award.
Chief executive Paul Thwaite said: “Our customers are beginning to feel more confident, with activity increasing and asset quality remaining strong, and we are well positioned to help unlock growth across the UK through our unrivalled regional network.
“Fundamentally, if we succeed with our customers, we will succeed for our shareholders and the wider economy.”
FTSE 100 seen higher after mixed US session
07:06 , Graeme Evans
Pressure on Wall Street tech stocks continued last night as a weak finish to the Wall Street session left the S&P 500 down 0.5% and the Nasdaq off 0.9%.
In contrast, the Dow Jones Industrial Average closed 0.2% higher after robust GDP figures boosted hopes of a soft landing for the world’s biggest economy.
Tesla shares closed 2% higher after Wednesday’s 12% slide, but Google parent Alphabet lost another 3% and Ford fell 18% on earnings disappointment.
The FTSE 100 index outperformed global markets in yesterday’s session, closing 0.4% higher compared with a decline of 1.1% for the CAC40 in Paris.
London’s top flight is forecast to open today’s session 13 points higher at 8199, while the pound stands at $1.2859 and Brent Crude oil at $82.43 a barrel.
Recap: Yesterday’s top headlines
06:56 , Simon Egnlish
Good morning from the Standard City desk.
Here’s a summary of our top headlines from yesterday:
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Revolut finally secures UK banking licence after painful three-year wait, paving the way for broader expansion.
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Vodafone says lower inflation is driving a slowdown in revenue in the UK ahead of blockbuster Three merger.
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Lloyds Bank profits at £3.3 billion in half year leave case for windfall tax “as strong as ever” say critics.
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Centrica slump: British Gas owner’s profits fall by three quarters to £1.7 billion in “normalised environment” for energy prices; it says there is a “challenging” outlook for gas storage business as winter price peaks ease
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High fibre: BT connects over one million premises to fibre internet links in the first quarter, a record at 78,000 a week. There are now 5 million hook ups. Overall revenue down 2% to £5billion; earnings up 2% to £2.1 billion
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ITV sees digital revenue up 17% as ITVX does well. Love Island broadcaster says it has “been transformed” in last five years.
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Private equity firm Apollo to buy UK parcel delivery giant Evri for £2.7bn.