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London's FTSE 100 dipped in early trade on Thursday after an uninspiring handover from Asia and New York, as the latest Federal Reserve minutes fuelled caution.
Released late Wednesday, minutes from the July meeting showed the US central bank reaffirmed its commitment to reducing historically high levels of inflation but could rein in the pace of interest rate increases ‘at some point’.
Policymakers at the Fed judged that there was little evidence to date that inflation pressures were subsiding. Further, participants judged that inflation would respond to monetary policy tightening and the associated moderation in economic activity with a delay and would likely stay ‘uncomfortably high for some time’.
Rabobank commented: ‘The FOMC expects to continue raising rates, albeit at some point at a slower pace. Once a sufficiently restrictive level has been reached, they are going to stick to that level for some time. This clearly stands in contrast to the early Fed pivot that the markets have been pricing in.’
The FTSE 100 was down 10.31 points, or 0.1%, at 7,505.44. The FTSE 250 index was up 16.40 points, or 0.1%, at 20,043.44. The AIM All-Share index was down 2.61 points, or 0.3%, at 924.06.
The Cboe UK 100 index was down 0.1% at 750.20. The Cboe 250 was up 0.1% at 17,364.17. The Cboe Small Companies was down 0.2% at 14,391.57.
Blue-chip equities in Europe outperformed London's FTSE 100, which was weighed down by ex-dividend stocks. In Paris, the CAC 40 was up 0.2%, while the DAX 40 in Frankfurt was up 0.4%.
In Tokyo on Thursday, the Nikkei 225 ended down 1.0%, while in Sydney, the S&P/ASX 200 closed 0.2% lower. In China, the Shanghai Composite ended down 0.5%, while the Hang Seng Index was 1.1% lower in late trade.
The sterling was quoted at $1.2013 early Thursday, down from $1.2040 at the London equities close on Wednesday. The euro stood at $1.0150, down a touch from $1.0155. Against the yen, the dollar was trading at JP¥135.20, down from JP¥135.44.
The economic events calendar on Thursday has eurozone inflation readings at 1000 BST and the latest US jobless claims numbers at 1330 BST.
In London, abrdn fell 4.7%, Anglo American lost 3.8% and Aviva was down 2.8%. The trio were among the stocks to go ex-dividend on Thursday, meaning shareholders no longer qualify for the latest payouts.
Helios Towers climbed 3.1%, among the best mid-cap performers.
The Africa-focused mobile phone tower developer reported revenue of $265.4 million for the half-year to June 30, up 25% from £212.4 million. However, its pretax loss ballooned to $122.2 million from $43.6 million.
Finance costs surged to $104.7 million from $64.5 million.
Adjusted earnings before interest, tax, depreciation and amortisation rose 19% to $136.1 million from $114.2 million a year earlier.
Tenancies grew 20% year-on-year to 20,549. A tenant is a mobile network operator that leases space on a tower.
Looking ahead, it backed guidance of 1,200 to 1,700 organic tenancy additions for the full year. It still expects an adjusted Ebitda margin between 51% and 53% in 2022, down from 53.6% in 2021. The first half adjusted Ebitda margin fell to 51% from 54% a year prior.
AO World shares shot up 9.3%. It said its new financial year is going as planned, but posted a loss for the one just ended.
Revenue in the year to March 31 fell 6.3% to £1.56 billion from £1.66 billion. AO swung to a pretax loss of £37.2 million from a £20.2 million profit.
The online electricals retailer's adjusted earnings before interest, tax, depreciation and amortisation amounted to £8.5 million, down sharply from £64.4 million the year before, which the firm blamed on increased staff costs as well as higher marketing and logistics expenses.
‘The new financial year marks a period of realignment for the business as we execute a strategic pivot to focus on cash and profit generation,’ AO said.
For the 2023 financial year, which so far is tracking to plan, it expects revenue between £1 billion and £1.25 billion. Adjusted earnings before interest, tax, depreciation and amortisation are expected around £20 million to £30 million - which would be up significantly on the 2022 financial year.
Made.com slumped 8.3%. The sofa seller said it is ‘considering all options’ to bolster its balance sheet.
Made.com said on Thursday: ‘Made confirms that these options include a potential equity capital raise. Made continues to consider its options and a further announcement will be made if and when appropriate.’
Late Wednesday, Sky News reported the sofa seller has hired PricewaterhouseCoopers to help with repairing its balance sheet, including plans for a share sale to raise around £50 million.
It now has a market value of £35.8 million.
According to Sky News sources, the furniture retailer is advancing plans to raise funds a month after announcing that it was exploring ways to bolster its financial position.
Sky News reported that the launch of a cash call is expected to take the form of a placing which would require shareholder approval.
Made shares debuted in June last year at 200 pence each, valuing it around £775 million on admission.
Made shares are trading at 9.29p early Thursday, down more than 95% from its IPO price.
Amid another poorly received retail market update, Angling Direct dropped 20%. The specialist fishing tackle retailer warned annual revenue will fall short of market expectations.
For the first half ended July 31, it expects to report revenue of £38.9 million, up 1.3% year-on-year from £38.4 million.
Angling said it has faced an ‘inevitable impact’ from cost of living pressures, falling consumer confidence and inflation. It has also felt the heat from recent hot weather.
‘More recently, adverse fishing conditions caused by the heatwave and its resulting effect on river levels and fish health has also impacted trading in the usually busy month of August. In addition, the same factors have impacted sales growth and profitability to a similar extent in Europe as the company continues to invest in the early stages of its European rollout,’ Angling said.
It now expects revenue ‘marginally below current market expectations’ for financial 2023. Its pre-IFRS 16 Ebitda will be ‘materially behind current market expectations’ and land in the region of £3.0 million and £3.4 million.
Immotion shares rose 7.9%. The virtual reality entertainment company said revenue in its core business almost doubled in the first-half, rising to £4.4 million from £2.3 million a year earlier.
The Location Based Entertainment arm also enjoyed a record month, with July revenue amounting to £1.3 million.
For the first seven months of the year, revenue at the business stood at £5.7 million, up 78% annually.
‘The summer trading period is looking very encouraging,’ Chief Executive Martin Higginson commented.
Gold rose to $1,762.24 an ounce early Thursday, from $1,753.55 late Wednesday. Brent oil was quoted at $93.17 a barrel, down slightly from $93.38.
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