B&M lifts profit expectations, Next hikes full-year guidance

London open

The FTSE 100 is expected to open eight points lower on Thursday, having closed up 0.41% at 7,585.19 on Wednesday.

Stocks to watch

B&M European Value Retail upgraded profit expectations and said it would pay a special dividend after a 12.3% rise in third quarter revenue. The retailer, with operations in the UK and France, said it now expected annual adjusted core earnings to be in the range of £560m-580m, ahead of current analysts' consensus estimates of £557m. The board intends to declare a special dividend of 20p a share.

Retailer Next lifted its full-year profit guidance as it reported better-than-expected sales over the Christmas period. In the nine weeks to 30 December, full price sales rose 4.8% versus last year. This was £66m ahead of the company’s previous guidance of a 2% decline for the period. Next upgraded its full-year pre-tax profit guidance by £20m to £860m, up 4.5% on the year. Nevertheless, the group said it remains cautious in its outlook for the year ahead. Initial guidance for the year ending January 2024 is for full price sales to fall 1.5% and for pre-tax profit to decline 7.6% from the current year to £795m.

Greggs reported total 2022 sales rising 23% in a trading update on Thursday, to £1.51bn, as fourth quarter like-for-like sales grew 18.2%. The FTSE 250 sausage roll and pastry peddler said like-for-like sales for the full year were up 17.8%. It said it was in a “robust” cash position to support its investment in growth plans, adding that it expected a full-year outcome in line with its previous expectations.

Newspaper round-up

The bosses of Britain’s biggest companies will have made more money in 2023 by Thursday afternoon than the average UK worker will earn in the entire year, according to analysis of vast pay gaps amid strike action and the cost of living crisis. The High Pay Centre, a think tank that campaigns for fairer pay for workers, said that by 2pm on the third working day of the year, a FTSE 100 chief executive will have been paid more on an hourly basis than a UK worker’s annual salary, based on median average remuneration figures for both groups. – Guardian

The discount retailer Wilko has borrowed £40m from restructuring specialist Hilco and rejigged its leadership team as it faces a cash squeeze after falling to a loss and struggling to pay suppliers. Lisa Wilkinson, a member of the family which controls the 400-plus store chain, is stepping down as chair to be replaced by the former Bensons for Beds chair Chris Howell. Another former Bensons executive, Mark Jackson, stepped in as chief executive before Christmas, the group’s third in three years. The managing director, Alison Hands, will also leave the company this month about 18 months after taking the job. – Guardian

Investors in a £3.5bn UK property fund are being asked to wait longer for their money back after the world’s biggest money manager extended a withdrawal pause. BlackRock, which manages nearly $8 trillion (£6.6 trillion) in assets, has suspended withdrawals by investors in the fund in a move that highlights the strains placed on the sector by difficult market conditions. – Telegraph

Household energy bills are forecast to be hundreds of pounds a year lower than expected in the second half of this year, falling below the government’s £3,000 price guarantee after a sharp drop in wholesale prices. Annual energy bills for a typical household are now estimated at £2,640 from July and £2,704 from October, according to Investec, while Cornwall Insight forecasts £2,800 a year from July and £2,835 from October. – The Times

Amazon is cutting more than 18,000 employees in the biggest round of lay-offs by a technology giant yet. The world’s largest retailer, which rode a surge in demand at the height of the pandemic, is now moving to cut costs amid cooling demand and fears of recession. – The Times

US close

Wall Street finished above the waterline on Wednesday, as market participants digested a set of Federal Reserve meeting minutes that put the prospect of interest rate cuts well and truly beyond the horizon.

At the close, the Dow Jones Industrial Average was up 0.4% at 33,269.77, as the S&P 500 added 0.75% to 3,852.97 and the Nasdaq Composite was ahead 0.69% at 10,458.76.

The Dow closed 133.4 points higher on Wednesday, easily reversing the modest losses it recorded on Tuesday when major indices struggled for direction on the first trading day of the new year.

Wednesday’s focus was the release of minutes from the Federal Open Market Committee’s most recent meeting late in the session, which showed none of its members were expecting a rate cut to be appropriate in 2023.

The minutes from the FOMC’s December meeting, at which rate setters decelerated to a 50-basis point increase in the federal fund rate target, showed the FOMC wanting more evidence of slowing inflation after some recent hopeful data.