Rolls-Royce reports rise in operating profit, Mondi warns of softer demand

London open

The FTSE 100 is expected to open 12 points higher on Thursday, having closed down 0.59% on Wednesday at 7,930.63.

Stocks to watch

Aerospace and defence company Rolls-Royce posted a rise in operating profit as the post-pandemic recovery in international travel continued and said it expected underlying earnings of £0.8-1bn this fiscal year. The company on Thursday posted a statutory operating profit of £837m in 2022, up from £513m a year earlier. Revenue grew to £13.5bn from £11.2bn.

Paper and packaging group Mondi more than doubled full-year profits on higher prices but warned that it continued to see softer demand and pricing, despite input costs declining. Profit before tax rose 119% to €1.56bn as revenue excluding Russian operations surged by 28% to €9bn.

Morgan Sindall reported record results on Thursday morning, with a 12% increase in revenue to £3.6bn and a 7% increase in adjusted profit before tax to £136.2m, despite market challenges. The FTSE 250 company said it maintained a strong balance sheet with net cash of £355m and an order book of £8.5bn.

Newspaper round-up

Ministers have moved to level the playing field on energy costs between British manufacturers and their European competitors after years of concerns that domestic firms faced an unfair disadvantage. The “British Industry Supercharger” scheme aims to improve conditions for 300 companies – employing 400,000 workers – in sectors including steel, metals, chemicals and paper manufacturing. – Guardian

Jeremy Hunt will send Britain in a “drastically anti-investment direction” if he forges ahead with a planned increase in corporation tax, BT has warned. The telecoms giant said the country was hurtling towards a “cliff edge deterioration in the tax environment for investment” ahead of an increase in the tax rate in April from 19pc to 25pc. – Telegraph

Britain is turning to a billionaire Czech energy tycoon to avoid winter power cuts by giving him the go-ahead to build a vast battery plant in Yorkshire. EPH, owned by Daniel Křetínský, the businessman who has investments in Royal Mail, Sainsbury’s and West Ham United, has won lucrative 15-year contracts from National Grid's electricity system operator to provide power to the grid when back-up supplies are needed. – Telegraph

Sainsbury’s has been running a trial for a new scheme that allows its employees to work a four-day week. Staff at the grocer’s head offices in Holborn, Coventry and Milton Keynes, as well as its warehouses, and store managers in its 1,400 UK shops are all taking part in the experiment, which is due to last three months. – The Times

City institutions including JP Morgan and KPMG are blocking the use of ChatGPT while others are instructing their teams to be cautious with how they use the technology because of privacy concerns. Accenture has told staff to make sure they use it “responsibly” and another leading accountancy firm has instructed employees to check with their managers if and how they plan to use it. UK Finance, the industry group for banking and finance, confirmed that it was discussing the topic with its members. KPMG UK has asked its staff not to use ChatGPT in order “to ensure information protection and risk management.” – The Times

US close

Wall Street's main indices were mixed at the close on Wednesday, as investors sifted through the minutes of the latest Fed meeting.

At the close, the Dow Jones Industrial Average was down 0.26% at 33,045.09 and the S&P 500 lost 0.16% to 3,991.05, while the Nasdaq Composite was 0.13% firmer at 11,507.07.

All focus was on minutes from the Federal Reserve's February meeting, which showed some division emerging as a number of officials expressed concern over the recent easing in financial conditions.

The minutes, released at 1900 GMT, showed that "a number" of Fed officials thought easier conditions could require a further tightening of monetary policy.

America’s central bank increased its benchmark rate by 25-basis points to a range of 4.5% to 4.75% at the meeting.

The minutes showed that a "few" officials wanted a 50-basis point rise, with Cleveland Fed president Loretta Mester and St. Louis Fed president James Bullard previously confirmed to be among those.