Flutter returns to first-half profit, Coca-Cola HBC organic revenues jump
London open
The FTSE 100 is expected to open 42 points higher on Wednesday, having closed down 0.36% on Tuesday at 7,527.42.
Stocks to watch
Gambling giant Flutter Entertainment reported 38% first-half revenue growth and a swing to profitability on Wednesday, largely driven by a robust US performance and the addition of Sisal last year. Its profit after tax totalled £128m for the period, compared to a loss of £112m in the first six months of 2022. For the second half, it anticipatd full-year adjusted EBITDA to align with market expectations, considering normalised sports results.
Coca-Cola HBC posted a 17.8% jump in organic revenues for the first half of the year, with organic sales per case growth of 19.0% thanks to price and mix improvements. Also on an organic basis, earnings before interest and taxes were up by 17.7% alongside unchanged organic margins of 11.2%. Guidance was reiterated for average annual organic growth of 6-7%, up from a prior range for 5-6%. Average annual organic EBIT was seen expanding 20-40bp per year. Free cash flow on the other hand dropped by 22.9% to €256.6bn.
Newspaper round-up
The UK economy is suffering from a 1970s-style “British disease” that means inflation will not fall back to the Bank of England’s 2 per cent target until after 2027, a think tank has warned. The National Institute of Economic and Social Research (NIESR) said the economy had suffered from five years of “lost economic growth”, with stubbornly high inflation and semi-permanent government deficits expected in the foreseeable future. Jagjit Chadha, director of the institute, Britain’s oldest independent economics think tank, said the country’s woes had led to the “re-emergence of the British disease” — a reference to the stagflationary trap of the 1970s, when the term was coined. - The Times
Amazon has been accused of pushing small businesses to the edge of collapse after warning it would hold onto thousands of sellers’ cash temporarily. The US tech giant told small firms using its platform in the UK and continental Europe that it will withhold their sale proceeds for over a week, triggering fears businesses will not have the cash to keep going. - Daily Mail
Scotland’s jobs market is struggling and pay growth is falling behind the rest of the UK as its oil industry declines, according to the Institute for Fiscal Studies (IFS). Figures show that Scotland’s employment rate has suffered a “marked deterioration” since 2014, and is now one percentage point below the national average. At the same time, earnings have grown much more slowly than in the rest of the country. - Guardian
Britain’s taxpayer-funded infrastructure bank has invested £24 million in a mining start-up hoping to produce lithium for electric vehicle batteries in Cornwall. Cornish Lithium said the UK Infrastructure Bank had led a £53.6 million funding round that would “significantly accelerate progress toward the creation of a domestic supply of battery-grade lithium compounds”. The first equity investment by UKIB, which is taking a 13 per cent stake in the company, has been matched by a further £24 million from EMG, an American private equity group, and £5.6 million from TechMet, an existing investor. - The Times
US close
Wall Street closed in negative territory on Tuesday, echoing the downward trajectory of Asian and European markets.
The lacklustre performance was primarily driven by subpar export data from China, which stirred concerns regarding the stability of the world's second-largest economy.
At the close, the Dow Jones Industrial Average was down 0.45% at 35,314.49, as the S&P 500 decreased 0.42%, finishing at 4,499.38.
The tech-heavy Nasdaq Composite experienced the steepest drop of the major indices, falling by 0.79% to 13,884.32.
On the currency front, the dollar was in a mixed state, edging up 0.05% on sterling to trade at 78.48p, and by 0.01% against the common currency to 91.28 euro cents.