BAT finally offloads Russian business, Synthomer revenue and earnings fall
London open
The FTSE 100 is expected to open 30 points lower on Thursday, having closed down 0.16% on Wednesday at 7,426.14.
Stocks to watch
British American Tobacco on Thursday said it had finally signed a deal to sell its Russian and Belarusian businesses to a consortium led by local management. The owner of Lucky Strike and Dunhill brands announced last year that the ownership of its operations in Russia "was no longer sustainable in the current environment" after Moscow's unprovoked invasion of Ukraine. Post completion of the deal the two businesses will be known as the ITMS Group. BAT did not provide any financial details, but maintained guidance for the full year and said it was confident of meeting expectations after the sale.
Synthomer reported a 12.5% decline in first-half revenues on Thursday, to £1.08bn, and a drop in EBITDA and underlying operating profit by 55.8% and 81.3%, respectively. Despite challenging macroeconomic conditions, the FTSE 250 firm said its specialty businesses sustained performance with improved volumes, particularly in coatings and construction solutions. To strengthen its financial position, Synthomer announced a £276m rights issue, managed to divest multiple businesses, and implemented cash management and savings initiatives, aiming to achieve £20m in self-help measures by the second half.
Insurance group Beazley said it remains on track to hit guidance after delivering record profits in the first half, though its combined ratio jumped. Pre-tax profit totalled $366.4m in the six months to 30 June, up only slightly from $364.9m a year earlier, despite insurance written premiums rising 13% to $2.92bn. The discounted combined ratio, a key measure of profitability, increased to 84% from 71%.
Newspaper round-up
Google faces a new multibillion-pound lawsuit from UK consumers accusing the company of contributing to cost-of-living price rises. The lawsuit, on behalf of every consumer in the UK, says that Google has stifled competition in the search engine market, which caused prices to rise across the UK economy. – Guardian
The BBC should hand all licence fee payers a stake in the broadcaster to improve its “out of touch” agenda and give households more say over its future, according to Sir John Redwood. Sir John, the former head of Margaret Thatcher’s policy unit, said the corporation would be “transformed by wider ownership”. – Telegraph
Waitrose staff have been warned that jobs are at risk as the retailer overhauls its business in an effort to boost productivity. Tina Mitchell, retail director at Waitrose, allegedly warned employees that efforts to streamline the loss-making grocer “may result in some partners leaving the business”. - Telegraph
The owner of British Airways is sitting on a potential windfall profit from hundreds of millions of pounds worth of flight vouchers issued during the pandemic and never redeemed. IAG, which also owns Iberia, Aer Lingus and Vueling, revealed in its last annual report that it had about £550 million worth of unclaimed vouchers. British Airways and other airlines offered passengers vouchers rather than refunds when their flights were cancelled at short notice. Thousands of passengers took up the offer, but a substantial number have not claimed their new flights. – The Times
Goldman Sachs has landed what it believes to be the biggest deal of its kind in the UK, winning the contract to choose and manage the investments of the £23 billion BAE Systems pension funds. The American bank clinched the mandate by agreeing to hire the defence group’s 49 financial staff who currently make the investment decisions for the pension schemes. – The Times
US close
Wall Street witnessed a dip in performance on Wednesday, as investors grappled with renewed inflationary anxieties, stemming from a noticeable uptick in bond yields and crude oil prices.
The Dow Jones Industrial Average saw a decline of 0.57%, ending the trading session at 34,443.19 points.
Similarly, the broader S&P 500 index fell by 0.7%, settling at 4,465.48 points, while the tech-heavy Nasdaq Composite faced the most significant hit amongst the major indices, closing 1.06% down at 13,872.47.
On the currency front, the dollar was last up 0.11% on sterling at 80.04p and ahead 0.09% against the euro at 93.3 euro cents.
It slid against the yen by 0.11%, however, changing hands at JPY 147.50.