Centrica posts fall in profits, Relx reports growth

London open

The FTSE 100 is expected to open 45 points higher on Thursday, having closed up 0.75% on Wednesday at 7,568.40.

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British Gas owner Centrica posted a fall in annual profits on the back of “sharply lower” commodity prices. Adjusted operating profit for the year to December 2023 came in at £2.72bn from £3.3bn. The full-year dividend was up 33% to 4p a share. “As you would expect, sharply lower commodity prices and reduced volatility will naturally lower earnings in comparison to 2023 as we return to a more normalised environment,” said chief executive Chris O’Shea.

Business information and analytics firm Relx reported robust growth in 2023 on Thursday, with revenue rising an underlying 8% to £9.16bn, alongside an adjusted operating profit of £3.03bn, reflecting a 13% increase. Adjusted earnings per share rose 11% on a constant currency basis to 114p. Looking at 2024, Relx anticipated sustained positive momentum with expectations for strong underlying growth in revenue and adjusted operating profit, as well as significant growth in adjusted earnings per share.

Newspaper round-up

The Bank of England governor has doused hopes that better-than-expected inflation news last month will accelerate cuts in interest rates, stressing the need for further evidence of wage moderation before Threadneedle Street moves. Appearing before the House of Lords economics committee on Wednesday, Andrew Bailey said it was “encouraging” that inflation had remained unchanged at 4% in January but the previous month’s figure for the cost of living had been higher than predicted. – Guardian

Virgin Money bosses could be at risk of an embarrassing investor backlash, after an influential adviser hit out at a £2.6m package for its chief executive, David Duffy, saying it was “not appropriate” compared with the bank’s average employee. Pensions and Investment Research Consultants (Pirc), which advises shareholders including UK local authority pension funds, also raised concerns over what it said was “a lack of board-level accountability for sustainability issues” at Britain’s sixth largest lender. – Guardian

NatWest is poised to appoint an insider as chief executive in an effort to move on from its costly debanking crisis. The FTSE 100 bank is preparing to appoint interim chief Paul Thwaite to the role full-time. The board will meet on Thursday to approve the decision with confirmation expected on Friday when NatWest publishes its annual results. – Telegraph

Executives at Lyft were left red-faced after a typo in the ride-hailing company’s financial results prompted a near-70 per cent jump in its share price before the error was spotted and the gains fell away dramatically. The turbulent trading began when Lyft reported that its margin growth for the year ahead would be far better than expected, up by five percentage points in 2024 compared with last year. – The Times

One of Britain’s key producers of reinforced steel has been put up for sale by its Spanish parent company. The Celsa Steel UK plant in Cardiff, which has been supplying the vast Hinkley Point nuclear power station project in Somerset, claims to be the largest producer of reinforced steel for the British construction market and one of the country’s largest recyclers of scrap metal, which it uses to feed its electric arc furnaces. – The Times

US close

US stocks closed higher on Wednesday as major indices attempted to bounce back from yesterday's CPI-fuelled heavy sell-off.

At the close, the Dow Jones Industrial Average was up 0.40% at 38,424.27, while the S&P 500 advanced 0.96% to 5,000.62, and the Nasdaq Composite saw out the session 1.30% firmer at 15,859.15.

The Dow closed 151.52 points higher on Wednesday, taking only a small bite out of losses recorded in the previous session as hotter-than-expected inflation data led to a sell-off that saw the Street register its worst day since March 2023 as traders worried that the Federal Reserve may not cut interest rates quite as early as initially hoped.

The consumer price index gained 0.3% in January versus December and was 3.1% higher year-on-year, with economists originally expecting to see a 0.2% and 2.9% increase, respectively.

This means January's CPI reading likely pushes the likelihood of the central bank making any changes to interest rate policy out to the second half of the year - later than previous expectations of a rate cut taking place as early as March.

On the macro front, mortgage applications fell 2.3% in the week ended 9 February, according to the Mortgage Bankers Association, cutting into the prior week's 3.7% increase and marking the second fall in mortgage demand so far this year.