Royal Mail revenue rises, Mitchells & Butlers trading strong but 'volatile'

London open

The FTSE 100 is expected to open 47 points higher on Thursday, having closed up 1.47% at 7,083.37 on Wednesday.

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Royal Mail said it expected group first-half adjusted operating profit to be £395m - £400m as it reported an 8.2% rise in revenue for the five months to August. The letter and parcel carrier said revenues climbed to £5.1bn from £4.7bn as the boom in domestic parcel delivery during Covid lockdown continued. “Whilst we continue to expect further normalisation of parcel performance as we unwind from the pandemic and anticipate some upward pressure on costs, both adjusted operating profit and margin are expected to be higher in H2 compared to H1," the company said.

Mitchells & Butlers reported volatile, but “generally strengthened” trading in the 18 weeks since most of its pubs reopened, particularly since restrictions in England were eased on 19 July. The FTSE 250 company said that, since full indoor trading reopened on 17 May, like-for-like sales had been 97% of pre-Covid-19 levels, following an improvement over the most recent eight weeks to 104%. Trading was continuing to be stronger in suburban and food-led brands, particularly at the more premium end of the market.

Newspaper round-up

GSK’s chief executive, Emma Walmsley, has come under pressure from a second activist hedge fund, Bluebell Capital Partners, which has taken a stake in the drugmaker to push for change at the top, including demanding that she reapply for her job. London-based Bluebell Capital Partners has joined the US hedge fund Elliott Management on the pharmaceutical giant’s shareholder roster, with a stake reported to be worth £10m. With £100m assets under management, Bluebell is a much smaller firm than Elliott, which snapped up an undisclosed stake in April. But the two-year-old UK firm has already made waves by unseating the chief executive of the French consumer goods group Danone earlier this year. - Guardian

Airline ads that encourage taking too many flights and car makers that show SUVs tearing up the countryside are set to fall foul of a crackdown on marketing that encourages environmentally irresponsible behaviour. The Advertising Standards Authority (ASA) is to launch a series of inquiries into the environmental advertising claims and practices across a range of sectors – starting with energy, heating and transport – in a drive to support global efforts to reduce carbon emissions and battle the climate crisis. - Guardian

A British start-up has claimed a breakthrough in the development of quantum computers, creating a way for software to work across the next generation machines in a step towards making them more useful. A consortium led by Cambridge-based Riverlane has developed a system that allows one piece of code to operate on different types of quantum computers, seen as a step towards building an “operating system for quantum computing”. - Telegraph

Several American pension funds are threatening to sell their stakes in Unilever because of the decision of its Ben & Jerry’s brand to stop selling ice cream in Israeli-occupied territories. Unilever has owned Ben & Jerry’s since 2000. The brand, which has become known for its corporate activism, including marketing campaigns on criminal justice reform and the Black Lives Matter movement, said in July that it would end its licence in the Israel-occupied West Bank. The brand said then that “we believe it is inconsistent with our values for Ben & Jerry’s ice cream to be sold in the occupied Palestinian territory”. - The Times

LVMH plans to recruit 25,000 people under the age of 30 by the end of 2022. The world’s biggest luxury goods group said that it would look to hire 5,000 people through internships or apprenticeships, as well as 2,500 through permanent employment contracts in France. LVMH is run by Bernard Arnault, one of the world’s richest men. Its brands include Moët, Tiffany & Co, Louis Vuitton, Dom Perignon, Glenmorangie, Christian Dior, Celine and Tag Heuer. - The Times

US close

Wall Street finished in the green on Wednesday, as the Federal Reserve indicated it was anticipating several interest rate hikes in the next three years in its latest policy decision.

At the close, the Dow Jones Industrial Average was up 1% at 34,248.32, as the S&P 500 added 0.95% to 4,395.64 and the Nasdaq Composite advanced 1.02% to 14,896.85.

The Dow closed 338.48 points higher on Wednesday, reversing losses recorded in the prior session.

In its latest decision, the Federal Open Market Committee stood pat on the current near-zero interest rate targets, but exuded optimism around the trajectory of the Covid-19 economic recovery.

The Fed said in its statement that it could raise interest rates between six and seven times between now and the end of 2024, and added that it had progressed discussions on reducing its asset purchase programme.