Greggs swings to full-year profit, Unite Group disposes of 11 properties

London pre-open

The FTSE 100 was being called to open 79.5 points lower ahead of the bell on Tuesday after closing out the previous session 0.40% weaker at 6,959.48.

Stocks to watch

High street baker Greggs swung to a full-year profit beyond pre-pandemic levels as its stores reopened from lockdowns, but warned of significant cost headwinds in 2022 from inflation and higher commodity prices.

Greggs, famous for its sausage rolls, reported a pre-tax profit of £145.6m in the 12 months to 1 January, compared with a £13.7m loss last year and £108.3m profit in 2019.

Student accommodation provider Unite Group has disposed of a portfolio of 11 properties, a total of 4,488 beds across Sheffield, Reading, Leicester, Bedford, Liverpool, Birmingham, Bristol and Leeds, to an affiliate of Lone Star Funds.

The FTSE 250-listed group, which will receive roughly £236.0m from the sale, added that the disposal was part of its "proactive portfolio management strategy", resulting in increased alignment to high and mid-ranked universities, and was also part of an effort to exit "smaller, less operationally efficient assets" in cities such as Bristol and Leeds.

M&G announced a £500.0m share buyback as the investment manager posted reduced annual operating profit resulting partly from changes to the expected death rate.

M&G said it would buy back £500.0m of shares after generating £2.8bn of capital over two years, beating its £2.2bn target and also proposed an unchanged second interim dividend of 12.2p a share, taking its annual payout to 18.3p a share - up from 18.2p in 2020. Adjusted operating pre-tax profits fell to £721.0m in the year to the end of December from £788.0m a year earlier as assets under management rose to £370.0m from £367.2m. Profit fell partly because of lower benefits from changes to longevity assumptions.

Newspaper round-up

UK household incomes are on course to collapse by the most since the mid-1970s after Russia's invasion of Ukraine sent energy prices soaring to new highs, a thinktank has said. The Resolution Foundation said the dramatic increase in global oil and gas prices was forecast to push UK inflation above 8% this spring, causing average incomes across Britain to fall by 4% in the coming financial year – a hit worth £1,000 per household, the biggest annual decline since 1975. - Guardian

The UK tax authority has withdrawn petitions to close down four Liberty Steel companies, giving breathing space to the GFG Alliance metals empire presided over by Sanjeev Gupta. Gupta's group of metals companies, including steel, aluminium and energy plants, has been struggling for finance for a year since the collapse of its main lender, Greensill Capital. The companies are said to employ as many as 35,000 people around the world. - Guardian

Rolls-Royce's hopes of building mini nuclear power stations have taken a significant step forward after Kwasi Kwarteng, the Business Secretary, asked government regulators to assess its designs. Rolls-Royce has raised about £500.0m to develop the Small Modular Reactors reactors, which could help reduce Britain's reliance on electricity generated from fossil fuels.- Guardian

Investors with combined assets of more than $3.0trn have heaped further pressure on Amazon to increase transparency over where and how much tax it pays around the world. Shareholders in the company filed a proposal last year requesting that it disclose global tax practices and risks to investors by reporting in line with a new global tax standard and publishing country-by-country information on its finances. - The Times

A provider of electric vehicle charging points has promised to take steps to improve competition in the market after a regulatory investigation found it arranged exclusive, long-term contracts with motorway service operators. The Competition Markets Authority, which began an investigation into Gridserve last July, secured legally binding commitments from Gridserve agreeing not to enforce exclusive rights it had agreed with Extra, MOTO or Roadchef, after November 2026. - The Times

US close

Wall Street stocks were firmly in the red at the close on Monday after oil prices surged to a multi-year high amid the ongoing Russia-Ukraine war, heightening fears the conflict will slow the US economy and raise inflation.

At the close, the Dow Jones Industrial Average was down 2.37% at 32,817.38, while the S&P 500 was 2.95% softer at 4,201.09 and the Nasdaq Composite saw out the session 3.62% weaker at 12,830.96.