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LONDON BRIEFING: Unilever sets new buyback; Astra profit surges

8th Feb 2024 07:50

(Alliance News) - Stocks in London are called to open slightly higher on Thursday, as investors eye a busy day of earnings.

Chinese consumer prices fell in January at their quickest rate in more than 14 years, data showed Thursday, as the country's leaders struggle to revive buying sentiment in the world's second-biggest economy.

The 0.8% drop in the consumer price index, revealed by the National Bureau of Statistics, marked the fourth straight month of deflation and was much bigger than the 0.5% fall forecast in a survey by Bloomberg News.

Here is what you need to know at the London market open:

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MARKETS

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FTSE 100: called up 0.1% at 7,632.80

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Hang Seng: down 1.3% at 15,879.83

Nikkei 225: closed up 2.1% at 36,863.28

S&P/ASX 200: closed up 0.3% at 7,639.20

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DJIA: closed up 156.00 points, 0.4%, at 38,677.36

S&P 500: closed up 40.83 points, 0.8%, at 4,995.06

Nasdaq Composite: closed up 147.65 points, 1.0%, to 15,756.64

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EUR: up at USD1.0786 (USD1.0765)

GBP: up at USD1.2631 (USD1.2623)

USD: up at JPY148.75 (JPY148.01)

Gold: down at USD2,033.01 per ounce (USD2,039.13)

(Brent): up at USD79.46 a barrel (USD78.98)

(changes since previous London equities close)

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ECONOMICS

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Thursday's key economic events still to come:

14:15 CET eurozone ECB executive board member Frank Elderson speaks

15:30 CET eurozone ECB executive board member Philip Lane speaks

13:30 EST US initial jobless claims

15:00 EST US wholesale inventories

15:30 EST US EIA natural gas storage

17:00 EST US 15-year fixed rate mortgage average

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Job vacancies in the UK have fallen for the fourth time in five months amid continued uncertainty about the economic outlook, according to new research. Recruitment agencies reported a fall in placing candidates into permanent jobs, leading to an increase in staff availability. A survey of 400 recruiters found that many firms had often put plans to hire staff on hold. The Recruitment & Employment Confederation and KPMG said their study found demand for staff had fallen. Neil Carberry, REC chief executive, said: "The labour market's resilience is a great strength of the British economy – but it can't last for ever without sustained economic growth."

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BROKER RATING CHANGES

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Jefferies cuts Barratt Developments price target to 576 (583) pence - 'hold'

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Jefferies cuts Redrow to 'hold' (buy) - price target 721 (774) pence

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JPMorgan raises Babcock International target to 630 (610) pence - 'overweight'

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COMPANIES - FTSE 100

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AstraZeneca reported that in 2023 total revenue increased to USD45.81 billion from USD44.35 billion a year earlier. The Cambridge, England-based pharmaceutical company's pretax profit more than doubled to USD6.90 billion from USD2.50 billion. Cost of sales fell to USD8.27 billion from USD12.39 billion. Astra said it will pay out a second interim dividend of USD1.97 per share, resulting in a full-year dividend per share of USD2.90. Chief Executive Pascal Soriot said "We expect another year of strong growth in 2024, driven by continued adoption of our medicines across geographies. Our differentiated and growing portfolio of approved medicines, global reach and rich [research & development] pipeline give us confidence that we will continue to deliver industry-leading growth."

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Unilever said turnover in 2023 came in at EUR59.60 billion, down 0.8% from EUR60.07 billion a year earlier. The London-based maker of food & drink, cleaning, toiletry, and personal care products saw its pretax fall 9.7% to EUR9.34 billion from EUR10.34 billion. On the back of the result, Unilever kept its fourth-quarter dividend at EUR0.4268. It also set a share buyback programme of up to EUR1.5 billion in 2024, after EUR3.0 billion in 2023. Looking ahead, Unilever expects underlying sales growth for 2024 to be within its multi-year range of 3% to 5%, with more balance between volume and price. Chief Executive Officer Hein Schumacher commented: "Today's results show an improving financial performance, with the return to volume growth and margins rebuilding. However, our competitiveness remains disappointing and overall performance needs to improve. We are working to address this by improving our execution to unlock Unilever's full potential."

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British American Tobacco reported that in 2023 revenue fell to GBP27.28 billion from GBP27.66 billion a year earlier. The maker of cigarettes and vapes swung to a pretax loss of GBP17.06 billion from a profit of GBP9.32 billion. Yet, BAT upped its dividend by 2.0% to 235.52p, it said that was in line with its progressive dividend increase approach. "2023 was another year of resilient financial performance and delivery in line with our guidance, underpinned by our global footprint and multi-category strategy, despite a challenging macro-environment," Chief Executive Tadeu Marroco said. Looking ahead, BAT expects low-single figure organic revenue growth in 2024, with low-single figure organic adjusted profit from operations growth.

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COMPANIES - FTSE 250

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Watches of Switzerland said that in the 13 weeks to January 28, revenue fell to GBP397 million from GBP407 million a year earlier. The Leicester, England-based watch retailer, whose key brands include Rolex, Cartier and Patek Phillipe, noted that "trading in the run-up to and beyond Christmas was tougher than originally expected, particularly in the UK amidst slower demand for luxury discretionary purchases." It added that trading conditions experienced in the third quarter of financial 2024 in the UK and US are expected to continue over the remainder of the fiscal year. Looking ahead, Watches of Switzerland reiterated its guidance from January. In January, said it forecasts between GBP1.53 billion and GBP1.55 billion in revenue for the year, down from previous guidance of GBP1.65 billion to GBP1.70 billion and stable with GBP1.54 billion in financial 2023.

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PPHE Hotel Group said it has appointed Greg Hegarty as its co-CEO. He will pick up the position at the London-based hotel and resort operator immediately, working alongside Boris Ivesha. Hegarty has been with the company for 18 years in various leadership positions and was appointed as chief operating officer in 2019 and deputy CEO & COO in 2020. "Greg's appointment to co-CEO provides important additional leadership support for the group, as we deliver the latest phase of our exciting growth trajectory. His appointment is in keeping with the group's longstanding emphasis on promoting internal talent and intra-group mobility, and we are very proud of his progression since joining PPHE," Ivesha said.

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OTHER COMPANIES

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Disney launched a USD3 billion share buyback programme, boosted its dividend and predicted strong growth ahead, as it reported much improved profitability in the first quarter. The Los Angeles, California-based multi-media business said revenue in the three months to December 30 reached USD23.55 billion, little changed from USD23.51 billion a year ago. But there was a marked improvement in profitability. Pretax income jumped 62% to USD2.87 billion from USD1.77 billion last year, with diluted earnings per share rising 49% to USD1.04 from USD0.70. Based on the strength of the first quarter, Disney expects financial 2024 EPS to increase by at least 20% versus 2023, to around USD4.60. The company said it was on track to meet or exceed its USD7.5 billion annualised savings target by the end of fiscal 2024, and continues to look for further efficiency opportunities. It also revealed plans to target USD3 billion in shares repurchases in financial 2024.

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By Sophie Rose, Alliance News senior reporter

Comments and questions to [email protected]

Copyright 2024 Alliance News Ltd. All Rights Reserved.

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