Yahoo Finance FTSE 100 Live 17 October: Entain and Rentokil Initial shares rally, fashion firm in £191m takeover
FTSE 100 Live Thursday
Simply Be owner in £191m takeover
UK orders lift Deliveroo performance
Nestle downgrades guidance
Market update: Entain and Rentokil in demand, Deliveroo shares higher
09:58 , Graeme Evans
Recovery bets on Rentokil Initial and Entain today ensured their shares made the running in an otherwise lacklustre session for the FTSE 100 index.
Ladbrokes and BetMGM business Entain jumped 4% or 27.6p to 739.6p after it upgraded earnings guidance on the back of a strong third quarter.
The UK and Ireland division returned to year-on-year growth sooner than expected, driven by betting ahead of England’s Euro 2024 final against Spain.
TV primetime NFL fixtures also boosted revenues as the company forecast earnings at the top of the £1.04 billion-£1.09 billion guidance range.
The shares are still down 25% this year, having fallen this week on speculation that this month’s Budget will include a £3 billion tax raid on the industry.
Rentokil Initial also put back some of its recent heavy losses, rising 7% or 24.5p to 365.6p on relief at no further setback in its trading performance.
Its previous update in September revealed lower than expected volumes in North America, having expanded resources in readiness for the peak season.
The pest control firm said today that North America revenues grew by 1.4% in the third quarter while it stepped up efforts to rebalance the cost base.
The shares remain 14% lower year-to-date, having traded above 600p in 2023.
Weaker mining stocks meant the wider FTSE 100 index failed to capture much further upside after yesterday’s interest rate driven 1% advance.
The top flight edged 10.86 points higher at 8339.93, reflecting caution ahead of an expected back-to-back interest rate cut by the European Central Bank.
The FTSE 250 index rose 39.87 points to 21,019.37, with Chemring up 9p to 375p after the defence products firm posted an in-line trading update and said it was well placed to meet an ambition of £1 billion revenues by 2030.
Tate & Lyle shares weakened 15.5p to 791.5p, having risen 8% yesterday on the back of speculation that it is a takeover target for private equity firm Advent.
The food ingredients firm, which is worth about £3 billion, has not commented.
Meanwhile, Deliveroo shares have risen 3.3p to 150.2p after it said earnings will be in the top half of its forecast range, boosted by strong UK demand.
Nestle downgrades guidance amid consumer caution
09:19 , Graeme Evans
Consumer goods giant Nestlé has lowered its full-year guidance after reporting sales growth of 2% for the nine months of the year.
Amid softer consumer demand and some hesitancy towards global brands, it now expects organic sales growth to be around 2% in 2024. This compares with the 3% guidance given with half-year results.
Coffee was the largest growth contributor in today’s third quarter results, with mid single-digit growth driven by the leading brands Nescafé, Starbucks and Nespresso.
Purina PetCare delivered low single-digit growth and sales in confectionery grew at a mid single-digit rate, led by KitKat.
Rentokil Initial shares rally on reassuring update
08:57 , Graeme Evans
A robust update today lifted the under-pressure shares of pest control firm Rentokil Initial to the top of the FTSE 100 index.
The surge of 8% or 26.4p to 367.5p reduces the year-to-date decline to 15%.
Its previous update in September revealed lower than expected volumes in North America, having expanded resources in readiness for the peak season.
Rentokil said today that North America revenues grew by 1.4% in the third quarter while it has stepped up efforts to rebalance the cost base.
Chief executive Andy Ransom told investors: “In North America, we recognise the business has underperformed and we are focused on delivering the operational improvements required.
“We are expanding our initiatives to increase organic growth and we are taking action to mitigate cost overruns.”
He left 2024 revenue and margin guidance unchanged, with Ransom backing the North American division to “lead a highly resilient, growing market".
Rentokil and Entain rally in FTSE 100, Tate & Lyle shares fall back
08:33 , Graeme Evans
The FTSE 100 index has failed to build on yesterday’s 1% advance, with pressure on mining stocks causing London’s top flight to fall 5.64 points at 8323.43.
As well as weaker Glencore and Rio Tinto shares, Mondi is down 94p to 1296p as investors reacted to the paper and packaging firm’s latest update.
Meanwhile, Rentokil Initial shares have rallied 27p to 368.1p after reassuring third quarter results included no change to full-year guidance.
Gambling group Entain also improved 4% or 28.2p to 740.2p after upgrading full-year earnings guidance.
The FTSE 250 index is 7.60 points lower at 20,971.90.
Tate & Lyle shares are 21.5p lower at 785.5p, having risen 8% yesterday on the back of speculation that it is a takeover target for private equity firm Advent.
The FTSE 250-listed company, which is worth about £3 billion, has not commented.
Meanwhile, Deliveroo shares are up 6.7p to 153.6p after it said earnings will be in the top half of its forecast range.
Simply Be owner N Brown in £191m takeover
08:05 , Graeme Evans
N Brown, the fashion group that owns the Jacamo, Simply Be and JD Williams brands, has backed a £191 million takeover from the son of its long standing former chairman Lord Alliance.
A company owned by entrepreneur Joshua Alliance, who is also a non-executive director in the Manchester based group, has offered 40p a share in cash compared with last night’s closing price of 27p.
The Alliance family already own around 60% of N Brown’s shares.
The bid vehicle said reasons for the offer included N Brown’s low trading liquidity and the limited UK fund manager appetite for small cap consumer stocks
Deliveroo UK orders grow 2% in third quarter
07:58 , Graeme Evans
Deliveroo today said annual earnings will be in the upper half of its £110-130 million guidance range.
Gross transaction value rose 5% in the three months to 30 September, with the UK and Ireland division up by 7% following order growth of 2%.
Transaction growth for the financial year is set to be in the range of 5% and 9%.
Founder and chief executive Will Shu believes his company is well-placed to capture the “significant growth potential in an industry still early in its maturity"
He added: “There are many exciting opportunities ahead for the on-demand delivery industry.”
The shares are up 16% to 147p this year, having rallied from 125p in early August.
Europe set for back-to-back interest rate cut
07:38 , Graeme Evans
The European Central Bank interest rates are set to fall for the third time this year when policymakers announce their decision later today.
The quarter point reduction in the deposit rate to 3.25% follows a run of weak economic data and signs of inflation returning to target.
Deutsche Bank economists said the first back-to-back cut of the cycle signalled a pivot towards faster easing.
Despite this, the bank is not expecting the ECB to move away from the current 'data dependent, meeting by meeting' approach to policy.
Following today, Deutsche Bank sees the ECB cutting at each meeting until rates reach 2.25% in April.
Entain earnings get Euro 2024 boost
07:22 , Graeme Evans
Ladbrokes and BetMGM gambling business Entain today lifted earnings guidance on the back of a forecast-beating performance in the third quarter.
Its top ten most popular betting matches in the period were the final three Euro 2024 fixtures and seven TV primetime NFL games.
Entain’s UK and Ireland division returned to year-on-year growth sooner than expected, with net gaming revenues up 2% in the three months.
The BetMGM joint venture in the United States grew revenues by 18%.
Entain’s underlying earnings for this year are now expected to be towards the top of the £1.04 billion-£1.09 billion guidance range.
Chief executive Gavin Isaacs said: “My first few weeks as CEO of Entain have reaffirmed my view that this is a very good business operating in a highly attractive global industry.”
FTSE 100 set to extend rally, European interest rates in focus
07:03 , Graeme Evans
The FTSE 100 index is set to rise by another 28 points to 8358, having last night closed 1% higher on the back of hopes for a faster pace of interest rate cuts.
Today’s advance follows a robust session on Wall Street as the Dow Jones Industrial Average closed 0.8% higher and the S&P 500 index rose 0.5%.
The tech-focused Nasdaq also steadied after the previous day’s warning by semiconductor equipment firm ASML Holdings shook confidence.
Today’s events include the prospect of another quarter point cut in the European Central Bank’s main policy rates.
The pound continues to trade just below $1.30, while Brent Crude is little changed at $74.40 a barrel.
