Investors appeared to be keeping their powder dry on Wednesday ahead of key interest rate decisions, from the US Federal Reserve later today, and Bank of England tomorrow.
At 9am, the benchmark FTSE 100 was trading 0.25% lower at 7256.74, although mid-caps managed modest gains, the FTSE 250 nudging 0.07% higher to 23,156.07.
Overnight, US equity markets were firmer with the Nasdaq Composite edging 0.34% higher at 15,649.60, and the Dow Jones Industrial Average ticking 0.39% ahead to 36,052.63.
In the UK, a small and medium-sized enterprises trends survey revealed that two thirds of manufacturers are concerned that component and material shortages will negatively hit their production over the next three months. This is the highest reading on record since data started being tracked back in 1988.
SUPPLY CHAIN COSTS
Fashion retailer Next (NXT) was among the biggest FTSE 100 losers early on, losing 2.7% to £80.88 after flagging rising freight and online delivery costs.
That news tempered news that sales were running ahead of expectations, although the retail chain resisted any temptation to up full year guidance.
In a third quarter trading update Next reported that it expects pre-tax profit for the year to 31 January 2022 to rise 6.9% to £800 million. Full-price sales in the 13 weeks to 30 October were up 17% versus two years ago.
Next will update on its full year on 6 January 2022 when investors will get a steer on the crucial Christmas run-in and early January sales.
Veterinary group and pet products retailer Pets at Home (PETS) announced the departure of the current chief executive officer. Peter Pritchard will stand down next summer, having overseen a successful turnaround of the business.
The company also said that its anticipated underlying pre-tax profit for the year to 31 March 2022 will be towards the top of current analyst expectations. Consensus is currently pitched between £128 million and £135 million. The market was left underwhelmed, the share price slipping 1.6% to 491.39p.
Enterprise software group Micro Focus (MCRO) said it had agreed to sell its archiving and risk management portfolio to Smarsh for $375 million. The archiving business more commonly known as Digital Sage was acquired by Micro Focus in September 2017 as part of the HPE transaction.
The market was encouraged by the move and marked the shares 4% higher to 378.1p.
In a third quarter trading update, clay bricks and concrete products maker Ibstock (IBST) announced the launch of Ibstock Futures, a new business unit established to capture growth opportunities in new, fast growth sectors of the UK construction market.
The company said it had also benefited from a strong third quarter performance supported by continued robust demand in core markets. As part of Ibstock Futures launch project, the company plans to invest £50 million to build an automated brick slip systems factory in Nostell, West Yorkshire.
The planned £50 million capital investment would provide capacity for up to 60 million brick slips per annum. This news prompted a 1% jump in the share price to 204.7p.
AROUND THE MARKET
Mobile telco Airtel Africa (AAF) announced the first closing of the transaction to sell its telecommunications tower company in Madagascar to Helios Towers for $51.7 million, cash that will be used to lower net debt.
The news did little for the shares, which drifted 0.3% lower to 109.6p.
Shares in packaging company Smurfit Kappa (SKG) ticked 0.16% higher to 3872p after announcing that its earnings had risen 10% in the year to date, putting it on track to meet its annual forecasts.
Smurfit said materially higher input costs, including those for recovered fibre and energy, were being progressively recovered through corrugated price increases. Earnings before interest, tax, depreciation and amortisation for the nine months through September had increased to €1.24 billion, with a margin of 17%.
Exploration and production company Energean (ENOG) raised the lower end of its production guidance range after reporting record third-quarter production. Full year production guidance range was narrowed to 40,000 to 42,000 barrels of oil equivalent per day, or boepd, from 38,000 to 40,000.
‘We are on track to deliver record full year numbers, with annual revenues expected to be in excess of $450 million and EBITDA in excess of $190 million,’ the company said.
The shares barely moved, edging just 0.5% higher to 928.5p.
