Business information and events firm Informa was leading a rising FTSE 100 early Thursday after making an almost £2 billion divestment and launching a share buyback. Despite promising to return much more cash, both Relx and Unilever were trading lower.
Stock prices in London opened mostly higher on Thursday on a busy day for company earnings, with Informa, Relx and Unilever all announcing share buybacks.
The FTSE 100 index was up 20.62 points, or 0.3%, at 7,664.04 early Thursday. The mid-cap FTSE 250 index was up 70.87 points, or 0.3%, at 22,254.88. The AIM All-Share index was down 2.91 points, 0.2%, at 1,092.15.
The Cboe UK 100 index was up 0.3% at 760.85. The Cboe 250 was up 0.4% at 19,910.08, but the Cboe Small Companies was 0.2% lower at 15,561.02.
In mainland Europe, the CAC 40 stock index in Paris was up 0.1% and the DAX 40 in Frankfurt was 0.3% higher.
In the FTSE 100, Informa was the best performer, up 4%, after the company said it will launch a share buyback and said it saw a strong performance through 2021.
In addition, Informa agreed to sell Pharma Intelligence, the largest business within its Informa Intelligence division, to private equity firm Warburg Pincus for £1.9 billion.
The buyback programme will commence with immediate effect and run through to the AGM in June. The maximum amount allocated to the initial tranche of the buyback programme will be £100 million, Informa said.
Ahead of its annual results on March 15, Informa said it expects to report trading in 2021 was in line with guidance of £1.8 billion in revenue and £375 million in adjusted operating profit. The company posted revenue of £1.6 billion and adjusted operating profit of £267.8 million in 2020.
AstraZeneca was up 3%. The drugmaker reported a rise in annual revenue which it attributed to its pipeline and commercial delivery, alongside an accelerated strategic transformation through the acquisition of Alexion Pharmaceuticals.
For 2021, revenue rose to $37.42 billion from $26.62 billion in 2020. Looking ahead, for 2022 AstraZeneca guided at constant exchange rates for a high-teens percentage increase in total revenue and a mid-to-high twenties percentage increase in core earnings per share.
Prudential was up 2.5%. The insurer said chief executive officer Mike Wells intends to retire from his role at the insurer at the end of March 2022 and will not stand for re-election as a director at the next annual general meeting.
Prudential said it is conducting a search for a CEO to be based in Asia to succeed Wells, which includes both internal and external candidates. Wells became CEO in 2015, having first joined the insurer in 1995.
Mark FitzPatrick, currently CFO and COO, will become interim CEO when Wells steps down. FitzPatrick has asked the board not to consider him for the permanent CEO role, the company said.
At the other end of the large-caps, Relx was the worst performer, down 4%, after the data analytics provider's earnings missed market forecasts.
For 2021, Relx generated revenue of £7.24 billion, up from £7.11 billion in 2020. However, the figure missed consensus estimates of GBP7.34 billion. Pretax profit was £1.8 billion, up from £1.48 billion in 2020, but was below forecasts of £2.1 billion.
Relx raised its annual dividend by 6% to 49.8p from 47p the year before and said it will launch a £500 million share buyback in 2022.
Looking ahead, the Anglo-Dutch firm expects 2022 full year underlying growth rates in revenue and adjusted operating profit, as well as constant currency growth in adjusted earnings per share, to remain above historical trends.
Unilever was down 1.5% as the consumer goods firm promised to make no major acquisition in the ‘foreseeable future’ after its failed tilt at the GSK Consumer Healthcare business.
The Dove soap maker also reported annual results and launched a share buyback programme of up to €3 billion over the next two years.
For 2021, Unilever generated revenue of €52.44 billion, up from €50.72 billion in 2020. The figure was higher than the company-compiled consensus forecast of €52.11 billion. Pre-tax profit rose to €8.6 billion from €8 billion the year prior.
Underlying pre-tax profit was €9.6 billion, up from €9.4 billion in 2020. Underlying sales growth was 4.5% in 2021, beating the consensus estimate of 4.3%.
Looking ahead, Unilever expects underlying sales growth in 2022 in the range of 4.5% to 6.5%. It also expects high input cost inflation in the first half of over €2 billion. This may moderate in the second half to around €1.5 billion, it noted.
Chris Beckett, head of equity research at Quilter Cheviot, commented: ‘What really matters is the margin guidance for 2022, which is down 140-240 basis points, along with investment in marketing, research & development and capex. Margins are expected to recover in 2023/24, but will the market let them get away with it? Most likely, no.
‘Along with the amended margin guidance, there are serious investor concerns around the lack of management credibility, as demonstrated by investor reaction to the failed GSK bid. Management have shown they are unable to consistently grow both sales and margins and have ruled out any significant acquisitions for now.’
In the FTSE 250, Darktrace was the best performer, up 3.5%, after the cybersecurity provider said it signed a ‘million-dollar deal’ with an unnamed global electronics corporation.
In Tokyo, the Nikkei 225 index closed up 0.4% on Thursday. In China, the Shanghai Composite ended up 0.2%, while the Hang Seng index in Hong Kong was up 0.1%. The S&P/ASX 200 in Sydney closed up 0.3%.
The dollar was higher across the board. The pound was quoted at $1.3547 early Thursday in London, down from $1.3551 at the London equities close Wednesday.
The euro was priced at $1.1426, down from $1.1437. Against the Japanese yen, the dollar was trading at ¥115.63, up from ¥115.44.
Brent oil was quoted at $91.23 a barrel Thursday morning, down from $91.90 late Wednesday. Gold stood at $1,835.80 an ounce, higher against $1,830.69.
Thursday's economic calendar has the US consumer price index for January and weekly jobless claims at 1330 GMT.
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