HSS Hire sales slow ‘considerably’ as weak market conditions hit demand

Tool and equipment firm HSS said trading slowed considerably over the past 12 weeks as the company was knocked by weak market conditions.

HSS Hire Group shares dropped in early trading on Thursday as a result.

It came as the London-listed company revealed a dip in profits for the first half of 2023, while sales grew by 6.3%.

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Average five-year fixed-rate mortgage falls back below 6%

The average five-year fixed-rate residential mortgage has dropped back below 6% today, in the latest sign of good news for homeowners and prospective buyers.

According to data from Moneyfacts, the average rate on a five-year deal fell to 5.99% today, from 6.03% on Wednesday.

The average two-year deal also declined, falling to 6.50% from 6.53%.

Mortgage lenders have been cutting rates for almost two months, after they peaked at 6.37% in early August, the highest rate in 15 years and beyond even the aftermath of last year’s mini-Budget.

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IAG down 3% as FTSE 100 struggles, AB Dynamics rallies

The FTSE 100 index came under fresh pressure today as worries that inflation will take longer to fall back to target levels were fuelled by higher oil prices. The top flight fell 57.85 points to 7535.37.

Stocks under pressure included British AIrways owner IAG, which dropped 3% or 4.55p to 144.1p, and BT Group after a decline of 2.75p to 114.5p.

Barratt Developments and M&G also tumbled 7% and 5% respectively as they began trading without the value of upcoming dividend awards.

A shortened risers board was led by Severn Trent, up 10p to 2320p as analysts at Barclays gave the water company an “overweight” recommendation and target of 3360p.

The FTSE 250 index retreated 107.75 points at 18,112.48, with big fallers including Royal Mail owner International Distribution Services down 7.6p to 255.8p.

On the risers board, defence engineering firm Babcock International surged 6% or 22.6p to 411p after it provided a reassuring update on its turnaround progress. The AGM statement highlighted improved cash flows compared with the previous year.

Top performing stocks on the AIM junior market included vehicle testing and simulation firm AB Dynamics, which lifted 28p to 1668p as it said better-than-expected trading left it on track for annual revenues above £100 million for the first time. Analysts at Liberum said the strong momentum justified a price target of 2700p.

Poundland owner launches review as Central and Eastern Europe arm struggles

Poundland owner Pepco said it will “refocus” on its struggling Central and Eastern Europe arm, as it reshuffled its management team following a second profit warning in two weeks.

The business said “record warm weather” in its core markets led to poor demand for clothes in countries like Poland and the Czech Republic, as sales declined year-on-year. It hasn’t yet benefited from a slowdown in inflation, as it’s still selling items that were bought earlier in the year at high costs.

The warning comes despite the Poundland arm of the business performing better, after record quarterly sales in the three months to 30 June.

Despite the strong performance in the UK, Pepco launched a strategy review, which will focus on getting the “core” Central and Eastern Europe business back on track. The group also reshuffled its management team, putting Poundland boss Barry Williams in charge of the Central and Eastern Europe-based Pepco brand instead, with the previous boss of that arm Anand Patel leaving with immediate effect.

Executive chair Andy Bond said: “We need to improve profitability and cash generation in our established business alongside a more targeted growth plan in markets where we have an existing presence.”

Earlier this month, Poundland expanded its UK estate when it agreed to buy 71 former Wilko shops. These stores will be rebranded as Poundlands.

Jack Ma-owned London fintech WorldFirst has shifted its Asia business away from UK oversight in a major restructuring, the firm’s accounts published today show.

WorldFirst Asia, a business unit which accounted for around two-thirds of the company’s revenues and 70% of its profits, has been transferred to an Asian subsidiary of billionaire Ma’s Ant Group. WorldFirst said it took the decision in January based on “the strategic alignment of the legal entities.”

In July, Ant Group was fined around £800 million by the Chinese financial regulator after it was accused of violating rules on corporate governance, financial consumer protection, payment and settlement business, as well as anti-money laundering obligations.

WorldFirst, which was acquired by Ant Group in 2019 in a deal thought to be worth more than $700 million (£550 million), last year began an internal overhaul dubbed the ‘Global Base Line’ project, in which a string of management, risk, and oversight functions at the firm were moved from the UK to China.

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Apple’s ex-design chief seeks $1 billion to build iPhone rival

Apple’s former head of design is in talks to raise $1 billion dollars to take on its iPhone with an AI-powered rival.

London-born Jony Ive, whose work was instrumental to the design of a suite of Apple products including the iPod, iPhone and MacBook, is seeking to raise the funds from Japanese investing giant SoftBank in a partnership with ChatGPT maker OpenAI, according the FT.

Ive and OpenAI boss Sam Altman are exploring what an AI-powered consumer device would look like, including how to make the user experience more intuitive than the iPhone.

Ive left apple in 2019 after a near 30-year career there.

Oil stocks support FTSE 100, Babcock shares surge 10%

The FTSE 100 index is broadly unchanged this morning after shares in oil majors BP and Shell rose by around 1% on the back of last night’s latest surge in Brent Crude futures.

Severn Trent is the best performing blue-chip company, up 38p to 2348p as analysts at Barclays gave the water company an “overweight” recommendation and target of 3360p.

At the top of the FTSE 100 fallers board, Barratt Developments and M&G are down by 5% and 3% respectively as they are now trading without the value of upcoming dividend awards.

The FTSE 250 index is 18.83 points lower at 18,201.40, with shares in WIlliam Hill owner 888 Holdings down 12% or 12.85p to 97.65p after today’s profit warning.

On the risers board, defence business Babcock International is up by 10% or 39p to 427.4p following a reassuring update on its turnaround progress.

And pubs group Mitchells & Butlers is 5.4p higher at 220p after forecasting results at the top end of expectations as cost pressures abate.

Brent crude up 0.75%

A few minutes into the day’s trading session in London, the FTSE 100 is flat while brent crude is up 0.75%. Here’s a look at your key market data:

Oil prices near $100 a barrel, Asia markets struggle

Brent Crude futures today stood at $97.53, the oil benchmark’s highest level since last November after figures yesterday showed a big drop in US stockpiles.

The bigger-than-expected fall of 2.2 million million barrels has added to supply concerns after Saudi Arabia extended its voluntary output cut through to the end of the year.

The recent climb in oil prices has fuelled worries that inflation will take longer to fall back to target levels, forcing central banks to keep interest rates high for longer.

The S&P 500 index is at a three-month low after a 4% decline in the past week but steadied last night. The FTSE 100 index, which fell by 0.4% last yesterday, is forecast by CMC Markets to open 17 points higher at 7610 as traders carry out quarter-end positioning.

In Asia, Tokyo’s Nikkei 225 and the Hang Seng are both down by more than 1% as the Hong Kong-based benchmark heads for its lowest close of the year.

The selling came as it emerged that shares in China’s debt-laden property giant Evergrande have been suspended.

888 warns on profits days after rival Entain

William Hill owner 888 has become the second gambling giant in four days to warn investors of the impact of factors including new UK safer gambling rules.

The business issued a profit warning today, revealing it now expects revenue to decline by a larger-than-thought 10% and margins to come in lower than expected at 10%.

Like Entain earlier in the week, 888 blamed bettor-friendly sporting results and the safer gambling reforms that the Government announced in April. 888 also noted an “ongoing significant impact from compliance changes implemented in dotcom markets”, where the legal status of online gambling is often ill-defined. 888 made major changes to its policies in these countries after launching an internal probe in January into the checks it performed on Middle Eastern high rollers.

Executive chair Lord Mendelsohn said: “We are making significant strides to improve the quality and long-term sustainability of our revenues, but performance in Q3 has been below our expectations, and this means we now expect to end the year with EBITDA below our prior expectation.”

888 shares closed at 109.9p yesterday, up 24.9% for the year but down 80% from their peak in 2021. They are down 8.2% over the last week, mostly due to read-across from the Entain revenue warning.