BUSINESS LIVE: GSK sells Haleon stake; Sainsbury's agrees Microsoft AI deal; Land Securities losses narrow

GSK has finally completed the sale of its stake in consumer health spin-off Haleon after selling another £1.3billion worth of shares.

The FTSE 100 drugmaker, which span-off Haleon in July 2022, from the FTSE 100 drugmaker in July 2022, initially retained a 12.9 per cent stake after its IPO.

Sainsbury’s has agreed a five-year deal with Microsoft to use the software giant’s artificial intelligence services as part of its cost-cutting strategy.

The strategic partnership will see the supermarket giant employ Microsoft’s AI and machine learning tools to enhance store operations and provide a ‘more efficient and effective service’.

Jeremy Hunt today warned of a £38billion black hole in Labour’s funding plans – as he insisted he wants to cut taxes again this Autumn.

In a highly political speech, the Chancellor hailed the upturn in the economy and said he was keen to ‘go further’ on trimming national insurance if it was possible to do so responsibly.

(PA) – The shortage of skilled workers could cost the economy billions of pounds in the coming years if the problem persists, a report warns.

The Recruitment and Employment Confederation (REC) forecast a surge in demand for staff, coupled with continued skills shortages.

It warned that economic output and productivity could fall by 1.2% by 2027, costing the economy between £30billion and £39billion every year.

REC chief executive Neil Carberry said: “The UK can only compete on the quality and skill of our workforce. Employers and politicians need to realise that getting the people stuff right is critical to commercial success.

“Firms need to take a more added-value approach to how they recruit, working with professional recruiters.

“Governments across the UK need a proper people angle to their industrial strategy, based on an understanding of what people want from work today and the challenges they face, not the preconceptions of Whitehall, Westminster or the other capitals.

London-listed stocks are trading slightly lower this morning as gains in the personal goods sector are offset by losses in travel shares, while investors await comments from Bank of England’s monetary policy panel member Catherine Mann later today.

Personal goods shares lead the gains among sectors, led by 2.7 per cent jump in shares of Watches of Switzerland .

Investors will closely monitor comments from BoE’s monetary policy committee member Catherine Mann on how soon the UK central bank can start easing borrowing costs.

Money markets have priced in a possibility of around 60 basis points (bps) of interest rate cuts in 2024 by the BoE, with the first cut expected in August.

GSK is down 0.6 per cent after the drugmaker raised £1.25billion from selling its entire remaining stake in consumer healthcare firm Haleon.

Auto Trader Group has slipped 3.7 per cent to the bottom of FTSE 100 after Morgan Stanley cut rating and target price on the stock.

We’re often led to believe that house prices will always rise over the long-run. That it’s one of the safest and soundest investments one can make.

Over the last 50 years, the average UK house price has risen from £8,915 in 1974 to £280,660 today, based on the latest Land Registry figures.

The water company accused of pumping millions of litres of sewage into Lake Windermere has dished out nearly £340million to shareholders as it celebrates a record year.

United Utilities raked in just under £2billion in revenues in the 12 months to March 31 – up 8.1 per cent on the previous year. It also paid dividends worth £339million.

The biggest shareholder in HSBC looks set to cut its stake in what could be a major victory for the banking giant.

The Chinese insurance group Ping An has an 8 per cent holding in Europe’s largest lender, worth some £10billion.

Chevron will sell its remaining oil and gas assets in the North Sea as it leaves the region after more than five decades.

The US energy giant, the third-largest in the world by market value, is putting its assets up for sale. A successful deal could raise an estimated £800million.

Oli Creasey, property analyst at Quilter Cheviot:

‘Landsec’s full year announcement this morning looks back on a tricky 2024, albeit one that the company navigated fairly well. The NAV fell 8% in the year to March 2024, roughly evenly split between H1 and H2, as yields in most of Landsec’s chosen property sectors continued to slide outwards over the course of the year. There were outliers – the yield on Landsec’s outlet malls came in 40bps in H2, but that was an exception rather than the rule.

‘The company has seen EPS (adjusted to exclude property revaluation) fall around 6%, even as rents grew 3% like-for-like. This is a result of property sales during the year, but also increasing finance costs, which were up over 20% year-on-year. The company expects 2025 earnings to be slightly lower again following further asset sales post-year end, although we note that earnings should remain comfortably above the 39.6p dividend paid last year.

‘Company management have made some relatively optimistic statements this morning, noting that their outlook is more positive, and that “high quality asset values have largely bottomed out”. That is probably more-or-less true, but we worry it is a little too early to call the precise bottom of the market, particularly for Landsec, whose portfolio is around 50% in London offices and mixed-use urban developments – assets whose values fell most in 2024 (-6.5% / -14% respectively), and where the outlook remains cloudy.

‘Management also noted that the refinancing of cheap debt remains a challenge for some property companies. Landsec have been selling assets, partly to position the portfolio to align with CEO Mark Allen’s 2020 vision, but also to keep the LTV under control. The EPRA LTV rose to 36.3% in March 2024, but would likely have been higher still had it not been for the sale of assets during the year.’

British commercial property firm Land Securities Group narrowed its losses last year, thanks to rental growth and higher occupancy levels, while a key metric that gauges the value of its buildings topped market view.

The London-headquartered company said its EPRA net tangible assets per share – an industry measure that reflects the value of its buildings – fell 8 per cent to 859p for the year ended 31 March, beating company-compiled analysts’ consensus of 852p

High interest rates and incessant macro-economic worries have dampened a tentative recovery in the highly leveraged British commercial property sector from pandemic lows, while the office space portfolio has struggled amid evolving work habits.

‘Our continued operational outperformance, with rising occupancy and positive rental uplifts in retail and London, is driving robust like-for-like rental income growth,’ Boss Mark Allan said.

The head of the London Stock Exchange yesterday said there was a ‘strong cause for optimism’ in the City as companies worth billions of pounds look at listing in the UK.

Julia Hoggett said there was ‘no sense of panic’ after a recent exodus led to anguished soul-searching about London’s future as a global financial centre.

Instead, hopes are rising that after a prolonged winter for the London market, spring is at last arriving, with a series of flotations from fashion giant Shein to retailer Boots that could help it burst back into life.

Sainsbury’s has agreed a five-year strategic partnership with Microsoft that will combine the technology company’s artificial intelligence capabilities and the supermarket group’s rich data.

Seeking revenue gains and cost savings, more retailers are using generative AI to boost personalised shopping experiences for consumers and make staff working practices more efficient.

Sainsbury’s, Britain’s second-largest grocer after Tesco , said it would use AI to create a more interactive shopping experience for online shoppers, while also improving search functions.

Clodagh Moriarty, Sainsbury’s chief retail and technology officer, said:

‘Our collaboration with Microsoft will accelerate our ambition to become the UK’s leading AI-enabled grocer.

‘It’s one of the key ways we’re investing in transforming our capabilities over the next three years, enabling us to take another big leap forward in efficiency and productivity, continue to provide leading customer service and deliver returns for our shareholders.’

Wall Street clocked up fresh records last night amid growing hopes of interest rate cuts.

The Dow Jones Industrial Average – one of the world’s leading benchmarks – hit the 40,000 mark for the first time in early trading. It eventually closed at 39,869.38.

The S&P 500 and Nasdaq also hit new highs days after figures showed inflation in the US cooled last month.

GSK has raised almost £1.3billion from selling its entire remaining stake in consumer health firm Haleon, which span-out from the FTSE 100 drugmaker in July 2022.

The pharma giant initially retained a 12.9 per cent stake in Haleon after its IPO and, having now sold its shares, has raised a total of around £3.9billion.

GSK said in a short statement this morning: ‘GSK’s exit of its position in Haleon is consistent with its previous commitments to monetise its holding in a disciplined manner.’