BUSINESS LIVE: Shell expects weaker gas performance; Majestic rescues Vagabond bars; House prices fall

Just before close, the FTSE 100 was 0.9% down at 7,903.79.

Meanwhile, the FTSE 250 was 0.77% lower at 9,720.47.

(PA) – Tesco is expected to reveal higher profits as sales have continued to grow despite a slowdown in food price inflation.

Investors have been in positive spirits in recent months, particularly after Tesco upgraded its profit targets in a post-Christmas trading update.

Its shares struck their highest level for almost two years as a result, with the retail giant’s investment in pricing helping to maintain growth despite competition from fast-growing discount rivals.

Shareholders in the business will be hopeful that this can translate to another positive trading outlook when it updates the market on Wednesday April 10.

Tesco’s full-year results are expected to show adjusted operating profits of about £2.9billion for the year to February, according to a consensus of analysts.

That is compared with profits of £2.63billion for the previous year.

Meanwhile, group revenues, excluding VAT, are expected to rise to £68.8billion for the year, from £65.7billion.

Over the past two years, revenue growth has been supported by soaring food and drink price inflation.

‘I signed up with the course because I wanted to do something with my life, and wanted to become something,’ Adam tells me.

Aged 18, Adam says he had saved up for years to get the money to enroll on an electrical training course with Options Skills. Even then, his dad had to help him make up the difference.

(PA) – The holding company behind Thames Water has told creditors it has defaulted on some of its debts.

It comes after Kemble Water Finance Limited failed to meet a deadline to pay interest payments due on the firm’s debt.

Thames Water’s financial struggles worsened last month when it said its investors had pulled a £500million funding lifeline that was due to be paid at the end of April.

Some of that was understood to be earmarked to pay the loans owed by Kemble.

On Friday, Kemble, which is entirely funded through dividends received from Thames Water, sent a formal notice of default to the holders of around £400million of company bonds.

In the notice, it is requested that its lenders and noteholders take “no creditor action” in order to “provide a stable platform while all options are explored with all key stakeholders”.

Kemble added: “The company expects that it will be in a position to provide a further update in the coming weeks.”

Sellers are being urged to price their homes competitively after an influx of properties were put up for sale at the end of last month.

Rightmove said there was a ‘huge number’ of new sellers who came to the market just before the Easter holidays.

Among the junior markets’s smattering of small-cap video game developers, Frontier Developments plc stands out as one of the oldest, having been founded in the early 90s before listing on AIM in 2013.

Wannabe theme park bosses may know Frontier as the former developer of the RollerCoaster Tycoon series, though small-cap investors may know it better as a stock that rallied more than 30 per cent this week.

Sophie Lund-Yates, lead equity analyst, Hargreaves Lansdown, comments:

The US economy isn’t losing heat. These figures don’t show the much-needed reduction in friction between the number of candidates and vacancies, meaning wages are more likely to remain in an upwards trajectory.

Not only does this make the fight against inflation more difficult, it puts a potential pin in hopes for an interest rate cut in June.

Interestingly, the increase in jobs was partly because of an increase in leisure and hospitality, which has now returned to pre-pandemic levels.

This is another indication that the economy has plenty of excess energy that may need to be tamed by continued higher rates.

Almost a fifth of people are not aware that they could be racking up extra data roaming charges while holidaying abroad, data claims.

Regulator Ofcom said that 19 per cent of people aren’t aware of the potential charges, while 18 per cent fail to research roaming charges ahead of their visits abroad.

The average 2023 motor premium rose 25 per cent from £434 in 2022, the Association of British Insurers said, hitting a peak of £627 in the final three months of the year.

(PA) – Samsung said it expects profits for the first three months of 2024 to be more than 10 times higher than the same period last year.

The South Korea-based technology giant said it estimates operating profit for the first quarter of the year to be approximately 6.6 trillion Korean won (£3.9billion), compared with 0.6 trillion (£351million) for the same quarter last year.

The estimate comes as prices of computer chips recover from a post-pandemic slump and demand increases, driven by the rise of artificial intelligence-powered products, which require additional computing power.

Samsung is one of the world’s largest manufacturer of computer memory chips or semiconductors, alongside its huge smartphone, wider electronics and home appliances businesses.

The firm’s semiconductor business is also traditionally the biggest revenue earner for the company, and demand for chips is expected to remain strong in the year to come as the rise of AI technologies continues.

The company launched its latest flagship smartphone range, the S24 series, in January, which is likely to further boost the firm’s revenue.

Majestic Wine has bought bar chain Vagabond Wines out of administration, rescuing over 170 workers from redundancy.

Vagabond asked the High Court in early March to appoint administrators, blaming legacy Covid-19 debts, cost pressures, and the forced closure of its Heathrow site for deciding to restructure the business.

Morrisons has become Britain’s first supermarket chain to install thousands of AI-powered cameras across its stores in an attempt to help staff fill shelves faster.

The retailer has teamed up with an AI firm based in Seattle called Focal Systems, and trials reportedly found the devices boost availability and make staff more efficient.

Britain’s construction industry expanded last month for the first time since August, according to a survey on Friday that added to signs of improvement in the economy after a recession in the second half of 2023.

The S&P Global UK Construction Purchasing Managers’ Index rose to 50.2 in March from 49.7 in February – rising above the 50-point growth threshold for the first time in seven months.

The survey’s gauges of housebuilding, commercial work and civil engineering all rose, though only the last showed a return to outright growth.

Friday’s PMI chimed with other business surveys that suggest Britain’s economy returned to weak growth in early 2024 after its modest downturn in the final two quarters of last year.

Survey compiler S&P Global said the PMI signalled further growth ahead for Britain’s construction firms.

‘The near-term outlook for construction workloads appears increasingly favourable as order books improved again in March and to the greatest extent for just under one year, Tim Moore, economics director at S&P Global, said.

Easing borrowing costs also offered a boost, S&P said, as lenders anticipate about 0.75 percentage points of cuts in interest rates by the BoE later this year.

Costs faced by British construction companies increased in March at the slowest pace for three months, while employment contracted for a third straight month.

“Staff hiring was a weak spot for the construction sector in March amid lingering concerns about margin pressures and continued risk aversion among major clients,” Moore said.

The all-sector PMI, which bundles the week’s surveys for the services, manufacturing and construction sectors, inched down to 52.6 from February’s nine-month high of 52.7

Stuart Burnett joined Utility Warehouse in 2016, having started his career as a lawyer in the City before moving in-house at an insurance firm.

He worked his way up in an unusual fashion, going from a senior lawyer to working in operations and eventually becoming co-CEO in November 2021.

Oil supermajor Shell expects lower results from its liquefied natural gas trading business in the first quarter of 2024 after a bumper fourth quarter of last year.

But Shell also told shareholders on Friday that its oil trading results are predicted to be significantly higher than in the last quarter of 2023.

Gold passed $2,300 an ounce for the first time yesterday as concerns over inflation pushed it to a fresh record high.

The precious metal reached $2,304 in early trading before slipping back.

A mega-merger between Vodafone and Three is at risk of falling apart after the competition watchdog launched an in-depth investigation into the deal.

The Competition and Markets Authority (CMA) will probe the £15billion tie-up over concerns it will push up prices for customers.

Rothesay Life sees a ‘very significant’ growth opportunities due to an ‘unprecedented’ pipeline of British pension schemes looking to offload risks to insurers, it has told shareholders.

The comments came as Rothesay, owned by Singapore’s GIC and MassMutual, posted new business premiums of £12.7billion for 2023, up from £3.3billion the year before, thanks to a dozen de-risking deals with pension schemes.

Defined benefit pension schemes in Britain are increasingly looking to transfer some of their £1.3trillion in liabilities to insurance companies, driving competition among traditional insurers and attracting new players.

Last year alone, the market recorded around £50billion in bulk purchase annuity transactions, according to broker Willis Towers Watson.

Britain’s economy has already emerged from recession following a down- turn at the end of last year, figures suggested yesterday.

S&P Global said its index of activity among private sector services and manufacturing firms came in at a ‘solid’ 52.8 in March.

London-listed stocks haev slumped at the open amid heightened Middle East tensions, while investors braced for the release of key US and UK economic data.

Oil and gas stocks are the only outliers across the board, rising by 0.3 [er cent as crude prices extend gains over escalating geopolitical tensions in he Middle East and tightening supply concerns.

Later in the day, investors will parse UK business activity data for March and the US non-farm payrolls report for fresh insights into the trajectory of interest rates.

Among individual stocks, Experian is down 1.6 per cent after the credit data group agreed to acquire peer illion for up to $542.10million.

Sophie Lund-Yates, lead equity analyst, Hargreaves Lansdown:

‘The FTSE 100 has gone backwards on its last trading day of the week, as investors digest PMI data as well as a downbeat tone over in the US.

‘The major indices all shed between 1.2-1.4% on Thursday, with broad based declines suggesting the malaise is a widespread mood problem, rather than a sector specific issue. Investors are now looking ahead to today’s US job data which will highlight the strength of the labour market.

‘The narrative around the potential for interest rate cuts has been slightly contradictory this week, so there’s a lot resting on this data to help steady the ship. A looser labour market could help back the argument that the economy is returning to more stable footing.’

Majestic has completed a rescue deal to buy wine bar chain Vagabond from administration.

The UK’s largest specialist wine retailer confirmed talks over a potential move last month after Vagabond Wines went into insolvency.

On Friday, Majestic confirmed it has completed the acquisition, which will secure the future of nine Vagabond venues and 171 workers.

The bar firm’s ‘underperforming’ site in Canary Wharf and its bars at Gatwick Airport are not included in the deal.

John Colley, chief executive of Majestic, said: ‘We are delighted to have secured this partnership with Vagabond Wines and are looking forward to working with the team to share our collective passion, expertise and love of wine.

‘The completion of this deal marks the start of a long-term partnership and we are committed to investing in the Vagabond business, with the potential to open new wine bars across the UK when the right opportunities arise.’

Shell’s first-quarter trading results for its integrated gas division are expected to be significantly lower than the fourth quarter of last year, the energy giant has told shareholders.

The oil company, however, expects performance at its chemicals and products business to be significantly higher than the last three months of 2023, with losses at the unit also expected to be lower.

Shell, which reported a $28billion profit for 2023, expects to take an exploration write-off of about $600million, mainly in Albania in the first quarter.