The recent easing of mortgage rates has brought some relief for consumers and companies alike, as Britain’s top homebuilder Persimmon can attest. That said, there’s still a lot of uncertainty in the market with fresh data from Nationwide Building Society showing UK house prices fell at their sharpest annual pace since 2012. Businesses’ mood is more optimistic when it comes to Northern Ireland, where US firms are poised to invest billions of dollars.
(Bloomberg) — The recent easing of mortgage rates has brought some relief for consumers and companies alike, as Britain’s top homebuilder Persimmon can attest. That said, there’s still a lot of uncertainty in the market with fresh data from Nationwide Building Society showing UK house prices fell at their sharpest annual pace since 2012. Businesses’ mood is more optimistic when it comes to Northern Ireland, where US firms are poised to invest billions of dollars.
Here’s the key business news from London this morning:
In The City
Persimmon Plc: Britain’s biggest homebuilder said its weekly private net sales improved to 0.52 in the first eight weeks of the year, compared with 0.3 in the final quarter of 2022. Still, that’s significantly below the same period a year earlier, when Persimmon’s sales rate was at 0.92.
- “There have been some encouraging signs in the mortgage market recently, with rates reducing compared to late last year,” Chief Executive Officer Dean Finch said. “However, affordability and mortgage product availability still remain the key issues, with particular challenges in the south of England”
Reckitt Benckiser Group Plc: The company forecast profitability may show slight improvement this year even as the Strepsils maker passes on sharply higher costs to consumers.
- The adjusted operating margin widened to 23.8% last year, just ahead of analysts’ estimates. Profitability should be in line with or slightly above 2022 levels this year when excluding a boost from its US infant nutrition business, Reckitt said
Aston Martin Lagonda Global Holdings Plc: The luxury carmaker expects to improve profitability and raise deliveries in 2023 after lingering supply-chain issues held back vehicle shipments last year.
- Aston Martin said it will deliver 7,000 cars this year after shipping 6,412 vehicles in 2022, roughly in line with its already lowered forecast
Alphabet Inc.: The company’s YouTube business is facing a complaint to the UK’s data protection body over allegations it is unlawfully gathering data on children in breach of new rules implemented to protect them online.
Glencore Plc: The company was ordered by a federal judge in New York to pay $700 million as a criminal punishment for a global bribery scheme orchestrated by the Swiss-based commodities trading and mining giant.
In Westminster
US businesses are poised to invest billions of dollars into Northern Ireland if the “Windsor” deal on post-Brexit trading arrangements leads to political stability in the region.
Energy Security Secretary Grant Shapps called on suppliers to be ready to pass on the savings they’ll be seeing in the markets as competition between natural gas and power providers returns.
Meanwhile, prices in UK stores rose at their highest rate since at least 2005 in February, as the cost-of-living crisis showed little sign of easing for cash-strapped consumers.
In Case You Missed It
UK house prices fell at their sharpest annual pace since 2012 last month, steepening a downturn sparked by a jump in mortgage rates.
Britain’s biggest business group has swung its weight behind the flexible working revolution, warning executives that they should drop their opposition or risk losing the “war for talent.”
“Jim Ratcliffe built an empire on debt,” writes Bloomberg Opinion’s Chris Hughes. His financial acumen should make him a “decent steward” of Manchester United, Hughes says.
Looking Ahead
Results from online gambling firm Flutter Entertainment Plc and consumer health company Haleon Plc will be in focus tomorrow.
Haleon is due to report its first full-year earnings since its spinoff from GSK Plc. The Advil maker’s organic revenue growth is expected to surpass the 8% to 8.5% guidance range disclosed in November, according to estimates compiled by Bloomberg. Haleon is also likely to deliver its forecast of an adjusted operating margin “slightly” above the 22.8% level seen in 2021, but analysts will be mostly interested in its expectations for 2023 and potential M&A deals in the making.
The company appears more inclined to pursue bolt-on acquisitions rather than large cash deals until late 2024, by which time it aims to have cut leverage below 3x, Bloomberg Intelligence’s Diana Gomes says. “That’s wise amid higher interest rates in 2023 and a volatile pound, as 80% of Haleon’s debt is fixed and half is in dollars.” Also in focus: Haleon is exploring a divestiture of its ChapStick lip balm brand, Bloomberg reported.
Flutter, meanwhile, is expected to have gained customers and sales from the FIFA World Cup. The company, which hired InterContinental Hotels Group Plc’s CFO Paul Edgecliffe-Johnson to be its finance chief from March 20, last month said it plans to consult with shareholders about a secondary US listing. Its North American unit has the most compelling growth prospects, according to BI’s Conroy Gaynor. He expects the company’s UK outlook to depend on the looming Gambling Act white paper.
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