Melrose Industries powered higher during a robust start to the week for the FTSE 100 index.
The shares of the GKN Aerospace business rallied on relief that 2025 targets are intact despite supply chain headwinds.
UK inflation figures and results from semiconductor giant Nvidia await investors later in the week.
FTSE 100 Live Monday
- Melrose on track for 2025 target
- Begbies sees elevated period of Insolvencies
- Elementis boss to step down
Market update: Melrose leads FTSE 100, pressure on AstraZeneca continues
10:21 , Graeme EvansAn 8% surge left Melrose Industries on top of the FTSE 100 index today after it reassured over the impact of the aerospace industry’s supply chain crisis.
The GKN Aerospace business is on course for a profit of around £560 million this year, as well as 2025’s ambition to grow this figure to £700 million.
It has been boosted by revenues growth of 7% for the four months to 31 October, driven by strong aftermarket activity in its Engines division.
The Structures wing, which provides airframe technology and electrical systems, grew at a slower pace due to the supply chain issues and customer destocking.
Boss Peter Dilnot said the company’s unique position on the world's leading aircraft and engines left it “well placed to create substantial value in the future".
He added: “As we move into 2025, we enter a period of significant and sustained growth in our cash flow for many years ahead.”
The shares of Melrose, which fell as far as 417p following downgraded guidance earlier this year, today jumped 40.3p to 529.8p as the best performing stock in the FTSE 100 index.
London’s top flight made a solid start to the week, with mining stocks including Rio Tinto and Anglo American underpinning a rise of 10.17 points to 8073.78.
It was another tough session for market heavyweight AstraZeneca, which lost 79.3p to 9898.7p amid recent worries over an investigation in China.
The shares have fallen 17% in the past month, while GSK is down by about 11%. Astra’s rival added 13p to 1314p, even though analysts at Deutsche Bank today cut their price target on GSK from 1700p to 1350p.
B&M European Value Retail topped the FTSE 100 fallers board as pressure on the retailer continued despite last week’s robust half-year results.
The shares dropped 4% or 16.9p to 361.5p, leaving the valuation down by about 35% this year.
The FTSE 250 index fell 2.43 points to 20,474.21, with Wood Group up 3p to 53p amid interest in the engineering consultancy following this month’s heavy fall.
Demand for Burberry on the back of last week’s turnaround plan continued as shares rose 3% or 24.6p to 930.8p, taking the gains since last week to 30%.
Elementis rose 1.6p to 136.6p after the supplier of performance-based additives said that chief executive Paul Waterman is to stand down after nine years in the role. He has come under pressure from an activist investor to step aside.
Melrose shares jump on latest guidance, Burberry run continues
08:30 , Graeme EvansThe shares of Melrose Industries are up 8% in the FTSE 100 index after the GKN Aerospace business reiterated its £700 million profit target for 2025.
The rally of 37.95p to 527.45p compares with October’s low of 417p, having fallen on concerns over industry-wide supply chain challenges.
Melrose’s strong performance came in a robust start to the week for the FTSE 100 index, which stood 21.54 points higher at 8085.15.
Mining stocks boosted the performance after gains of just over 1% for Anglo American, Rio Tinto and Glencore.
GSK also steadied after last week’s heavy selling to stand 14p higher at 1315p.
AstraZeneca moved the other way with a decline of 113p to 9865p, while housebuilders Persimmon and Taylor Wimpey lost about 0.6%.
The FTSE 250 rose 0.2% or 33.71 points to 20,510.35, with Elementis up 3% or 4.2p to 139.2p after announcing that CEO Paul Waterman is to stand down.
The strong run for Burberry on the back of last week’s turnaround plan saw a further rise of 3% or 26.3p to 932.5p. The shares were 717p last week.
Week ahead: Inflation rate set to rise, Nvidia results due
08:00 , Graeme EvansThe week ahead includes Wednesday’s UK inflation print, which economists expect will show an increase in October’s annual rate to 2.2% from 1.7%.
Public sector borrowing and retail sales are also due later in the week.
On the corporate front, Imperial Brands reports tomorrow before Severn Trent and British Land on Wednesday and Royal Mail owner IDS on Thursday.
The biggest global event is after Wall Street’s closing bell on Wednesday, with the $3.5 trillion-valued semiconductor giant Nvidia due to report quarterly figures.
Under-pressure Elementis CEO to step down
07:52 , Graeme EvansElementis boss Paul Waterman is to leave the FTSE 250-listed business, having recently come under pressure from an activist investor to step aside.
The supplier of performance-based additives for use in cosmetics and skin and sun care products said Waterman agreed with the board “that it is the right time” to transition the leadership of Elementis to a new chief executive.
He will remain with the company until a successor is appointed, and will step down no later than the AGM in April.
Gatemore Capital has called for a change of leadership amid frustration over the company’s share price performance.
Waterman said: “Over the past nine years it has been my privilege to lead Elementis as we have transformed the group into a higher quality, more focused specialty chemicals business.
“The company is now well positioned for future success as a result of our focused strategy implementation and the commitment of a very talented Elementis team.”
Begbies Traynor sees longer period of “elevated” insolvency levels
07:33 , Graeme EvansBusiness recovery and advisory group Begbies Traynor today forecast an extended period of elevated insolvency levels as UK firms struggle in the face of additional headwinds.
The group said its own revenues and adjusted profit increased by about 16% in the six months to 31 October, reflecting organic growth as well as acquisitions.
Executive chair RIc Traynor said: “Additional headwinds for UK business from increased employment costs and the prospect of higher for longer interest rates are likely to extend the period of elevated insolvency levels, increasing the need for advice and support from our insolvency and business recovery professionals.”
The group also estimates its own employment costs will increase by about £1.25 million a year due to national insurance changes in the Budget. It is reviewing options to mitigate the impact where possible.
Melrose on track despite supply chain challenges, backs 2025 target
07:14 , Graeme EvansGKN Aerospace business Melrose Industries said it remains on track to meet full year expectations, despite the industry-wide supply chain challenges.
Revenues for the four months to 31 October rose 7% on the same period in 2023, with Engines up 17% on the back of a strong aftermarket performance.
The Structures division grew 1%, impacted by the supply chain challenges and previously announced customer destocking.
Melrose said: “We continue to partner closely with our major customers to execute efficiently on production schedules, whilst our internal business improvement actions progress as planned.
“As a result, adjusted operating profit continues to grow on the prior year, in line with our expectations.”
The FTSE 100-listed group continues to target a profit figure in the range of £550 million and £570 million, rising to its £700 million target in 2025.
FTSE 100 set for solid start, Bitcoin above $90,000
07:01 , Graeme EvansLondon’s FTSE 100 index is set to open 17 points higher at 8081, despite the weak handover from Wall Street’s poor performance on Friday.
The S&P 500 index lost 1.3% to end the week 2.1% lower, while the Nasdaq Composite retreated 2.2% for an overall loss of 3.1%.
The US selling pressure followed comments from Federal Reserve chair Jerome Powell backing a gradual approach to interest rate cuts.
Brent Crude starts the week at $71.33 a barrel, gold at $2586 an ounce and Bitclin at $91,344. The pound is $1.264.
