Feb 1, 2023
Darktrace Launches Buyback After Shares Hit Low: The London Rush
(Bloomberg) -- Darktrace’s share buyback announced this morning is well timed given that the company’s shares hit a record low yesterday, in the wake of a short selling report. Meanwhile, in a rare piece of candid commentary, Vodafone’s interim CEO said the company could “do better” after a weak performance in Europe — the telecoms giant was one of the busiest companies in the FTSE 100 last year, announcing a range of deals and new investors. Finally, it is time to turn your attention to Threadneedle Street for the first Bank of England rate decision of 2023 tomorrow: it could set the tone for the year ahead.
Here’s the key business news from London this morning:
In The City
Darktrace Plc: The cybersecurity company announced a £75 million share buyback, saying it is the best use of its extra cash in “current market conditions.”
- The company yesterday responded to a report by short seller Quintessential Capital Management, saying it had “full confidence” in its accounting practices and the integrity of its financial statements
Vodafone Group Plc: The telecommunications company met analyst expectations in the third quarter, but CEO Margherita Della Valle said the company “can do better,” in the wake of falling revenue in Europe.
- The company’s sales in Europe declined in Germany, Italy and Spain, although there was growth in the UK and elsewhere in the continent
GSK Plc: The pharmaceutical giant’s fourth quarter results beat analyst expectations after its shingles vaccine posted more revenue than expected.
- The company said it expected growth in adjusted operating profit of up to 12% next year, despite an anticipated fall in sales in its general medicines unit
Entain Plc: The gambling company expects to have made nearly £1 billion of Ebitda for 2022, ahead of expectations, after its group net gaming revenue grew 12% in the year.
Chancellor Jeremy Hunt was told to cut taxes at a meeting with rank-and-file Tory MPs, after the International Monetary Fund offered a bleak forecast of the UK’s economic outlook.
The Bank of England should “live up to market expectations” and raise its official interest rate by 50 basis points to 4% tomorrow, says Bloomberg Opinion’s Marcus Ashworth, adding the central bank should then pause to assess the economic impact of the higher borrowing costs.
That’s as prices in UK stores rose at their highest rate since at least 2005 in January, with retailers offering fewer discounts than during the festive period.
Meanwhile, swathes of office staff will be forced to work from home today as widespread industrial action closes schools and cripples Britain’s rail network. Looking at the upcoming school holidays, holidaymakers returning to the UK by ferry could face disruption after Border Force officers announced plans to strike at several British and French ports.
In Case You Missed It
Stonegate Pub Co. spent about £1.3 billion buying rival Ei Group just before the pandemic, becoming Britain’s biggest pub group. Three years on — and with a £2.6 billion debt pile — the owner of the Slug and Lettuce chain is ready to scale back. Stonegate, owned by private equity firm TDR Capital, plans to sell 1,000 of its pubs, people familiar with the matter told Bloomberg.
To see how Brexit has transformed banking, just look at the surge in top earners at JPMorgan Chase & Co.’s European business.
Haleon Plc, the consumer health business spun out from GSK, is in the early stages of studying large potential deals to bulk up its brand portfolio, people with knowledge of the matter told Bloomberg.
Energy giant Shell Plc, miner Anglo American Plc and telecoms firm BT Group Plc are among the companies scheduled to update the market tomorrow.
BT was among the worst performers on the Stoxx 600 telecommunications index last year, but has recovered so far this year, climbing more than 1%. The company’s Openreach infrastructure unit will be in focus after revealing a decline in broadband connections in November, Bloomberg Intelligence analyst Matthew Bloxham says. Meanwhile, Morgan Stanley and HSBC say falling energy prices could boost the sector’s earnings this year and next, depending on hedging strategies.
Estimates compiled by Bloomberg indicate third-quarter adjusted Ebitda probably grew by less than 2% compared to the previous quarter. In the consumer unit, analysts expect earnings to fall, although Bloxham says a 14.4% price increase for most broadband and mobile subscribers indicates the company is happy with retention and doesn’t fear rivals trying to snatch market share by undercutting.
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