Interactive Investor

FTSE 100 shares round-up: Phoenix Group, Glencore, JD Sports, 3i

There’s been a mixed reaction to results from this bunch of blue-chips, one of which offers a 10% dividend yield and another among the most popular mining stocks among investors.

1st February 2024 15:55

Graeme Evans from interactive investor

Strong updates by 10% yielding Phoenix Group Holdings (LSE:PHNX) and the 2023 star stock 3i Group Ord (LSE:III) today failed to ignite their shares in a session when dividend powerhouse Glencore (LSE:GLEN) reassured investors.

Savings and retirement business Phoenix edged a penny higher at 506.4p but remains lower so far in 2024, despite telling the City it had reached its £1.5 billion new business long-term cash generation target two years earlier than planned.

The company, whose brands include Standard Life and SunLife, reached the landmark after last year’s workplace net fund flows of £4.5 billion nearly doubled year-on-year.

About £2 billion of new scheme assets transferred in 2023, including one of the largest workplace schemes tendered in the UK market in recent years.

The company, which UBS has backed with a price target of 640p, is due to report annual results on 22 March. The previous year’s final dividend grew by 5% to 26p a share.

Mining giant Glencore rose up the ranks of the world’s biggest dividend payers after distributing £3 billion during the third quarter of last year. However, some City analysts have warned returns in 2024 may be limited to just the base dividend.

The shares were 550p a year ago but last month dipped below 400p amid near-term earnings headwinds and 2023’s lower output in seven out of its nine commodity areas.

Today’s update provided some reassurance ahead of results on 21 February, with stronger second half volumes in copper, zinc, nickel and coal. With the company also providing 2024 production guidance, the shares rose 6p to 426.5p near the top of the FTSE 100 index.

On the fallers board, JD Sports Fashion (LSE:JD.) shares suffered another setback after last month’s profit warning as investors reacted to an update last night by Adidas.

The German firm’s guidance for full-year earnings of about 500 million euros (£427 million) was substantially below the consensus expectation of around 1.3 billion euros (£1.1 billion), reflecting currency headwinds and investment in marketing and sales.

Deutsche Bank said: “Some of the FX pressure on gross margin was expected, but Adidas appears to have taken a very cautious stance overall at this stage of the year.”

The earnings guidance offset a more encouraging forecast on the outlook for high single digit sales growth, a performance weighted towards the second half of the year.

JD shares fell 1.2p to 118.5p, having been at 155.45p before the 4 January disclosure that its trading had been softer and more promotional than the company anticipated.

One of Europe’s retail success stories continues to be the discount chain Action, although the powerhouse of the 3i portfolio failed to trigger further upside for the FTSE 100 stock today.

Action grew like-for-like sales by 11.4% against strong comparatives the year before, with UBS noting this result was short of its forecast of 13%. However, it is impressed by a 12-month margin of 14.3% and underlying earnings of 1.61 billion euros (£1.4 billion).

Simon Borrows, 3i chief executive, said: “Action has again produced an all-round, impressive set of results and has started 2024 with good momentum across all of its markets.”

Action represents about 65% of 3i’s private equity portfolio, with other investments including personal care firm Royal Sanders and speciality chemicals manufacturer Tato.

The group recorded net asset value per share of 2,034p, up 8% on the previous quarter despite currency losses of £151 million or 16p from a stronger pound. Shares started today’s session at a 22% premium but fell 101p to 2378p following the update.

Bank of America maintained its “buy” recommendation, forecasting 10% Action like-for-like sales growth in the calendar year. UBS valued the shares at 2,700p before today’s update.

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