It’s not just the FTSE 100 that’s raced ahead this past year; the All-Share index is near a record high too. City writer Graeme Evans rounds up today’s interesting share price moves.
The optimism shown by Monday’s multi-year high for the FTSE All-Share remained today as figures from the jobs market and corporate Britain pointed to more resilience.
The All-Share, which dates back to 1962 and encompasses about 98% of UK stock market capitalisation, closed at 4,302 for its highest level since May 2018 amid recent encouragement over falling wholesale energy prices and a run of robust trading updates.
Its performance as one of the best indices over the last year has largely gone unnoticed during the current focus on a potential record high for the FTSE 100 index.
The All-Share and FTSE 100 index both slipped a little today, but this was more to do with the lack of momentum from Wall Street after a public holiday for US traders yesterday.
The recent rally for London shares comes amid hopes that companies are in a position to rebuild margins following their battering from commodity and labour costs in 2022.
This was reflected by McBride (LSE:MCB), a leading European manufacturer of cleaning products, after it reported a return to underlying profit in the final two months of last year.
The own-brand supermarket supplier said revenues across the first six months of its financial year were 31% higher than a year earlier as it managed to pass-through input cost inflation and also achieved volume growth.
McBride reported early signs of stabilisation in certain input costs towards the end of the period, but added that some raw materials continued to increase.
It said that energy and employment costs also applied ongoing pressure, meaning that it will need further price increases, product engineering and cost actions.
McBride’s reference to labour costs was echoed in today’s jobs market report after it emerged that average earnings in the UK grew by a bigger-than-expected annual rate of 6.4% in the three months to November.
The UK’s unemployment rate held firm at 3.7%, pointing to the ongoing resilience of the UK economy but adding to fears that the Bank of England may have to hike interest rates by another 0.5% in February to combat inflation’s lingering strength.
Capital Economics said: “November’s labour market data showed that conditions remained tight and wage growth stayed strong.
“This will add further weight to the case for the Bank of England to raise interest rates from 3.5%, perhaps to 4.5% in the coming months.”
Further hikes in borrowing costs will endanger the recent signs of progress after the UK economy avoided recession in November and retailers posted resilient festive updates.
In its end of year update, Hut Group business THG (LSE:THG) said key customer indicators such as average order values, repeat rates and active numbers all grew compared with 2020.
It said this highlighted the resilience of beauty, health, and wellness categories, as well as continued adoption of digital channels post pandemic and particularly in the UK.
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The company reported 4.1% growth in annual sales to £2.25 billion and said £100 million of annual efficiency savings meant it entered 2023 with strong momentum to achieve substantial margin expansion.
Founder and chief executive Matt Moulding added: “Core commodity prices used within our nutrition division have seen significant deflation since their record highs in 2022, giving us confidence in significant profit progression as we move through the year ahead.”
His optimism failed to prevent shares giving up their recent gains, however, as the former high flying tech stock declined 11.6p to 56.8p. The reversal came as analysts at Jefferies said fourth-quarter sales missed their expectations, adding to uncertainty about the speed of the margin rebuild.
Elsewhere today, there was encouragement from FTSE 250-listed self-storage business Safestore (LSE:SAFE) after it said trading in the new financial year showed broadly stable levels of demand with rates paid by new customers continuing to grow.
The update came as it reported an “excellent performance” in 2022, which built on a record 2021 following underlying growth in earnings of 14.5% to £135.1 million. It noted strong revenues growth in the UK market, good performances in its Parisian and Spanish businesses as well as the first seven months' contribution from its new Benelux business.
Shares added a penny to 1,001p as Safestore continued the seasonal trends behind its inclusion in both the aggressive and consistent versions of ii’s Wild’s Winter Portfolios.
Broker Peel Hunt said: “The step change in self-storage demand during the pandemic sees no signs of abating, with continued good demand and double-digit rate growth in 2022.”
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