🍽️ Food is still expensive

Markets

• Mixed day for markets on Tuesday, as the FTSE 100 suffered from a retreat in oil and other commodity prices, whilst falls in large cap names such as Unilever (-3%) and Rolls Royce (-3.1%) (below) added to pressure

  • The FTSE 250 finished broadly flat on the day

• Ocado (-4.8%) was a notable faller as investors prepared for it to be dinged from the FTSE 100 following the index’s quarterly re-shuffling

• Boot maker Dr Martens also took a leg lower on Tuesday, falling 4.5% as RBC downgraded its stock ahead of earnings on Thursday

Corporate News

Shares in Rolls Royce (-3.4%) and BAE Systems (-0.8%) fell on Tuesday after India filed a criminal complaint against the pair, relating to the sale of fighter jets between 2003 to 2012; the Central Bureau of Investigation accused the companies of using middlemen to negotiate deals, despite restrictions on the use of intermediaries. (Link)

Consumer goods giant Unilever saw shares drop 2.7% today after announcing the departure of long-time CFO Graeme Pitkethly; the departure now gives incoming CEO Hein Schumacher the chance to form his own leadership team. (Link)

Investors cheered Hollywood Bowl as the company posted record half-year results heading into the summer; revenue climbed 21% to £110m with pre-tax profits of £27m, driven by growth in its Canadian operations - CEO Stephen Burns said they would look to expand in the region. (Link)

Deals

Shares in FTSE 250 mining materials firm RHI Magnesita jumped 24% after US private equity firm Rhone Group offered to buy 20% of the business for £28.50 per share, a 40% premium to the latest share price. (Link)

FTSE 100 outsourcing firm Bunzl announced the acquisition of two safety businesses in Brazil and Spain - no valuations were disclosed but the two businesses combined are expected to contribute around £50m of revenue; in the announcement, Bunzl noted this was the company’s 200th acquisition. (Link, Bunzl)

The UK’s Competition and Markets Authority has cleared Asda’s £611m purchase of Co-op’s 132 petrol stations, deciding not to refer it to a lengthy Phase 2 investigation. (Link)

In today’s VC update:

• eXmoor Pharma - a Bristol-based end-to-end cell and gene therapy manufacturing partner, raised a $35m Series A round. (Link)

• Neat Burger - the London-based vegan fast food restaurant backed by F1 driver Lewis Hamilton - raised an $18m Series A funding round at a $100m valuation; Real Madrid keeper Thibault Courtois was among those entering the cap table for the first time. (Link, FT)

• Qflow - a digital platform designed for the construction industry to cut down on waste - raised £7.2m in funding led by Systemiq. (Link)

• Cur8 - a UK-based climate tech looking to bring down the price of carbon removal - raised a £5.3m pre-seed round led by Google Ventures (Link)

Economy / General

Despite slowing marginally from April’s record breaking growth, UK food inflation remained historically high in May, rising 15.4% for the year to May (down from 15.7% in April); the British Retail Consortium said there was reason to believe food inflation was “peaking”, as lower energy and commodity costs filtered into prices. (Link)

Around 800 residential mortgages have been pulled in the UK over the last couple of days amid expectations of further interest rate rises; rates on fixed mortgages have also begun to creep up again, having pulled back following October’s mini-budget debacle. (Link)

Online estate agent Zoopla said UK house sales reached their highest point this year in May, as confidence returned amongst sellers; the number of sales agreed over the last four weeks was 11% above the historic average, however Zoopla reiterated that sellers needed to be realistic on pricing. (Link, Zoopla)

Goldman Sachs research analysts think UK inflation will surpass the Bank of England’s upper limit until 2026, caused in part by spiralling wage growth. (Link)

🌎 Global Snapshot

US consumer confidence fell to a six-month low in May, as Americans’ views on the labour market worsened and the outlook for business conditions slipped; on the upside, there was an increase in households planning to make large purchases in the next six months, including cars, homes and appliances. (Link)

Chipmaker Nvidia joined the likes of Meta, Amazon and Alphabet in becoming the latest trillion dollar company on Tuesday, following an AI-driven rally in shares after the company’s forecast-smashing quarterly results last week. (Link)

Goldman Sachs is reportedly preparing a third wave of headcount cuts this year following a continued drought in dealmaking; the layoffs are expected to affect up to 250 people, according to WSJ. (WSJ, Link)

Spanish inflation dropped to its lowest level in two years, raising hopes that the rest of Europe will follow; headline inflation fell to 2.9% in May (down from 4.1% in April), driven by a cooling in fuel and food prices. (Link, FT)

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