🤝 Markets Take A Breather

Good morning, 

In today's update - an end to NHS industrial action is in sight, John Lewis swerves bonuses, Deliveroo gets back on track, and there's talk of yet another FTSE 100 heavyweight ditching London for New York.

Markets

Markets bounced back on Thursday after recent volatility, as the Swiss National Bank provided a lifeline to Credit Suisse in the form of a $54bn loan. Both UK indices closed the day higher, with the FTSE 100 and FTSE 250 closing up +0.9% and +0.7% respectively.

The recovery in Credit Suisse shares was echoed across bank stocks. In the UK, Barclays (+3.0%), HSBC (+1.8%), Lloyds (+3.2%) and Standard Chartered (+1.1%) all rose.

Top Stories

🤝 Deadlock broken in NHS pay dispute

NHS unions are set to recommend that members back the latest proposal presented by the Government on Thursday, potentially providing a path forward after months of strikes. Staff are being offered a 5% pay rise from April, along with a one-off top-up of at least £1,655. The three biggest unions – the Royal College of Nursing, Unison and the GMB – are all on board with the proposal.

 📉 Disappointing 2022 for John Lewis

The owner of Waitrose announced a downbeat set of annual results for 2022 as the business grappled with an inflation-led increase in costs, depressed consumer sentiment and smaller customer basket sizes. Revenue fell 2% to £12.5bn, with a pre-tax adjusted loss of £78m. The results are bad news for employees – CEO Sharon White disclosed the company would not be paying an annual bonus this year (for only the second time since 1953) and hinted at further job cuts. (Official)

🛵 Deliveroo reaches EBITDA profitability

After a “strong year of operational and financial” performance, Deliveroo claimed the milestone of reaching EBITDA profitability in the second half of 2022, albeit by a close margin (£6.6m / 0.2% margin). The company also returned to growth – revenue and gross transaction value for the year increased 14% and 9% respectively following gains in market share. Whilst noting the macroeconomic challenges ahead, Deliveroo expect the improvements to continue, forecasting EBITDA of between £20m-£50m for 2023. (Official)

🛫 British American Tobacco urged to jump ship from London stock listing

In what is quickly (and worryingly) becoming the flavour of the month, UK cigarette giant BAT has been urged by one of its top shareholders to move its stock market listing to the U.S. GQG Partners, currently BAT’s fifth largest shareholder at 3.1%, argues it makes “no sense” for the company to remain listed in London given a large part of the business’ operations are in the U.S. Rajiv Jain - founder of GQG - also pointed to the valuation gap between BAT and its New York-listed rivals.

What Else Happened?

Economics / Politics / General

The Financial Conduct Authority concluded that many of the UK’s payment companies lack sufficient controls and pose an “unacceptable risk” to the financial system

No more TikTok for government employees – the UK joined allies in banning the social media app from government phones over security concerns

Deals

Prax Group agreed terms for £250m acquisition of London-listed oil exploration company, Hurricane Energy (Official)

Seldom, the UK startup helping companies implement and operationalise machine learning models, has raised a $20m Series B funding round

Oxford-based medical imaging company Perspectum increased its Series C funding round from £30m to £45m, aiming to accelerate the product pipeline

London-based privacy platform Gener8 (backed by an unlikely team including Harry Redknapp and rapper Tinie Tempah), announced a £5.1m fundraise

Members only travel club, Secret Escapes, is considering raising £30m in a bet on the continued revival of post-pandemic travel

Company Updates

Listed private equity firm Bridgepoint doubled its pre-tax profit after an increase in management fees and solid investment returns. (Official)

Pest control company, Rentokil, caught a +10.5% jump in their share price after announcing higher than expected 2022 profits, as well as an increase in expected cost savings from the acquisition of rival, Terminix. (Official)

London-listed phone tower company, Helios Towers, reported a 25% rise in revenue after an increase in customers. (Official)

Real estate company Savills posted a drop in profits for 2022 due to an increase in travel, entertainment and marketing costs (Official)

Gym Group shares were pulverised as the company warned of dampening consumer demand and a £10m increase in energy costs for 2023. (Official)

🌎 Global Snapshot

Credit Suisse shares rebounded on Thursday after the Swiss central bank provided up to $54bn in liquidity to shore up the lender’s balance sheet…

...and despite that, the ECB raised interest rates by 0.5% in-line with their previous plans

US banking giants ride to the rescue of First Republic and deposit $30bn in cash as a show of support

The latest US jobless claims showed less people filing for unemployment benefits, pointing to continued tightness in the labour market

Cultivation innovations, new trafficking routes and a rebound in demand post-Covid are all contributing to cocaine production hitting record levels, according to the UN

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