FTSE 100 Live: Stocks flat; GSK up on Zantac deal, Travis sinks

FTSE edges lower, GSK up, Travis Perkins (LON:TPK) down: The FTSE 100 paused for breath after Tuesday’s strong gains but there was good news for investors in GSK PLC (LON:GSK).

At 8:15am, London’s blue-chip index was down 7.40 points, 0.1%, at 7,620.81 while the FTSE 250 fell 67.10 points, 0.4%, at 17,900.57.

Susannah Streeter, head of money and markets, Hargreaves Lansdown (LON:HRGV) said: “The surge of optimism, fuelled by hopes the Fed will go easier with its interest rate policies and buoyed by expectations of fresh stimulus in China, appears to have plateaued.”

“A little more caution is returning, as investors look ahead to tomorrow’s snapshot of inflation in the United States.”

GSK rose 2.2% after it said it had struck a deal to stop a high profile case concerning its heartburn medication Zantac heading to court in California.

The FTSE 100-listed pharma giant said it had reached a confidential settlement in the Cantlay/Harper case over allegations Zantac caused cancer.

The case, which was set to begin trial on November 13, will be dismissed.

Shore Capital’s Sean Conroy noted the decision is in a similar vein to the settlement it made in June,

He believes this news should help “some of the noise around Zantac further abate ahead of the Q3 results where we expect to see first lot of Arexvy sales booked, something which should help refocus people on the improving growth outlook for the company.”

But there was bad news for shareholders in Travis Perkins PLC which warned full-year profits will be well below previous guidance as a slowdown in new building hit its revenues.

In a trading update, the Northampton-based firm said operating profits for the year would be between £175 million and £195 million, down from £240 million projected in August.

Shares tumbled 11%.

PageGroup PLC (LON:PAGE) was another share on the wane, down 6.1%, after it also warned profits would be below prior expectations.

Liberum noted management refers to a heightened degree of uncertainty in the short term due to a slower end to the quarter.

The broker said management now expects 2023 Ebit of £125 million to £130 million below Liberum’s forecast of £137 million.

But better news from FirstGroup (LON:FGP) which rose 4.8% after its trading update while Marston’s was just in the green after reported strong sales growth and an improved outlook.

Travis Perkins slashes profit guidance
Not good news for shareholders in UK building merchant Travis Perkins which has warned full-year profits will be well below previous guidance as a slowdown in new building hit its revenues.

In a trading update, the Northampton-based firm said operating profits for the year would be between £175 million and £195 million, down from £240 million projected in August.

Nick Roberts, chief executive, said: “Market conditions remain challenging with continued weakness across new build housing and domestic RMI. Deflation on commodity products has also been greater than we had anticipated.“

The firm said whilst third quarter trading started as expected in the Merchanting segment, September saw a notable deterioration in market activity and sentiment.

Third quarter revenue revenue was down 3.4% year-on-year, a modest improvement on the first half, however the drivers of revenue have shifted markedly, Travis said.

Pricing declined by 3.1%, resulting primarily from strong deflationary pressures on commodity products which have significantly impacted on gross profit and margins, including the impact of selling through existing stocks at lower market prices.

BP to stick to plans to cut oil and gas output – report
BP PLC (LON:BP) has confirmed its ongoing commitment to reducing oil and gas output, despite recent upheavals in its executive leadership, according to a report in the Financial Times.

The assurance was given at a two-day investor event in Denver by the company’s interim chief executive, Murray Auchincloss. He stated that BP’s long-term objectives, including its net-zero ambitions, remain unaltered, the paper said.

The investor gathering was initially planned to highlight BP’s significant investments in the United States, exceeding £100 billion since 2005.

Marston’s cheers better cost outlook, sales growth
A decent looking update from pub chain Marston’s PLC (LON:MARS) which reported healthy growth in sales and an improved cost outlook as it updated investors on trading.

The pub chain said in 52 weeks to September 30 total retail sales in the group’s managed and franchised pubs rose 11.3% on last year with like-for-like growth of 10.1%.

Both drink sales and food sales have been strong, demonstrating the resilience and appeal of our predominantly suburban pub estate.

Sales did soften towards the end of the year, reflecting the wet weather in July and August, with like-for-like sales in the 10 weeks to September 30 up 7.7%, compared to the year prior.

Drink sales in this period were behind food sales, principally due to the weather.

Marston’s said it has reduced head office headcount costs by approximately £5 million, the majority of which will benefit 2024 and subsequent years.

This cost reduction is expected to translate into higher pub operating profitability than was previously anticipated, the firm said.

Andrew Andrea, chief executive said: “An improving outlook in which cost headwinds are abating, together with the actions we have taken this year to drive further efficiencies, leaves us confident that Marston’s remains well-placed to continue to outperform in the current macroeconomic environment, grow revenue and profitability, as well as deliver improved margin in the year ahead.”

Marston’s is also targeting a debt reduction of £60-70 million in the 2024 financial year plus the sale of around £50 million of additional non-core properties.