It seems like inflationary pressures may take longer to dissipate, judging from the latest consumer price figures this morning. But some companies may be getting used to navigating the maelstrom, with insurance firm Aviva’s focus on “pricing appropriately” helping it deliver profit growth in the first half. Aviva now hopes to exceed financial goals for the mid-term, while bringing forward cost reduction targets.
Here’s the key business news from London this morning:
In The City
Aviva Plc : The insurer and asset manager expects its full-year operating profit to grow between 5% to 7% from the £1.35 billion reported in 2022.
- The company also said it’s on track to exceed Solvency II operating own funds generation target of £1.5 billion per year by 2024 and to deliver £750 million gross cost reduction one year early
Glanbia Plc: The Irish nutrition group upgraded its full-year guidance after reporting results ahead of its own expectations in the first half of 2023.
- It now expects to deliver an adjusted earnings per share growth of 12% to 15% on a constant currency basis given the continued momentum in Glanbia Performance Nutrition
- The company also appointed Hugh McGuire to replace Siobhán Talbot as CEO from January 2024, according to a separate statement
Balfour Beatty Plc: The engineering and construction group said it’s on track to meet full-year expectations even as the current high interest rate environment caused some delays in projects going to contract, largely in the US commercial office sector.
UK Inflation: The Consumer Prices Index rose 6.8% in July, the Office for National Statistics said. That’s slower than the 7.9% increase the month before, but exceeds the 6.7% rate economists had expected. It’s the fifth time in six months the figures have surprised on the upside, adding to the case for the Bank of England to raise interest rates again.
In Westminster
Rishi Sunak has spent months saying he wants the UK to lead the world in developing and regulating artificial intelligence, a strategy that’s finally taking shape. The prime minister plans a summit later this year that aims, for the first time, to bring together world leaders and top AI executives in an event that’s supported by Joe Biden.
The US president and other G7 leaders, along with tech chiefs including OpenAI chief Sam Altman and Microsoft CEO Satya Nadella are expected to be invited, said people familiar with the plans.
In Case You Missed It
Intel Corp. is expected to call off its planned $5.4 billion acquisition of Tower Semiconductor Ltd. as time to win China’s regulatory approval runs out, according to people familiar with the matter. A representative for Intel declined to comment on the approaching deadline, while Tower didn’t immediately respond to a request for comment.
Meanwhile, Abcam Plc founder Jonathan Milner is threatening to resume a boardroom battle at the biotechnology supplier he started 25 years ago. Milner, who owns about 6.1% of Abcam, has been agitating for change at the firm, asking to be named executive chairman alongside the removal of three directors. He paused his campaign in June after the Cambridge-based company said it would explore all options, including a potential sale.
Looking Ahead
Rank Group Plc and Tremor International Ltd. are among the few companies slated to update investors tomorrow as the current earnings season draws to a close.
Looking ahead to Friday, UK retail sales data may show a decline in July, when wet weather damped demand for summer clothing and outdoor activities. Consumer spending will likely remain under pressure, given the full impact of higher interest rates is yet to feed through the economy, according to Bloomberg Intelligence.
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