LIVE BUSINESS: THG to sell luxury portfolio to Frasers; Prudential prepares £2bn buyback; SIG Earnings Warning

Richard Hunter, head of markets at Interactive Investor:

‘In the UK, the main index limped to a weak open in the absence of any obvious immediate catalyst, with most mining stocks under pressure reflecting a risk-off sentiment among investors.

‘A bright spot came from Prudential, which announced a new $2 billion share buyback program to be completed in 2026.

‘The company has revised its required free surplus ratios, which in turn could unlock the potential for higher returns for shareholders, and the shares rose around 5% on the news.

‘The rise in the share price provides some relief to what has been a torrid time for the insurer, where doubts over China’s economic performance in particular have weighed heavily on the shares, forcing the shares down more than a 35% during the last year.

‘The final reading of UK GDP will be published later this week, while the corporate calendar remains light ahead of the impending onslaught of half-year results due in July.

“The FTSE100 has added 6.5% in what has been a relatively strong performance so far this year, and some warming of sentiment towards the UK in general also contributed to a 3.5% gain for the FTSE250 , which has also experienced an increasing number of its constituents being targeted by opportunistic bidding approaches.’

Britain’s SIG Plc expects underlying profit for the year to be below market forecasts as a result of weak demand in the construction sector.

The building materials supplier, which sells roofing and insulation materials in Britain and some European countries, now expects underlying operating profit to be in the range of £20 million to £30 million, well below expectations. analysts of £41.1 million.

Britons have been grappling with high household bills amid inflationary pressures, causing consumers to cut back on discretionary spending such as home improvements.

SIG also forecasts a 7 per cent decline in like-for-like sales in the first half of the year, with underlying operating profit in the range of £10m to £12m.

The Euro and Olympic Games are forecast to provide a £233m boost to the UK economy.

Experts at credit rating firm Experian predict an increase in spending among fans going out to pubs and among those stocking up on drinks and food for gatherings at home.

Some are also expected to buy new televisions to keep up with the action.

Insurance group Prudential plans a $2 billion share buyback program to be completed no later than mid-2026.

The life and health insurer will begin the first $700 million tranche of the buyback, for which it has reached an agreement with Goldman Sachs International, it said in a separate statement.

The buyback marks progress toward the London- and Hong Kong-listed company’s 2027 financial goals and will increase the potential for further cash returns for shareholders, the company said.

Chief Executive Anil Wadhwani said Pru’s board continues to expect its annual dividend for 2024 to increase by 7 to 9 percent compared to the previous year.

He added: “We are confident in new business growth in fiscal 2024 and in achieving our financial and strategic objectives for 2027.”

THG has agreed to sell its portfolio of luxury goods websites to Frasers Group for an undisclosed sum, with Mike Ashley’s retail giant adding brands such as Coggles and annual revenues of £43m.

Michael Murray, CEO of Frasers Group, said:

‘Today we are pleased to announce a new strategic partnership with THG, including the launch of our loyalty and consumer credit proposition, Frasers Plus, across the THG Ingenuity platform.

‘This is an exciting step towards our Frasers Plus ambitions as we look to expand its offering through additional third-party platforms.

“We look forward to working with the THG team and unlocking more benefits for both companies.”