BUSINESS LIVE: National Grid to raise £7bn; Hargreaves Lansdown rejects takeover bid; Nationwide hands members £385m

Just before close, the FTSE 100 was 0.28% down at 8,346.57.

Meanwhile, the FTSE 250 was 0.18% lower at 20,673.50.

Soaring demand for Sarah J. Maas’s fantasy novels has enabled Bloomsbury Publishing to post another record year of revenues and profits.

House of Flame and Shadow, the latest title in Maas’s Crescent City series and her 16th book with Bloomsbury, became a number one New York Times Bestseller after its release in February.

AJ Bell shares rose over 10 per cent on Thursday after the investment platform upped its dividend amid higher half-year profit and revenue.

In a boost for AJ Bell shareholders, the group announced an interim dividend of 4.25p per share, up 21 per cent on the same period a year earlier.

London-listed utilities shares sank today as investors digested the looming general election.

Creaking national infrastructure, recent peaks in consumer bills and public outrage at water firms’ pollution and spillage failures are all likely to be under the microscope ahead of the 4 July vote, with Keir Starmer’s Labour party expected to propose a major shake-up in some areas.

Kia – the brand that’s captured the electric vehicle market with its best-selling and award-winning EV6 – has revealed its new EV3 model targeting the lower-priced end of the market.

The smaller and cheaper EV3 will hit the compact SUV market as a spacious five-seater with ‘best-in-class battery range’.

Mark Hicks, head of Active Savings, Hargreaves Lansdown, asks how savings will be impacted by the announcement of a general election:

The savings market moved quickly in response to the election announcement. The Bank of England is going to want to skip changing the base rate around the time of an election, to avoid the risk it becomes politicised.

As a result, the savings market has now fully priced in a delay to September. Before the announcement, August was still a reasonable possibility, and June was an outside chance. All that has changed.

Savers could stand to benefit, because it could mean a pause in rate cuts, so easy access savers would continue to earn rates at or above 5% for a while longer. If you have cash you can tie up for a period, it also opens the window of opportunity, because fixed rates around 5% could hang around for longer too.

However, it’s still worth acting sooner rather than later. The last week or so has shown how quickly expectations can change, so it’s worth taking advantage while you can.

(PA) – Insurance giant Aviva has seen UK general insurance premiums surge by nearly a fifth at the start of 2024 as it hiked the cost of cover.

The group reported a 19% jump in UK general insurance premiums to £1.7billion for the three months to March 31, with personal lines up 27%.

Aviva said this reflected “continued strong rate discipline in the high inflationary environment” as well as new business growth.

Overall, group wide general insurance premiums lifted 16% to £2.7billion.

The insurance sector has been increasing the cost of cover in response to the soaring cost of repairs and labour.

Recent figures from the Association of British Insurers (ABI) showed that the average home insurance policy cost 19% more – up £60 – year-on-year in the first quarter of 2024, while comprehensive motor cover was about a third, or £157, higher.

Exhausted UK workers are doing the equivalent of 19 million extra days of unpaid overtime each month, new research has found.

Research of 2,000 employees found 87 percent work an average of five and a half hours more every month than their contracted agreement which they aren’t paid for.

(PA) – The owner of Royal Mail has failed to publish its annual trading update, scheduled for early Thursday morning, as the group heads towards a potential overseas takeover.

London-listed International Distribution Services told markets it would publish its full-year financial results at 7am on Thursday, but by 11.30am nothing had been released.

It comes a week after the company said it was “minded” to agree to a takeover by Czech billionaire Daniel Kretinsky.

Mr Kretinsky, whose EP Group owns a 27.5% stake in the firm, put forward a proposed bid worth about £3.5billion on May 15.

There have been no further announcements on the deal in the last week, but Business Secretary Kemi Badenoch said the Royal Mail’s universal service obligation will need to be protected in any sale of the firm.

IDS said Mr Kretinsky had agreed to offer a set of “contractual undertakings” to protect key public interest factors recognising Royal Mail’s status as a major part of national infrastructure under the proposal.

Nationwide Building Society has launched an 18 month fixed-rate account paying 5.5 per cent.

The new ‘Member Exclusive Bond’ is only available to Nationwide members.

US-based artificial intelligence (AI) and technology firm Nvidia saw revenue surge by 262 per cent to £26billion in its first quarter, amid ballooning sales of its chips.

The result, which beat market expectations of $24.7billion, followed growth of 265 per cent in the previous quarter, as Nvidia’s stellar growth continues at pace.

What does the car you own say about you?

It could be that you’re budget savvy. Maybe it tells others you like premium products. But it could also suggest that you’re likely to be unfaithful, a new study claims.

Rolls-Royce has kept its annual guidance unchanged following a continued rebound in plane journeys since the year started.

The engineering giant revealed large engine flying hours – a measure of how much airlines use its engines – returned to pre-pandemic levels in the opening four months of 2024.

The price of getting a heat pump fitted is a major hurdle for households considering replacing their gas boiler.

The National Audit Office said in March that the high cost of heat pumps and a lack of understanding were preventing more households from choosing the energy-saving devices.

Britain’s competition regulator is pressing ahead with a full market investigation into the veterinary sector amid concerns pet owners are being overcharged.

The Competition and Markets Authority on Thursday warned that UK vet groups could be forced to cap prescription fees, sell off parts of their business and give mandatory information to pet owners if the probe finds it necessary.

Almost a third of Britain’s 5,000 vet practices have been bought by six firms since 2013 – CVS Group, IVC, Linnaeus, Medivet, Pets at Home and VetPartners – according to the CMA.

A cautious US Federal Reserve and a slightly higher-than-expected UK inflation print this week has derailed some of the recent momentum that has driven the FTSE 100 to record highs this year.

But improving economic performance, easing inflation and expectations of looming interest rate cuts have reinvigorated interest in the FTSE 100, driving the index roughly 9.4 per cent higher since the start of 2024 to 8,479 last week.

Peel Hunt analysts Stuart Duncan and Robert Sage:

‘The attractions of HL include the 1.8m customers and market-leading proposition in the UK market.

‘We still see significant potential for the platform market to grow in the coming years, with estimates suggesting that the majority of assets are still held off-platform.

‘However, key to the outcome of this process are the founders, who still own 26% of the company today (of which Peter Hargreaves has c.20%).

‘We expect the shares to bounce today, given the level of short interest,which we estimate is at a highsingle-digit percentage of the company, and monitor the evolving situation over the next month.’

Adam Vettese, analyst at eToro:

‘Ordinarily a steady-eddie defensive stock, National Grid is where investors might seek to put cash they wish to shield from volatility or market uncertainty, which there has been plenty of in the last couple of years.

‘Today’s announcement of a $7bn capital raise via a rights issue as part of a wider £60bn 5-year plan is a huge step up in investment with the vast majority going into electricity networks.

‘Underlying operating profit was up 4% although some one-off exceptional charges contributed to EPS taking a hit, which perhaps backs up the case that this investment is needed to drive growth and deliver value for shareholders. The dividend is set to increase in line with policy despite this.

‘Understandably this and the dilution effect of the rights issue have led their share price to plunge 6.5% this morning. Will investors see this however as short-term pain for longer-term gain?’

Tesla sales have tumbled in Europe as demand stalls.

The US electric car maker, run by Elon Musk, sold 13,951 vehicles last month, according to the European Automobile Manufacturers’ Association – down by 2.3 per cent from last year and the worst total since January 2023.

National Grid plans to raise around £7billion from investors as it gears up for a £60billion investment in energy network infrastructure.

A fully underwritten rights issue of 1.09billion new shares, priced at 645p-a-piece, will equate to seven new shares for every 24 existing shares, National Grid said in a stock market statement on Thursday.

Chief executive John Pettigrew said the group will invest £60billion in the five years to the end of March 2029, which is nearly double its investment over the last five years.

London-listed stocks are treading water this morning as investors mull a new General Election campaign and await fresh economic data due later today. British equities opened flat on Thursday as Britain kicked off the election campaign for the July 4 vote, while investors focussed on more economic data later in the day to gauge the strength of the UK economy.

British Purchasing Managers’ Index (PMI) figures are due later in the day, capturing investor attention following Wednesday’s CPI data, which revealed a slower-than-anticipated easing in inflation.

National Grid has slumped 7.4 per cent after it said would raise about £7billion via a fully rights issue.

Rolls-Royce is down 1.8 per cent after the engineering company kept its annual forecast unchanged.

Wizz Air has jumped 5.9 per cent after the European low-cost airline forecast a higher annual profit.

Hargreaves Lansdown has surged 11.8 per cent after the investment platform rejected a £4.67billion takeover proposal.

Rival AJ Bell has gained 8 per cent after the investment platform reported its interim results.

Computer maker Raspberry Pi will float on the London stock exchange next month in a major boost for the City.

The Cambridge business, which sells computers to amateur coders and hobbyists, will issue shares in an initial public offering that could value it at £500million.

It has also agreed to sell £27million of shares to semiconductor designer Arm and up to £16million to investment manager Lansdowne Partners as part of the float.

Britain’s veterinary market will face a formal market investigation, after an initial review raised concerns about pricing and competition in the sector.

Concerns that pet owners might not be getting a good deal on veterinary services prompted the Competition and Markets Authority (CMA) to start looking last September into the vet market, which is estimated to be worth more than £2billion.

Sarah Cardell, Chief Executive of the CMA, said:

The message from our vets work so far has been loud and clear – many pet owners and professionals have concerns that need further investigation.We’ve heard from people who are struggling to pay vet bills, potentially overpaying for medicines and don’t always know the best treatment options available to them. We also remain concerned about the potential impact of sector consolidation and the incentives for large, integrated vet groups to act in ways which reduce consumer choice.

Bloomsbury Publishing chair Sir Richard Lambert will retire and step down from the board after seven years, and will be replaced by current independent non-exec director.

The succession plans were revealed as the publisher lifted full-year profit forecasts forecast after earnings soared 57 per cent on the back of robust demand for fantasy fiction titles, particularly by author Sarah J Maas.

The London-headquartered publisher of Harry Potter books posted a profit before taxation and highlighted items of £48.7million for the year to 29 February, up from last year’s profit of £31.1million.

Neil Shah, executive director at Edison Group:

‘National Grid’s results today showed a decline in profits by 15% to £3.05 billion, showing the difficulty as the company answers to the demand for energy transition while also answering the call for capital delivery. Disruptions in supply chains and ongoing discussions on policy measures cross UK and US have had significant impact on National Grid’s performance.

‘Renewable energy and investment into green capital investment was a huge focus, as National Grid delivered a year of record capital investment and reached a higher proportion of green capital investment at 78% of Group capital expenditure, marking £6billion of green capital investment.

‘All eyes are on National Grid’s announcement on its £60 billion energy transition investment plan over the next five years, along with its decision to sell Grain LNG, its UK LNG asset, and National Grid Renewables, its US onshore renewables business.

‘This clearly shows National Grid’s focus on the decarbonisation of energy system, while also working to deliver more jobs across both sides of the Atlantic. As pressure amounts to push for more renewable and sustainable solutions, it is natural that National Grid is pushing for additional investments.

‘Looking ahead, it seems National Grid is poised for additional growth as the effects of this long-term investment plan come into fruition.’

Takeover target Anglo American has agreed to enter talks with suitor BHP after rejecting the Australian miner’s latest £39billion offer.

The London-listed firm, whose empire includes De Beers diamonds and a potash mine in Yorkshire as well as vast copper and iron ore deposits, has given its larger rival another week to thrash out the terms of a deal.

It marked a significant concession by the Anglo board, which until recently had refused to engage with BHP, having rebuffed two earlier bids worth £31billion and £34billion.

Nationwide Building Society has announced it will pay out another ‘Fairer Share’ bonus this year.

Members will receive the payment directly into current accounts in June.

It comes as the mutual giant said its pre-tax profit was £1.77billon in the year to April, down from £2.2billion last year.

Britain’s biggest investment platform has become the latest London-listed company to be targeted by foreign bidders.

After the market closed last night, Hargreaves Lansdown said it had received two approaches from a consortium of buyers regarding a possible takeover.

The latest offer – worth 985p a share or £4.67billion – was unanimously rejected by the board ‘on the basis it substantially undervalues Hargreaves Lansdown and its future prospects’.

National Grid is hoping to raise £7billion to invest in energy network infrastructure, via a fully underwritten rights issue of 1.09 billion new shares.

The capital raise is by way of a fully underwritten rights issue at 645p per share on the basis of seven new shares for every 24 existing shares, the company said.

The rights issue will help fund National Grid’s significant capital investment of about £60billion in energy network infrastructure.

Boss John Pettigrew said the move is reflective of the company ‘cementing our position as a leader in the energy transition in the UK and US northeast’.

He added: ‘On both sides of the Atlantic, governments and regulators are moving with increased urgency to attract the levels of investment required to meet their decarbonisation targets.

‘As economies become increasingly digital, electrified and decarbonised, the need for energy infrastructure has rarely been more pressing. Our investment will unlock significant economic growth and, by the end of the decade, National Grid is expected to support over 60,000 more jobs, while also decarbonising our energy systems, bolstering security of supply, and reducing consumer bills in the long term.

‘Our strong track record of infrastructure delivery, positive engagement with our regulators and wider stakeholders, alongside clarity on the scale and profile of our capital investment positions National Grid to take advantage of the significant growth opportunities we see ahead.’