Tuesday, September 4: UK markets enjoyed brief respite from trade woes yesterday, before catching on this morning though both The FTSE 100 closed -0.62% despite the continued slide of sterling against the dollar as WPP and the mining sector were lower intraday, with the latter hit by lower copper prices. The pound proved to be slightly more resilient versus the euro intraday.
WPP(-5.66%) was the largest faller on the FTSE 100 index after issuing a mixed set of interim results for 2018. It was announced that Q2 was the first quarter of like-for-like net sales growth in more than a year, though long term guidance was managed lower as the business continued to struggle in North America. Management now guide that revenue less pass-through cost is now forecast at the industry average versus above average previously, though the target of headline EPS growth of 5-10% per annum was maintained. The Group is bearing the brunt of the sea change towards digital ads, and away from WPP’s traditional product base. As a result the Board are planning to update the market on strategy going forward with disposals of select assets deemed likely.
Another day, another Brexit headline. US-based pharmaceutical company Pfizer announced that the costs induced by Brexit will likely cost the business $100m. The business highlighted the exacerbated costs would stem from transferring product testing and licenses to other countries, changing clinical trial management procedures, along with other preventative measures. This comes as the business is working to comply with EU legal requirements after the UK is no longer an EU member state, within the areas of regulatory, manufacturing and supply chain areas. For some perspective, Pfizer derived only 2% of its $53bn revenue from the UK in 2017.
In more Brexit related news, current Governor of the Bank of England announced a decision would be announced on his future in “due course” whilst also declaring he would do whatever he could “to promote a smooth Brexit and an effective transition at the Bank.
At the close European equities were mixed, with the FTSE 100 -0.62%, the CAC 40 -1.31% and the DAX -1.10%.