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(Alliance News) - Lloyd's of London on Thursday said it made a big swing back into profit last year, but the insurance market warned that the conflict in Ukraine "will be a major claim to the market in 2022".
Lloyd's said it swung to an overall profit of GBP2.3 billion in 2021 from a GBP900 million loss in 2020, as an 11% rise in premium rates improved underwriting profitability.
The market's combined ratio improved to 93.5% last year from 110.3% in 2020. A ratio below 100% indicates profitable underwriting, so the lower the better.
Lloyd's said its capital and solvency position is "very strong" and continues to build. Net resources increased to GBP36.6 billion, up GBP2.6 billion from a year before.
The insurance market said it is speaking with partners to understand exposures to the war in Ukraine. It said business underwritten in Ukraine, Russia and Belarus represents less than 1% of its global footprint.
"In a world buffeted by increasingly complex and connected risks - from the pandemic to a geopolitical conflict - the Lloyd's market is standing by its customers and supporting their recovery when things go wrong," said Chief Executive Officer John Neal.
Here is what you need to know at the London equity market open:
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MARKETS
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FTSE 100: up 0.2% at 7,474.35
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Hang Seng: down 0.9% at 21,945.95
Nikkei 225: closed up 0.3% at 28,110.39
S&P/ASX 200: closed up 0.1% at 7,387.10
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DJIA: closed down 448.96 points, or 1.3%, at 34,358.50
S&P 500: closed down 1.2% at 4,456.24
Nasdaq Composite: closed down 1.3% at 13,922.60
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EUR: down at USD1.0980 (USD1.1005)
GBP: down at USD1.3180 (USD1.3201)
USD: up at JPY121.65 (JPY121.03)
GOLD: up at USD1,942.18 per ounce (USD1,933.76)
OIL (Brent): soft at USD121.68 a barrel (USD121.99)
(changes since previous London equities close)
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ECONOMICS AND GENERAL
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Thursday's key economic events still to come
0930 CET Germany flash purchasing managers' index
0930 GMT UK CIPS-Markit flash manufacturing and services PMI
0830 EDT US durable goods orders
0830 EDT US jobless claims
0945 EDT US flash manufacturing and services PMI
1030 EDT US EIA weekly natural gas storage report
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Chancellor of the Exchequer Rishi Sunak has warned the UK is facing "challenging and uncertain" times after official forecasters predicted the biggest fall in living standards on record. Following his spring statement on Wednesday, the chancellor insisted the government was "on the side of hard-working families". But the opposition Labour party said that he had done nothing to tackle the cost-of-living crisis facing households up and down the country. In his Commons statement, Sunak announced a 5p cut in fuel duty and an increase in the threshold at which people pay national insurance contributions. Appearing on an LBC radio phone-in on Wednesday evening, Sunak said 70% of people would be better off as a result – despite an impending increase in national insurance rates to pay for the NHS and social care.
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NATO chief Jens Stoltenberg said Russian President Vladimir Putin made a "big mistake" by invading Ukraine, as leaders gathered to discuss overhauling the alliance's eastern defences. "President Putin has made a big mistake and that is to launch a war against an independent sovereign nation. He has underestimated the strength of the Ukrainian people, the bravery of the Ukrainian people and their armed forces," Stoltenberg said ahead of a NATO summit in Brussels. Stoltenberg said the leaders of the US-led military alliance would "address the need for a reset of our deterrence and defence in the longer term", starting with agreeing new deployments to eastern members Romania, Hungary, Slovakia and Bulgaria. US President Joe Biden warned before heading to Europe of a "real threat" that the Kremlin could use chemical weapons in Ukraine. Stoltenberg told journalists that "any use of chemical weapons would fundamentally change the nature of the conflict".
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The Moscow Stock Exchange resumed trading of some shares Thursday, as it continued re-opening after a month-long suspension over Russia's military operation in Ukraine. Trading resumed for only around 30 of the largest companies that make up the ruble-denominated MOEX Russia Index, which saw early gains of up to 10%.
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BROKER RATING CHANGES
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JPMorgan raises British American Tobacco to 'overweight' (neutral) - price target 4,000 (3,550) pence
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RBC raises Rightmove to 'sector perform' (underperform) - price target 630 (600) pence
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Jefferies cuts Drax to 'hold' (buy) - price target 700 (660) pence
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COMPANIES - FTSE 100
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Clothing and homewares retailer Next reported a surge in annual profit but downgraded its earnings expectations following the closure of websites in Ukraine and Russia. For the financial year that ended January 29, revenue was up 31% to GBP4.63 billion from GBP3.53 billion the year before, and pretax profit surged to GBP823.1 million from GBP342.4 million. Pretax profit was marginally higher than the company's recent guidance of GBP822 million. The high street chain said it was seeing a sharp reversal of lockdown fashion trends and return to formalwear. Looking ahead, Next reduced its central guidance for full-year full price sales growth to 5% from 7%, amid closure of its websites in Ukraine and Russia. For the current financial year, Next lowered its sales guidance by GBP85 million and profit by GBP10 million.
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COMPANIES - FTSE 250
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Bridgepoint, a London-based private equity firm previously known as Atlantic Investments, said it delivered a strong trading performance ahead of the expectations it set out at the time of its initial public offering last July. For 2021, pretax profit was GBP62.6 million, up 29% from GBP48.5 million in 2020, and total operating income GBP270.6 million, up 41% from GBP191.8 million. Bridgepoint had total assets under management of EUR32.9 billion at December 31, up 24% from EUR26.6 billion at the same time the year before. Bridgepoint declared a 3.64p dividend for 2021, up from 0.79p in 2020. Looking ahead, Bridgepoint said it is well positioned for 2022, with its financial performance in line with expectations.
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Games Workshop said trading in the three months to the end of February 2022 has been in line with expectations. It declared a dividend of 70 pence per share, in line with the company's policy of distributing truly surplus cash.
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Future said it has acquired digital-only entertainment publisher WhatCulture.com and data insight platform Waive, both for undisclosed amounts. Future said the Whatculture acquisition strengthens its position in video, notably with expertise in the monetisation on YouTube. Future said the Waive purchase will extend its Aperture data platform and enhanced data science capabilities. Aperture is Future's proprietary platform that allows advertisers to access Future's first-party audience data captured across its portfolio of brands, helping them reach high-intent target audiences, it explained.
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COMPANIES - GLOBAL
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Toshiba shareholders voted against a proposal to split the Japanese conglomerate into two, dealing a fresh blow to management that will likely spell further turmoil for the embattled company. The results of the ballot held at an extraordinary shareholder meeting are non-binding, but Toshiba had been hoping to shore up support ahead of a final vote next year on the plan to spin off its electronic devices unit. The result is the latest setback for the engineering firm, which was once a symbol of Japan's tech and business prowess but has faced a series of scandals, financial troubles and shock high-level resignations in recent years. A proposal by a key Singapore-based shareholder to explore alternatives including going private was also rejected, however, highlighting the deadlock between management and activist investors over the future of the company. "Our company will review any and all strategic options in order to increase our corporate value, taking into account the opinions expressed by shareholders," Chief Executive Taro Shimada said at the end of the meeting.
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Thursday's shareholder meetings
BlackRock Throgmorton Trust PLC - AGM
Independent Investment Trust PLC - AGM
N4 Pharma PLC - AGM
React Group PLC - AGM
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By Tom Waite; thomaslwaite@alliancenews.com
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