BUSINESS LIVE: CMA steps up Barratt-Redrow investigation; Deliveroo posts profit; Beazley profits double

Beazley raised its 2024 forecast after the insurer’s first-half pre-tax profit nearly doubled to $728.9 million, boosted by growth in property risk premiums.

Beazley, which provides cyber liability, property, marine, reinsurance, casualty, life and political risk insurance, said its undiscounted combined ratio is expected to be around 80 percent, compared with a previous forecast of a low 80 percent.

A combined ratio – which measures an insurer’s profitability – above 100 indicates an underwriting loss. A lower figure indicates better profitability.

The insurer, which analysts estimate has about 8 percent of the global cyber insurance market, had eased investor concerns by leaving its annual forecast unchanged last month following the CrowdStrike outage.

Deliveroo has finally hit the double-digit profit and free cash flow milestone in the six months to the end of June as customer demand stabilised.

The food delivery service reported a profit of £1.3m, compared with a loss of £83m a year ago, and free cash flow of £3.2m – up from negative cash flow of £27.7m.

Founder and CEO Will Shu said:

‘Looking ahead, despite the continued uncertainty in the external environment, I am encouraged by the change we are currently seeing in consumer behaviour in many of our markets.

‘The Deliveroo platform is more powerful than ever and we continue to respond to the external environment, while optimising our offering for consumers, deliverers and merchants.

“We operate in attractive verticals, in large, underdeveloped markets, and it is clear that there is significant room for growth in our sector.”

The FTSE 100 rallied as global markets recovered from a sharp sell-off earlier this week, sparked by fears of a US recession and tensions in the Middle East.

The blue-chip index rose 1.75 percent, or 140.19 points, to 8,166.88 as the Bank of Japan tempered talks of further rate hikes. The central bank last week raised interest rates for the second time in 17 years.

“As we see strong volatility in domestic and foreign financial markets, it is necessary to maintain the current level of monetary easing,” said Shinichi Uchida, deputy governor of the Bank.

In response to the CMA’s findings, Barratt and Redrow said they were “working together” to ensure the deal comes into effect “as soon as possible in the second half of the year”.

Barratt boss David Thomas:

‘We are pleased that the CMA has found that there will be no competitive harm in all areas except one where Barratt and Redrow overlap.’

‘We remain confident that the combination of Barratt and Redrow will be approved and that it is in the best interests of our customers and wider stakeholders. Together we intend to build on our shared strengths and create an exceptional housebuilder, in terms of quality, service and sustainability, that helps deliver the homes the country needs.’

Matthew Pratt, CEO of Redrow:

‘Barratt and Redrow are two leading housebuilders with strong reputations for quality, service and sustainability that span decades.

“Once the CMA process is complete, we look forward to our future as one team, accelerating the delivery of the high-quality homes the country so urgently needs.”

Barratt Development’s £2.5bn takeover of housebuilding rival Redrow could face a major ‘Phase 2’ investigation after a regulator probe highlighted competition concerns.

The Competition & Markets Authority had concerns about ‘the environment surrounding a Barratt development in Whitchurch’, which also includes nearby towns Nantwich, Ellesmere and Market Drayton.

The regulator fears the deal could lead to higher prices and lower quality homes for homebuyers in the area, where both companies operate.

It said: ‘Barratt and Redrow now have the opportunity to submit proposals that address the CMA’s concerns in the area surrounding the Tilstock Road development, in order to prevent the deal from proceeding to an in-depth Phase 2 assessment.’