BUSINESS LIVE: Unemployment falls as wage growth slows; Just Group raises forecast; Dowlais considers unit sale

Dowlais Group could put a business unit up for sale after the engineer’s profit fell in the first half of 2024 due to problems with electric vehicle production.

The company, which was spun off from Melrose Industries last year, said adjusted pre-tax profit fell 26 percent to £95 million in the six months to June.

Keywords Studios has acquired Wushu Studios, a leading Liverpool-based game development studio.

According to the video game company, the deal consists of an upfront cash payment and an “earn-out component,” meaning the fee is dependent on performance.

(PA) – Google will use the upcoming launch of its phone to “gain an edge” over its rivals and attempt to “claim leadership” in the smartphone AI market, an expert has said.

The American company is widely expected to introduce its Pixel 9 smartphone line during the Made by Google event on Tuesday evening.

The launch comes earlier than usual, meaning Google is making the announcement before Apple unveils the next iPhone, which is traditionally introduced in September.

Ben Wood, smartphone expert and principal analyst at CCS Insight, said Google is trying to get ahead of its rival with new AI tools.

“It is interesting that Google is holding this event in August instead of the usual October timing. We believe this is an attempt to get ahead of Apple’s iPhone event in September, especially in terms of AI announcements,” he said.

“Apple will likely focus on why the iPhone is ‘the best phone for AI,’ and it wouldn’t be a surprise if there was some overlap in the potential use cases of the new Pixel phones and the new iPhone.”

Shares in Just Group rose 13 percent on Tuesday morning after the life insurer said it would “significantly exceed” annual profit expectations.

The pensions specialist said underlying operating profit rose 44 per cent to £249m in the six months to June, partly driven by growth in new business.

Analysts today revealed that food prices rose for the first time in 17 months after football fans spent £10m on beer on the day of the Euro 2024 final.

According to experts at Kantar, supermarket prices in the UK were 1.8 percent higher in the month to August 4 than a year ago, up slightly from 1.6 percent in July.

AstraZeneca is thought to become the first British company to reach £200 billion in sales.

According to broker TD Cowen, the pharmaceutical giant has “lots of business momentum and news ahead” and a “broad and deep” pipeline of drugs.

Shares listed in London opened slightly higher amid broader gains ahead of crucial inflation figures in the US and UK.

The indices are expected to extend their rally for the third straight session after closing lower for the second straight week on Friday.

The pharmaceutical, biotechnology and industrial support services sectors are the leaders with an increase of 0.7 percent each.

Most sectors are showing an upward trend, but the automotive and components sectors are showing a decline. The Dowlais Group showed a decline of 10.2 percent.

The company has fallen to the bottom of the FTSE 250 after it said it was exploring the possible sale of its GKN Powder Metallurgy division, among other things, and cut its annual revenue forecast.

The sector index fell to its lowest level since early 2009.

Just Group is among the shares that rose 10 percent to top the FTSE 250. The company said it expected to beat its previous profit forecast for 2024 as first-half profits beat market expectations.

Households in England and Wales are set to receive extra compensation from ‘broken’ water companies after government crackdown on customer service.

BT shares are in the spotlight again after another foreign billionaire bought a stake in the group.

Indian tycoon Sunil Bharti Mittal is the latest tycoon to take a stake in the telecom group. Through his investment company Bharti Enterprises, he becomes the largest shareholder.

The former owners of Wilko have failed to plug the bankrupt retailer’s £70m pension hole, in a fresh blow to thousands of former workers.

The discount chain went bankrupt a year ago, cutting 12,500 jobs and closing 398 stores.

Sam North, Market Analyst at eToro:

‘After a significant swing in the US jobs report at the start of the month, eyes turned to the UK report to see how contagious it was. The weaker than expected US report spooked the market, contributing to the big sell-off last Monday, but those hoping for similar headlines from the UK were disappointed.

‘We’ve had a good start to a week of UK data. The jobs data provided a strong market reaction, led by a significant fall in the unemployment rate and a notable rise in employment figures.

‘This robust labour market performance has more than offset slightly lower wage growth, which was impacted by the previous year’s NHS bonus payments.

‘As a result, we saw GBP/USD gain momentum, from 1.2779 to a session high of 1.2801, underlining the market’s confidence in the UK’s economic resilience. The focus will now shift to tomorrow’s inflation report, with the Bank of England hoping to see the figure hold steady around 2%.’

Wages growth in the UK has slowed to its lowest level in more than two years, according to official figures, while the unemployment rate has also surprisingly fallen.

The Office for National Statistics (ONS) reported that regular wage growth was 5.4 percent year-on-year in the three months to June.

However, this is a decrease compared to the 5.7 percent in the previous three months and is the smallest increase since the period up to and including July 2022.

Dowlais Group is exploring the possible sale of its GKN Powder Metallurgy division, among other things, after the company cut its annual revenue forecast due to disappointing production volumes at its automotive division.

The company, which was spun off from aerospace supplier Melrose Industries in April 2023, now expects adjusted revenue to decline by a mid- to high-single digit percentage in 2024.

Previously, it was expected that sales in 2024 would be ‘slightly lower’ than a year ago.

The Dowlais division is investigating opportunities for the production of powder metal components for the automotive and industrial sectors. In terms of turnover, this is the second largest division of the group.

Dowlais has also sold its hydrogen business for a token sum and will make a loss of £18m in 2024 from the sale, the group said.

Thomas Pugh, economist at RSM UK:

‘The labor market appears to be continuing to recover after last year’s mini-recession.

‘Employment grew by 97,000 in the three months to June compared with the previous three months. This, combined with a 27,000 increase in the number of inactive people, which now stands at 9.41 million – some 22.2% of the working population – was enough to bring the unemployment rate down to 4.2%.

‘If wage growth does indeed continue to decline for the rest of this year, that would be enough of a trigger for the MPC to cut rates again towards the end of the year, probably in November, and then to be more aggressive in the rate-cutting cycle in 2025. So we currently have four cuts planned for next year.’

Universal Music has struck a deal with Facebook-owned Meta in a bid to ease concerns over artificial intelligence.

The world’s largest music label has struck a deal with the social media giant that will allow users to share songs without infringing on copyright.

Just Group has raised its profit forecast for 2024 after the insurer’s first-half profit beat market expectations on strong new business in retail and pension risk transfers.

The company, which specialises in annuities (also known as pensions that pay a fixed income for life), has benefited from growing demand for insurance for company pension plans, also known as bulk annuities.

Underlying operating profit rose 44 percent to £249 million in the six months to June 30, compared with the average analyst forecast of £208 million in a company-compiled consensus.

In March, the London-listed company forecast that its £211 million operating profit for 2021 would at least double.

Just Group said Tuesday it expects to “significantly” exceed those forecasts

New data from the Office for National Statistics shows the UK unemployment rate fell to 4.2% in the three months to June 2024, higher than forecasts of 4.5%. Wage inflation also fell over the period.

Average weekly earnings, excluding bonuses, were 5.4 percent higher in this period than a year earlier, in line with forecasts and down from 5.8 percent in the previous three months.

The Bank of England said it would continue to monitor wage growth closely when it cut interest rates on August 1. The rate had been held at 5.25 percent for almost a year, the highest level in 16 years.