Trending tickers: Tesco, TSMC, Gold, M&C Saatchi
Tesco (TSCO.L)
Tesco shares climbed as much as 1% in London on Wednesday after it revealed a 160% rise in pre-tax profits, soaring from £882m ($1,119.77m) in 2022 to £2.3bn.
Sales at Britain’s largest supermarket rose by 4.4% to £68.2bn in the year to 24 February while more than 4,000 products were cheaper at the end of the year, with an average price cut of around 12%.
It is now expecting retail adjusted operating profit of at least £2.8bn in 2024-25.
Tesco also predicted that food inflation will stabilise in low single digits for the rest of the year, as it plans to make £500m in efficiency savings in the year ahead.
Retail adjusted operating profit, which excludes results from Tesco Bank, rose 10.9% to £2.76bn.
"Inflationary pressures have lessened substantially, however we are conscious that things are still difficult for many customers, so we have worked hard to reduce prices and have now been the cheapest full-line grocer for well over a year," said Ken Murphy, chief executive.
"We have continued to invest in helping customers where it matters most, cutting prices on more than 4,000 products and doubling down on our powerful combination of Aldi Price Match, Low Everyday Prices and Clubcard Prices."
Read more: FTSE 100 LIVE: European stocks push higher ahead of key US inflation report
However, not everyone was happy about Tesco's bumper profits, with Unite the Union slamming the company amid a cost of living crisis.
Sharon Graham, Unite general secretary, said: “Tesco is raking in mountains of cash while families struggle to put food on the table because of sky high prices. Many companies have used the cost-of-living crisis to grab excessive profits.
“There is an epidemic of profiteering in our economy – the government has been missing in action and failed to curb it.”
TSMC (TSM)
Taiwan Semiconductor Manufacturing Co, the world’s biggest chipmaker, saw its quarterly revenue grow at the fastest pace in more than a year.
It reported a better-than-expected 16% rise in March-quarter sales to about NT$592.6bn ($18.5bn), compared to the NT$579.5bn average expectation.
The company is now forecasted to return to solid growth this year.
It comes as TSMC has agreed to make its most advanced products in Arizona from 2028, after receiving a pledge of as much as $11.6bn in US government subsidy as part of Joe Biden’s efforts to attract computer chip production.
It already has two factories under construction in Arizona but will build a third under the latest deal with the US government. The Taiwanese company will receive up to $6.6bn (£5.2bn) in direct funding from the US government and could get up to another $5bn in the form of loans.
The deal is part of an effort to boost semiconductor production in the US. The US is currently highly dependent on Asia, especially Taiwan, for chips.
Read more: Stocks that are trending today
“America invented these chips, but over time, we went from producing nearly 40% of the world’s capacity to close to 10%, and none of the most advanced chips,” Biden said in a statement. “[That exposes] us to significant economic and national security vulnerabilities.”
The Commerce Department said the deal would create at least 6,000 direct high-tech jobs, 20,000 in the construction of factories, and tens of thousands of indirect jobs.
In January TSMC also said its AI revenue is growing at 50% annually. It is the main chipmaker to Nvidia and Apple.
Gold (GC=F)
Gold continued to shine on Wednesday, with prices up 0.3% during the session, after a near-20% surge since mid-February.
It comes as the gains have been fuelled by expectations that the US Federal Reserve will lower interest rates this year, as well as the ongoing conflict in the Middle East and Ukraine.
According to macro fund managers interviewed by Bloomberg, the precious metal's rally is far from over.
Rajeev De Mello, global macro portfolio manager at GAMA Asset Management SA said that prices may now be vulnerable to a slight correction, but any pullback is likely to bring in more buyers.
“It’s a relatively small market and it can squeeze higher very fast,” he said, comparing it to the size of US government debt securities. “It’s a very momentum driven asset, really.”
In New York’s Comex gold futures market, money managers are placing more bullish bets on gold, with net long positions rising to near four-year high in the week ending 2 April.
Meanwhile, purchases by central banks totalled more than 1,000 tons in 2022 and 2023 with much of that led by economies, particularly China, where efforts to diversify away from the dollar have accelerated.
M&C Saatchi (SAA.L)
M&C Saatchi has posted a 10% drop in 2023 profits as clients cut back on spending to weather the recession.
The agency, which is behind the “Labour isn’t working” ad, credited with putting Margaret Thatcher in power, suffered a 7% hit to revenues to £252.8m.
It blamed “macroeconomic uncertainty” for the poor performance but insisted it had a promising first quarter this year.
Trading was further impacted by weak results in the Asia-Pacific and Americas regions, where revenue plummeted by 21% and 38%, respectively.
Zillah Byng-Thorne, executive chairman, said: "We have begun to transform into a leaner and more agile business laying the groundwork for sustained growth and improved profitability ahead."
Shares were down more than 2% on the back of the news.
Last month, KPMG was fined almost £1.5m by the UK accounting watchdog over its audit of M&C Saatchi.
M&C Saatchi found accounting errors which led to the restatement of its company accounts for 2018. The FRC found breaches including a failure to “audit with professional scepticism”.
It said revenues were inflated by around £1.2 million as a result of the failures linked to client credit payments. These were ultimately revised in M&C Saatchi’s annual accounts for 2019.
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