Ferguson to demerge Wolseley, DS Smith backs FY expectations

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The FTSE 100 was called to open 17 points higher at 7,298.

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Plumbing and heating products distributor Ferguson said it planned to spin off its UK operations and list it as Wolseley as chief executive John Martin announced he would step down on November 19.

"The demerger will enable both Wolseley UK and Ferguson to focus on accelerating the execution of their independent plans, providing clear investment propositions for each business,” Martin said.

DS Smith assured investors that its expectations for overall financial performance remained unchanged despite continued macro-economic uncertainty.

The FTSE 100-listed packaging business said strong pricing discipline, ongoing operating cost efficiencies and new business wins in Europe and the US have allowed the company to progress despite subdued volumes in Germany, as well as other economies with significant export-led market exposure.

Tesco has sold its mortgage portfolio to Lloyds Banking Group for around £3.8bn in cash.

As a result of the deal, Tesco Bank’s 23,000 mortgage customers will be transferred to Halifax, a division of Bank of Scotland, which is a wholly owned subsidiary of Lloyds.

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The EU is considering whether to categorise a no-deal Brexit as a major natural disaster akin to flooding, fires or earthquakes, a move that would release emergency funds to the member states most affected. The plan would allow EU officials to distribute cash from the bloc’s solidarity fund, set up in 2002 in response to that year’s severe weather. About €500m (£450m) can be accessed every year but unspent cash from the previous year is also available if required. – Guardian

The Treasury will need to find an extra £5bn from next year to fund the government’s spending promises, according to the Institute for Fiscal Studies (IFS), which said the increase could undermine the Treasury’s commitment to reduce borrowing. Boris Johnson said on Monday that Wednesday’s Whitehall spending review, which will set out department funding for 2020/21, would be the “most ambitious spending round for more than a decade”. – Guardian

Reform of controversial investment funds like those run by Neil Woodford could even up an “unlevel playing field” sucking capital away from more productive areas of the economy, a leading Bank of England official said. Threadneedle Street has turned its focus on the open-ended funds allowing investors instant access to their cash despite holding assets that can take weeks or more to sell, in the wake of the shuttering of Woodford’s flagship Equity Income Fund in June. – Telegraph

One of Britain’s biggest manufacturers has warned of a sharp downturn in its business. With the manufacturing sector contracting at the fastest pace in seven years and Britain’s automotive industry firmly in recession, JCB admitted that business had stalled in key markets, including India. The Staffordshire-based maker of excavators, earthmovers and farming equipment is owned by the Bamfords, one of Britain’s richest families. It has more than 10,000 staff and 11 of its 22 factories are in the UK. – The Times

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US stocks were closed for Labor Day on Monday.