IMI reports jump in profits, Smiths Group sells down ICU stake

London open

The FTSE 100 is expected to open 49 points higher on Friday, having closed up 0.07% on Thursday at 7,630.02.

Stocks to watch

Specialist engineer IMI on Friday reported a 12% jump in 2023 profits and forecast higher earnings this year, driven by a strong order book. Pre-tax profit for the year to December 31 came in at £387m compared with £346m a year ago. The company now expects adjusted earnings of 120 – 126p a share.

Engineering firm Smiths Group has sold a third of its stake in US-listed IV therapy specialist ICU Medical for £70m. Smiths, which sold the Smiths Medical division to ICU back in January 2022 for $2.7bn, received $500m-worth of ICU shares as part of the deal. On Friday, the company said it had offloaded 830,000 ICU shares, representing a 3.44% of shareholding and 33% of its own stake, to raise $88m for "general corporate purposes".

Babcock International Group announced on Friday that it has secured a £560m contract with the UK's Submarine Delivery Agency to conduct deep maintenance and extend the lifespan of HMS Victorious, a Vanguard Class nuclear submarine. The FTSE 250 company said the multi-year programme was designed to modernise the submarine, ensuring its operational effectiveness well into the 2030s, with over 1,000 jobs sustained in the south-west and investments in the Babcock Skills Academy for critical nuclear skills.

Newspaper round-up

Boeing said on Thursday it had reached a $51m settlement with the US state department for numerous export violations including Chinese employees in China improperly downloading documents related to US Pentagon programs. The state department said from 2013 through 2017 three Chinese employees at Boeing facilities in China downloaded technical data involving programs including the F-18, F-15 and F-22 fighter jets, the E-3 airborne warning and control system, the AH-64 Apache attack helicopter and the AGM84E cruise missile. – Guardian

Food industry trade bodies are discussing whether to take legal action against the government over post-Brexit plans that will require all meat and dairy products sold in the UK to be labelled as “not for EU”. Food producers say the labelling could add £250m a year to their costs, further fuelling inflation, and they are discussing a legal challenge as a viable option if a solution with the government is not found. – Guardian

Jeremy Hunt has scrapped plans for a scheme that would enable first-time buyers to get on the housing ladder with a 1pc deposit, just days after it emerged the Treasury was considering the move. Treasury insiders said the Chancellor had abandoned the taxpayer-backed scheme ahead of the Budget next week following a backlash from lenders that warned that the plans risked a surge in defaults among borrowers. – Telegraph

Fund managers with collective assets under management of nearly £100 billion have added their voices to calls for Jeremy Hunt to introduce a “British Isa” in next week’s budget to encourage investment in British companies. In a letter to The Times today, the signatories, who include fund managers such as Liontrust, brokers led by Peel Hunt and Canaccord Genuity, and senior City figures such as Baroness Altmann, have called on the chancellor to create a new UK Isa. – The Times

British drinkers bought ten million fewer bottles of wine in the run-up to Christmas after the government’s duty increases, leaving a black hole in Treasury finances, the industry has warned. In a letter to the chancellor, wine bosses say that last August’s double-digit increase in the tax on most wines and spirits has stifled sales, fuelled inflation and reduced revenue to the Treasury. – The Times

US close

US stocks turned in modest gains on Thursday after a closely watched gauge of inflation showed that price pressures had continued to ease last month, reigniting hopes of a rate cut in the first half of the year.

At the close, the Dow Jones Industrial Average was up 0.12% at 38,996.39, while the S&P 500 advanced 0.52% to 5,096.27 and the Nasdaq Composite saw out the session 0.90% firmer at 16,091.92.

The Dow closed 47.37 points higher on Thursday, reversing losses recorded in the previous session.

According to the Department of Commerce, the so-called price deflator for personal consumption expenditures rose by 2.4% year-on-year in January, in line with forecasts and following a 2.6% annual increase in December.

Meanwhile, the core rate eased to 2.8% from 2.9%, matching economists' expectations.