LONDON BRIEFING: Unilever sees Q1 turnover decline; Asos loss narrows

(Alliance News) - London's FTSE 100 is called to open lower on Thursday, as talks on the Ukraine war progress towards a potential ceasefire and US President Donald Trump suggests new tariffs on China could be set within the next few weeks.

UK Chancellor Rachel Reeves has travelled to Washington for the International Monetary Fund's spring meetings of G7 and G20 finance leaders, but is also to meet US Treasury Secretary Scott Bessent on Friday for negotiations on a potential deal to mitigate the impact of tariffs on the UK.

Meanwhile, UK consumer sentiment slipped significantly in April, as escalating trade tensions have left economic expectations downcast.

In early corporate news, online-only fashion retailer Asos narrows its interim loss, while consumer goods firm Unilever remains on track for the demerger of its Ice Cream business.

Here is what you need to know at the London market open:

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MARKETS

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FTSE 100: called down marginally at 8,402.08

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Hang Seng: down 1.1% at 21,825.90

Nikkei 225: closed up 0.4% at 35,019.47

S&P/ASX 200: closed up 0.7% at 7,975.90

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DJIA: closed up 419.59 points, or 1.1%, at 39,606.57

S&P 500: closed up 88.10 points, or 1.7%, at 5,375.86

Nasdaq Composite: closed up 407.63 points, or 2.5%, at 16,708.05

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EUR: down at USD1.1351 (USD1.1367)

GBP: up at USD1.3277 (USD1.3274)

USD: up at JPY142.72 (JPY142.42)

Gold: up at USD3,319.89 per ounce (USD3,273.46)

(Brent): down at USD65.46 a barrel (USD65.74)

(changes since previous London equities close)

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ECONOMICS

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Thursday's key economic events still to come:

09:00 BST Germany Ifo business climate

14:00 BST eurozone European Central Bank Governor Philip Lane speaks

14:25 BST UK Bank of England Deputy Governor Clare Lombardelli speaks

16:05 BST Germany Deutsche Bundesbank executive board member Fritzi Kohler-Geib speaks

13:30 BST US Chicago Fed national activity index

13:30 BST US initial jobless claims

13:30 BST US durable goods orders

15:00 BST US existing home sales

15:30 BST US EIA natural gas stocks

16:00 BST US Kansas City Fed manufacturing activity

US IMF Spring meeting

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UK consumer sentiment weakened sharply in April, as fears over a potential trade war weighed heavily on economic expectations, new survey data from the British Retail Consortium showed. According to the BRC-Opinium consumer sentiment monitor, expectations for the state of the UK economy over the next three months fell to a net score of negative 48, down significantly from negative 35 in March. Expectations for personal finances also worsened, dropping to negative 16 from negative 10. The survey was conducted shortly after President Trump's proposed "Liberation Day" tariffs, which triggered concerns about escalating global trade tensions. "With fieldwork completed just days after Donald Trump's tariffs, it is unsurprising that consumer expectations for the economy plummeted to a record low," said Helen Dickinson, chief executive of the BRC. "Even with a pause on many of the US tariffs, business and consumer confidence remains fragile."

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UK Chancellor Rachel Reeves has travelled to the US capital for the International Monetary Fund's spring meetings of G7 and G20 finance ministers. But she is also expected to meet US Treasury Secretary Scott Bessent on Friday in an attempt to make progress on negotiations for a UK-US economic deal aimed at mitigating the impact of tariffs announced by Trump earlier this month. The UK was placed in the lowest tier when Trump unveiled his global tariffs on April 4, facing a 10% levy on all goods except cars, steel and aluminium, which attract a 25% charge. Ministers are hopeful a deal can be done to reduce that rate, with Reeves telling an event in Washington: "What we hear from the US administration is that they are keen to do a deal with the UK, reflecting the closeness of that relationship." But the chancellor has also appeared to rule out at least some changes to non-tariff barriers that the US is thought to be seeking. One sticking point is likely to be agricultural imports, with some US exports not meeting UK food standards. Reeves insisted that the government would not dilute British standards as part of a trade deal, telling BBC News the US administration "respect and understand that". She also appeared to rule out changes to the Online Safety Act, which some US politicians regard as restricting free speech, telling Sky News: "We've just passed the Online Safety Act and the safety, particularly of our children, is non-negotiable for the British government." Asked about changes to road safety laws that would allow American SUVs to be sold in the UK, she said the government was "not going to water down areas of road safety". Meanwhile, Wednesday saw Reeves announce the government would take action to stop high street retailers being "undercut" by cheap imports, beefing up the Trade Remedies Authority and reviewing the rules on low-value imports.

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Germany is expected to lower its economic forecast for 2025 to zero growth in what is shaping up to be another difficult year for Europe's biggest economy reeling from two consecutive years of recession. Outgoing Economy Minister Robert Habeck is due to present the government's revised forecast at 1215 BST, after Berlin previously predicted gross domestic product, GDP, to grow by 0.3% in January. But government sources said the outgoing centre-left coalition led by Chancellor Olaf Scholz now expects the economy to stagnate in 2025, with little sign of relief following the recessions of 2023 and 2024. While marginally more positive, January's outlook was already downgraded from the 1.1% GDP growth forecast in October last year. Germany's economy has been mired in an economic crisis in recent years, with inflation soaring in response to the coronavirus pandemic and the Russian invasion of Ukraine. Key export-based industries such as carmaking and pharmaceuticals are set to be hit hard by US tariffs, with a blanket 10% duty on all imports to the US and 25% levies on cars, aluminium and steel already in force.

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President Trump said a deal to halt the Ukraine war was "very close" Wednesday but hit out at Ukrainian leader Volodymyr Zelensky over his refusal to formally cede Crimea to Russia. Trump's comments came as Vice President JD Vance warned that the US would "walk away" unless Russia and Ukraine agree on a peace deal. US media has reported that Trump is ready to accept recognition of annexed land in Crimea as Russian territory, but Zelensky told journalists this week it was Ukrainian territory and recognising it as Russian "is against our constitution". "It's inflammatory statements like Zelensky's that makes it so difficult to settle this War," Trump said in a post on Truth Social, adding that Zelensky's remarks will do nothing but prolong the "killing field". He added: "We are very close to a Deal, but the man with 'no cards to play' should now, finally, GET IT DONE." Trump also told reporters: "I think we have a deal with Russia, we have to get a deal with Zelensky."

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Trump said new tariffs on imports from China could be set in "two or three weeks," as the trade dispute between the world's two largest economies continues. "If we don't have a deal with a company or a country, we're going to set the tariff. We just set the tariff," Trump said in the Oval Office. In response to a reporter asking whether the US and China were having direct talks, Trump said "yeah, of course, every day." Asked how soon he intended to reduce the tariffs on Chinese imports to the US, Trump said "that depends on them."

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Bank of England Governor Andrew Bailey said Wednesday that the trade war initiated by Trump will impact global growth that could hit Britain even if the country avoids the heaviest tariffs. "Fragmenting the world economy will be bad for growth," Bailey told the Global Outlook Forum hosted by the Institute of International Finance in Washington. Even if it avoids the heaviest tariffs "the UK's a very open economy and therefore, it's not just, obviously, the relationship between the US and the UK." "It's obviously the relationship between the US, the UK, and the rest of the world that matters here," Bailey said. "So when we do our modelling.....we also have to take into consideration the effect on growth in the rest of the world."

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The UK government has announced GBP300 million in funding for domestic offshore wind supply chains as part of a push to secure clean energy investment in the UK. The funding through publicly owned company Great British Energy, brought forward as an initial investment ahead of the spending review, will be invested in a domestic supply chain for components such as floating platforms and cables for the offshore wind industry, the government said. It is hoped the announcement of the funding, part of the GBP8.3 billion announced for Great British Energy, will mobilise additional private investment and secure manufacturing facilities for energy supply chain components which are key for the domestic offshore wind industry.

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The EU will not abandon its important trade ties with the US but wants more clarity on its negotiating position amid tensions over Trump's tariffs, the bloc's economy chief said Wednesday. Valdis Dombrovskis's remarks during a trip to Washington come as Trump's sweeping new tariffs on friend and foe this year cast a pall on global growth and strain trade ties. Since returning to the presidency, Trump has imposed additional tariffs of 10% on most US trading partners – including the EU – which he also threatened with sharper action if the bloc retaliated. Despite the new duties, Dombrovskis stressed Wednesday that "the EU is not giving up on our closest, deepest and most important partnership with the US." Washington and Brussels will likely need each other more in an "increasingly conflictual and competitive world," he asserted at an event hosted by the Institute of International Finance. Nonetheless, while the EU seeks to deepen existing partnerships, "we will also seal new partnerships across the world to diversify and strengthen our economic security at home," Dombrovskis said.

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US President Donald Trump has ordered sharper scrutiny of America's universities and the accreditors that oversee them. It forms part of his escalating campaign to end what he calls "wokeness" and diversity efforts in education. In a series of executive actions signed on Wednesday, Trump targeted universities that he views as liberal adversaries to his political agenda. One order called for harder enforcement of a federal law requiring universities to disclose their financial ties with foreign sources, while another called for a shakeup of the accrediting bodies that decide whether universities can accept federal financial aid awarded to students. Universities' financial ties with foreign sources have long been a concern among Republicans, especially ties with China and other countries with adversarial relationships with the US. The White House said it needed to take action because Harvard University and other universities have routinely violated a federal disclosure law, which has been unevenly enforced since it was passed in the 1980s. Known as Section 117 of the Higher Education Act, the law requires universities to disclose foreign gifts and contracts valued at USD250,000 or more. In the executive order, Trump calls on the Education Department and the attorney general to step up enforcement of the law and take action against universities that violate it, including a cutoff of federal money.

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BROKER RATING CHANGES

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Bernstein raises Diageo price target to 2,850 (2,475) pence - 'outperform'

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Barclays cuts Quilter price target to 125 (145) pence - 'underweight'

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UBS cuts CRH price target to 9,190 (9,250) pence - 'buy'

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COMPANIES - FTSE 100

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Unilever delivers EUR14.8 billion in turnover during the first quarter of 2025, slipping 0.9% from the year before, with underlying sales growth of 3.0%. Turnover within its Beauty & Wellbeing arm rose 2.9% to EUR3.3 billion, its Personal Care division delivered a 4.4% decline to EUR3.3 billion, while turnover in its Home Care line was down 4.2% at EUR3.0 billion. Turnover within its Foods division was up 0.1% to EUR3.4 billion, with Ice Cream turnover improving 2.8% to EUR1.8 billion. The separation of its Ice Cream business remains on track to complete during the fourth quarter of 2025, Unilever notes, adding the new business is to be called Magnum Ice Cream Co. Magnum Ice Cream Co is to be headquartered in Amsterdam, separated by way of a demerger with Unilever, and will operate on a standalone basis from July 1. The new ice cream business will be listed in Amsterdam, London and New York. Unilever declared an interim dividend of 45.28 euro cents for the first quarter, in line with its prior fourth-quarter dividend and up 6.1% on-year. Its ongoing share buyback programme for up to EUR1.5 billion is due to complete within the first half of 2025. The consumer goods firm reconfirmed its full-year outlook for 2025, as it continues to anticipate underlying sales growth between 3% and 5%, as well as a "modest improvement" in underlying operating margin, against 18.4% in 2024. "We are moving at pace, confident in making progress in 2025" says Chief Executive Officer Fernando Fernandez.

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St James's Place reports funds under management at March 31 totalled GBP188.59 billion, down 0.9% from GBP190.21 billion at the start of 2025 but up 5.3% from GBP179.04 billion a year prior. Gross inflows during the three-month period amounted to GBP5.14 billion, against GBP3.97 billion the year before, while net inflows more than doubled to GBP1.69 billion from GBP710 million. "We are pleased to have built momentum in new business in recent quarters, and we have continued to see good levels of client engagement and activity so far in April," says Chief Executive Officer Mark FitzPatrick. "Looking forward, macroeconomic uncertainty and market volatility create a challenging environment for savers and investors, but one which underlines the value that trusted financial advice delivers to clients. Our advisers continue to help clients navigate these conditions and stay on track to achieve their long-term financial goals and aspirations. We have a long history of net inflows during all phases of the economic cycle, and the quality of the partnership and the strength of our advice-led business model positions us well for the future."

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COMPANIES - FTSE 250

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Online fashion retailer Asos reports its pretax loss narrowed to GBP241.5 million during the 26 weeks that ended March 2, from GBP270.0 million the year before. Revenue, however, declined 14% to GBP1.30 billion from GBP1.51 billion, while cost of sales reduced by 21% to GBP712.8 million from GBP903.5 million. Distribution expenses were down 20% to GBP138.8 million from GBP172.6 million. Its first half results are "the strongest sign yet that our new commercial model is working", says Chief Executive Officer Jose Antonio Ramos Calamonte. "We are driving a significant transformation in profitability, with positive adjusted [earnings before interest, tax, depreciation and amortisation] up by [around] GBP60m year-on-year. Customers are responding positively to our focus on full-price sales, speed to market, and quality, resulting in a 9% YoY increase in Asos Design sales in the UK, and positive momentum with our partner brands. Importantly, these successes have been achieved whilst maintaining strong cost control and improving our inventory health. We look forward to a fantastic pipeline of new products, brands and customer experiences, and remain confident in our ability to deliver sustainable, profitable growth." Asos re-iterates its forecast for adjusted Ebitda to grow by at least 60% to between GBP130 million and GBP150 million during its 2025 financial year due to end September 1. Full-year revenue is expected at the bottom end of a company-compiled consensus range, which estimates between a 2% and 9% decline.

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OTHER COMPANIES

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Alphawave IP says new bookings during the first quarter of 2025 totalled USD95.0 million, down 19% from USD117.9 million a year prior. Licence and non-recurring engineering fees declined 33% to USD73.1 million from USD108.9 million, while royalties and silicon orders more than doubled to USD21.9 million from USD9.0 million. The provider of technology services and high-speed connectivity solutions says its pipeline of new design opportunities remains "robust" and notes it secured five new design deals during the first quarter. "We are pleased to report a strong trading performance in this period," says President & Chief Executive Officer Tony Pialis. "Our success with hyperscalers and AI accelerators continues to grow due to the diversity and robustness of our [intellectual property] and chiplet portfolio targeting [artificial intelligence]-centric data centres." Alphawave IP says it is "not in a position" to provide full-year guidance for 2025, due to "current global economic uncertainty and the rapidly developing nature of the recently imposed tariff regimes", but adds it remains "optimistic" for future growth opportunities.

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By Emily Parsons, Alliance News reporter

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