Investors will be pleased with Balfour Beatty’s results. They will not be pleased that the person who drove the strong performance will soon step down.

Despite a tricky economic backdrop, the company reported strong revenue growth and a growing order book during the 2024 full-year period. The strong performance resulted in a 9% increase in the dividend.

“Balfour Beatty’s results underline why CEO Leo Quinn will be such a hard act to follow,” said Susannah Streeter, head of money and markets, Hargreaves Lansdown.

“He has masterminded the company’s turnaround from a struggling firm to an industry leader focused on high margin contracts. Investors have clearly been concerned about whether the firm, under new CEO Philip Hoare can maintain momentum.”

This concern may be why Balfour Beatty shares dropped on Wednesday. Results were strong, and the dividend combined with share buybacks are reason enough to like the stock.

“Full year revenue came in at £10 billion, beating broker forecasts of £9.4 billion, and it’s hailed a high-quality order book providing not just robust short-term opportunities but significant medium to long-term potential,” Streeter said.

“Investors are being rewarded by a 9% increase in the full year dividend and a £125 million share buyback programme. The company has also made it clear that Philip Hoare won’t be flying solo just yet, with Quinn set to stay in a strategic advisory role to help him bed in, which will provide some reassurance.”

Cake Box Holdings has announced its intention to acquire Ambala Foods Limited, a well-established manufacturer and retailer of Asian sweets with deep roots in British Asian communities dating back to 1965.

The deal comes amid strong organic growth for Cake Box, which is also expanding the number of its own brand stores.

The acquisition, valued at £22 million, represents a strategic expansion for Cake Box, which has built its reputation as the UK’s largest retailer of fresh cream celebration cakes.

The deal includes £16 million for Ambala itself and an additional £6 million for Ambala’s manufacturing facility located in Welwyn Garden City.

Cake Box will fund the deal through a proposed placing at an issue price of 180 pence per share, aiming to raise gross proceeds of £7 million before expenses. The remainder of the acquisition cost will be covered by a new £15.2 million Term Loan Facility, with any balance coming from Cake Box’s existing cash reserves.

Additionally, the company is undertaking a Retail Offer to existing retail shareholders in the UK with the goal of raising up to an additional £0.2 million.

The acquisition of Ambala Foods brings 22 stores into the Cake Box fold, comprising 19 owned stores and three franchised locations. Ambala, which has remained family-run since its inception, specialises in Mithai, traditional Asian sweets.

“We are pleased to announce the acquisition of Ambala Foods Ltd, a leading manufacturer and retailer of Asian confectionery in the UK since 1964. This strategic acquisition represents a significant opportunity to leverage the strengths of both brands to expand our market presence and accelerate our growth,” said Sukh Chamdal, Chief Executive Officer of Cake Box.

“Ambala’s rich heritage and established customer base complement Cake Box’s values and commitment to quality and innovation. By adding Cake Box’s expertise and resources to Ambala, we aim to create a unique blend of traditional and contemporary delicacies that appeal to a diverse audience, ultimately driving growth and profitability.

“We are confident that this acquisition will resonate with Cake Box’s existing customer base and to its commitment to quality products and customer service.”

Recent Cake Box trading

The acquisition comes after a period of robust trading for Cake Box. In a trading statement released alongside the acquisition news, Cake Box has reported continued year-on-year improvement in sales since its interim results to 30 September 2024 and celebrated record sales during the recent festive period.

Furthermore, Cake Box remains on track to open more than 25 new stores by the end of its financial year on 31 March 2025.

The board has expressed confidence that Cake Box will meet market expectations for the current financial year, suggesting that the positive trading conditions have continued despite the broader economic challenges facing UK retailers.

The FTSE 100 was under pressure again on Tuesday after an overnight US stock market rout rocked sentiment and demand for risky equities.

US equity indices were a bloodbath overnight, with the NASDAQ tumbling nearly 4%—the biggest one-day drop in two years. Tesla shares sank over 15%, and other ‘Mag 7’ shares fell sharply.

Donald Trump’s damaging trade war is at the centre of the stock market rout, with fears growing that the US may tip into a recession as a result of tariffs on its biggest trading partners. 

Trump himself has refrained from ruling out a US recession caused by his policies, which, ironically, are likely to heavily impact his core voter base. 

“During his first term as US president, Donald Trump often cited a rising stock market as being representative of his success,” said Dan Coatsworth, investment analyst at AJ Bell.

“As such, he will not want to see a full-blown market crash months into his second term. Quite what rabbit he could pull out of the hat to put markets back on an upwards path is unknown, but Trump might feel compelled to come up with something.”

Although there is no sign of the ‘Trump Put’, equity bulls will hope his approach to tariffs will soften given the market fallout. There will be a school of thought the recently imposed tariffs are an extreme negotiating tool that could well be reversed. 

Analysts suggest that Trump’s approach to policy could provide benefits over the long term, but what they may be isn’t exactly clear, and there will likely be severe market disruption in the interim.

“The Admin are, for now, doubling down on the idea of ‘short term pain, for long term gain’, in the hope that macro headwinds can be blamed on the Biden Admin, and that Trump & Co will be able to claim credit for the economic, and market, turnaround that would likely follow. While I see how this might be politically expedient, juicing the economy just in time for the midterms, it’s rather economically incoherent, particularly for an Oval Office which claims to be more focused on Main Street, than on Wall Street,” said Michael Brown Senior Research Strategist at Pepperstone

“To be clear, if Trump & Co are able to cut federal waste, decrease the size of the government, and juice the private sector, as much as they are touting, then it gives me confidence that the long-run path of least resistance should continue to lead to the upside on Wall St. However, in the short-term, it remains difficult to advocate buying dips, with the bear case holding more weight for me.”

The FTSE 100 had shown signs of resilience amid recent sell-offs of US stocks, but that resilience, usually caused by a rally in defence and pharma stocks, was absent again on Tuesday. 

London’s leading index was down 0.3% at the time of writing with Spirax leading the way lower.

Spirax shares fell 4% after reporting lower revenue and profit.

Housebuilders and miners offered some positivity and helped offset broad losses elsewhere.