Afternoon Press Round-Up
Paul Kettle
PM Financial Press Review
15:22, 8th November 2018

Below are the key headlines from today’s updated papers, featuring the Financial Times, The Times, The Telegraph, The Daily Mail & more - see the full Press section here.

Profits rise at Sainsbury’s despite sluggish sales growth. Sainsbury (J) (SBRY) FOLLOW underlying pre-tax profits are up by 20 per cent after it slashed costs but growth in its core grocery division remained sluggish compared with rivals. Britain’s second largest grocer, which is in the midst of trying to merge with Asda, recorded an underlying pre-tax profit of £302 million in the six months to September 28, up 20.3% on last year. This beat market expectations of £278 million and came after it took £121 million of costs out of the business during the period. When exceptional costs, such as those linked to the restructuring of its shop management teams and its proposed merger with Asda, are taken into account its statutory pre-tax profits fell sharply from £220 million to £132 million. The group’s underlying like-for-like sales also rose by only 0.6% in a market that it said was “very competitive”, weaker than recent growth figures reported by rivals Tesco and WM Morrison.

Boost for logistics firm Wincanton as customers’ Brexit stockpiling starts. Wincanton (WIN) FOLLOW has seen an increase in business as companies that use imports “start to build up reserves” ahead of Brexit, the logistics firm’s boss said on Thursday. Adrian Colman told the Evening Standard that some clients have recently started to bring in more products for storage, including engineering spare parts, “to make sure they have key components” when Britain leaves the EU next March. Drinks firms have also upped imports. Colman added that his storage and transport firm has been contacted by a number of potential new customers looking to prepare for Britain’s exit from the EU.

Astrazeneca on course for growth despite fall in revenue, says Pascal Soriot. Pascal Soriot vowed that AstraZeneca (AZN) FOLLOW had turned a corner, claiming that its quarterly results marked the beginning of a period of sustained growth. The Anglo-Swedish company posted a 13% decline in revenue to $5.3 billion in the third quarter and operating profit fell 26% to $1.3 billion at constant exchange rates. Mr Soriot, the chief executive since 2012, seized, however, on sales growth from its new drugs pipeline and the performance in China and the US, two key markets. Astrazeneca is one of the UK’s leading pharmaceutical companies, based in Cambridge, a life sciences hub, and is a constituent of the FTSE 100 index, valued at £74 billion. Shares in the group gained 45p to £59.02 this morning.

BAE Systems holds annual guidance amid Saudi controversy. BAE Systems (BA.) FOLLOW has reiterated its full-year financial guidance amid concerns over its dealings with Saudi Arabia. In a trading update the defence company posted a steady performance in its UK, US and international businesses, which includes the Middle East. BAE and other companies with links to Saudi Arabia have come under scrutiny after the international outcry over the killing of the journalist Jamal Khashoggi. The FTSE 100 company supplies aircraft to Saudi Arabia including the Typhoon fighter jet and the UK government signed a deal worth billions of pounds to sell a further 48 jets to the kingdom in March. BAE did not name Saudi Arabia directly in its update this morning but said: “Whilst a degree of geopolitical turbulence exists, the potential pipeline for Typhoon remains positive with opportunities both with partner nations and through exports.”

Burberry Group (BRBY) FOLLOW has toasted the “exceptional” response to its new designer Ricardo Tisci’s runway collection but warned the City will have to wait a bit longer to see the results of his creative vision in its numbers. Burberry said that it would meet profit forecasts as its £173m half-year adjusted operating profits slightly beat analyst consensus of £169m and a 3% drop in sales to £1.2bn was in line with expectations. The business was helped by a boost in its wholesale business as Chinese luxury shoppers snapped up its goods in duty free outlets

Central London landlord Derwent London (DLN) FOLLOW is pressing ahead with new developments after a “resilient” quarter of new lettings to clients including Sony and the Premier League. The FTSE 250 company drummed up £14.6m of new lettings in the three months to September, taking its total in the year-to-date to £23m. Derwent has now pre-let 90% of its space at its 80 Charlotte Street office development and 68% of the space in its Brunel building, two major projects in Paddington which are currently under construction. Its overall vacancy rate now sits at 2.3%, down from 4.2% in June.


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