Afternoon Financial Press Updates
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.
Black Friday took the sparkle out of Christmas for retailers. Shoppers cut back on their spending last month after splashing out on Black Friday bargains in November. Retail sales dropped 0.9% by value and volume in December, compared to a jump of 1.4% in November, data from the Office for National Statisitcs show. Economists had expected a fall of 0.8%. The official statisticians said that the data pointed to a shift in Christmas shopping from December to November, as the retailers adopt the American tradition of Black Friday promotions. Howard Archer, chief economic adviser at the EY Item Club, said the drop in December volumes was a disappointment for retailers. “This pointed to Black Friday-related promotions primarily bringing retail purchases forward to November from December rather than lifting sales overall,” he said, with savvy shoppers taking advantage of discounts.
Sophos shares cut by a quarter after slump in demand. lost about a quarter of its value this morning after the cybersecurity firm revealed a sharp slowdown in orders and warned that demand would remain subdued over the coming months. The company, which counts Ford and Toshiba among its customers, said that billings grew by 2% between October and December, down from a 14% rise a year earlier. It said that growth would remain muted over the coming months and that it had braced itself for a modest decline in orders for its financial year, which ends in March. The warning marks the third time that the company has downgraded since July, sending its shares tumbling 85.58p or 23%, to 290.02p.
Ryanair issues second profit warning in four months. Low-cost carrier has issued its second profit warning in four months blaming lower than expected air fares. It now expects full-year profits between €1bn and €1.1bn (£880m to £970m), down from its previous forecast of €1.1bn to €1.2bn. The Dublin-based airline said air fares are expected to fall 7% this winter, compared to a previous guidance of a 2% slump, adding that there was too much capacity in the short haul European air market. It expects traffic growth to increase 9% for the full year to 142m passengers, compared to the 141m it had anticipated. Michael O’Leary, chief executive, said he was “disappointed” with the profit revision.
Road haulier Eddie Stobart’s sales rise ahead of forecasts as it’s boosted by new contract wins. saw sales race ahead last year as the road haulier was improved by new contract wins. The logistics firm reported a 35% rise in full-year revenue to £843 million in the 12 months to November 30, which is ahead of market expectations. The boost was driven by £162 million of new contracts across all its sectors, according to the company. Sales were up 18%, excluding contributions from its subsidiaries iForce, Speedy Freight and The Pallet Network (TPN). Underlying earnings for the period were broadly in line with market expectations. At period end the net debt was around £154 million, a rise from £109.5 million, representing working capital investment. The company said the increased investment is needed to support the ‘significant levels of sales increase’ and the added debt associated with the acquisition of TPN.
Poor mobile phone sales set to drag Dixons Carphone down again when it updates investors next week. is expected to book another sales slump at its troubled mobile phone division when it reports on its third-quarter performance next week. City analysts forecast the retailer’s Carphone Warehouse outlets will post a 5% decline in like-for-like sales in the period, which includes Christmas. The Currys PC World owner’s shares were stung in December when it detailed mammoth write-downs on the value of Carphone, alongside a £200 million cost-cutting exercise.
Tesla to cut more than 3,000 jobs because cars ‘still too expensive’. Elon Musk says he has no choice but to reduce electric car manufacturer’s headcount. Tesla is cutting more than 3,000 jobs, or 7% of its workforce, after experiencing a year its founder, Elon Musk, said was both its most challenging and most successful. The chief executive of the electric car manufacturer told staff on Friday that “the road ahead is very difficult” because its products were not yet affordable for most people and it was up against a big incumbent industry. The California-based company had a torrid 2018 as it struggled through production problems with its mass market” Model 3 car and had to pay out $40m over tweets Musk made about taking the firm into private ownership. Musk said it had also been a good year because Tesla had sold almost as many cars in 2018 as it had in its entire history and the firm had made its first profit.
‘Nimble’ Miton doubles up as it pulls in £1bn of savers’ money. Fund manager attracted a record £1 billion from savers last year after financial advisers started to divert more cash to more “nimble” stockpickers. The boutique firm, which is shunning the sector’s merger fever, said net inflows rose 106% from £494 million due to the strong performance of its funds. “Financial advisers and discretionary managers who buy our funds really do like active funds that help them manage their client portfolios in performance terms, but also do something different,” said chief executive David Barron. “You’ve got to have a model of scale where you go for very large assets and big scalable funds, or you’ve got to be more active and specialist and nimble like us.”
Canadian investor Realstar on Friday ignored Brexit jitters in the residential market, and revealed it has agreed to create £200 million of new rental homes in London. It has just inked a deal with and housing association Places for People to acquire a plot by the Olympic Park in Stratford. It will also fund a project being built by FTSE 250 business Redrow in Southall, west London. Realstar will build more than 300 homes on the sites, and the Southall project will be run by its new residential brand called Uncle. The firm’s UK boss Ryan Prince said he wants to “aggressively” grow Uncle, which aims to create high-quality rental homes, filled with Made.com furniture, free on-site gyms, and no-letting fees to estate agents. At present there are around 2000 existing or under construction Uncle flats, mostly in London.
Disclaimer & Declaration of Interest
The information, investment views and recommendations in this article are provided for general information purposes only. Nothing in this article should be construed as a solicitation to buy or sell any financial product relating to any companies under discussion or to engage in or refrain from doing so or engaging in any other transaction. Any opinions or comments are made to the best of the knowledge and belief of the writer but no responsibility is accepted for actions based on such opinions or comments. Vox Markets may receive payment from companies mentioned for enhanced profiling or publication presence. The writer may or may not hold investments in the companies under discussion.