Afternoon Financial Press Review
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.
Marks & Spencer closes 17 more stores in new blow to high street. M&S outlets in Bedford, Hull, Huddersfield and Rotherham among those to be axed with 1,000 jobs at risk. has dealt a fresh blow to the high street as it announced another wave of store closures, putting more than 1,000 jobs at risk. The struggling high street giant is shutting 100 of its stores by 2022 and on Tuesday revealed the locations of the next 17 branches to close in coming months. Sacha Berendji, the M&S retail, operations and property director, said: “Proposing to close stores is never easy, for our colleagues, customers or the local community, but it is vital for the future of M&S.”
City traders dig in for night of turmoil on Prime Minister Theresa May’s crunch Brexit vote. City traders were braced for a gruelling all-nighter today as they prepared for potential panic in the aftermath of the Brexit vote. Investors were poised for a turbulent night of trading and banks said they had no choice but to order staff to stay at their desks to advise worried clients. Experts said trading in sterling would be the most volatile, but shares, bonds and other indices were also under scrutiny in the wake of the historic vote on Theresa May’s withdrawal agreement from the EU. The beleaguered Prime Minister is facing the biggest Parliamentary defeat for a British government in almost a century. In Canary Wharf, JPMorgan, Citigroup and Barclays were among the major firms staffing for a night of turmoil with a similar picture across the Square Mile. One banker said: “Global events like tonight are real ‘where were you?’ moments. Banks have to step up and be there or clients will look elsewhere.”
Funerals firm sees surprise revival but outlook still looks grave. Undertaker Dignity rose from the grave on Tuesday after revealing a surprise rise in performance for the final quarter but repeated warnings 2019 would be tough. The firm, hit by a 60% share price drop, grew market share and said people had spent more than expected on funerals between September and December. Underlying operating profits are now expected to be £79 million, ahead of market expectations. Around 599,000 people died last year, in line with what the company expected. However, the bleaker outlook for 2019, which hammered the shares last year, remains the same as it seeks to defend market share by slashing basic prices to compete in a tough price war with The Co-op.
Flybe to stay in the air with fresh rescue funds. Struggling regional airline was given yet another lifeline on Tuesday, as white knights and Virgin Atlantic outlined a revised rescue deal. The buying consortium, which also includes investor Cyrus Capital Partners and is called Connect Airways, will pay £2.8 million for the main trading company Flybe and its digital arm. The funds will be on top of the 1p per share offer, which values the firm at £2.2 million, announced last Friday. The acquisition of the trading company follows Flybe’s announcement today it has failed to strike a deal with its banks which would have released a £20 million bridge loan from Connect Airways. Shares in Flybe nearly halved to 2.1p today.
Doorstep lender Provident Financial profit hit after relaxing payback demands. Doorstep lender got another “kick in the teeth” on Tuesday after profits were hit by an overhaul of credit card repayment plans for under-pressure customers. The company, led by former banker Malcolm Le May, said 2018 profits would be at the “lower end” of a £151 million to £166 million range due to higher impairments at Vanquis Bank, which offers credit cards to 1.8 million people with poor credit scores. Shares fell nearly 20% to 525p. The profit cut is the latest blow for the company, which suffered a string of profit warnings, regulatory investigations and the sudden death of executive chairman Manjit Wolstenholme last year.
Boohoo shrugs off rivals’ woes after Christmas discount battle. Online fashion retailer appeared immune to the problems enveloping some of its peers as it struck a bullish tone in hiking sales forecasts on Tuesday. The fast-fashion business, which also owns Pretty Little Thing and Nasty Gal, said sales will grow up to 45% this year, an increase on what the City had previously anticipated. Rival Asos warned on profits before Christmas, triggering fears that increased discounting and the wider retail struggles were spreading online. High Street names, including Moss Bros, have reported gloomy trading on a tough Christmas while New Look and Debenhams are shutting stores.
Persimmon fails to impress City. Housebuilder failed to convince a worried City on Tuesday despite raising its guidance on annual profits. Shares in the firm, whose performance last year was overshadowed by the row about departed chief executive Jeff Fairburn’s £100 million bonus, dipped 11.5p to 2217.5p even though 2018 profits will be “modestly ahead” of the £1.07 billion market consensus. Persimmon is more exposed to stronger performing northern markets, helping the UK’s biggest builder grow sales 3% to 16,449 in a climate of low unemployment and cheap mortgage deals. But interim boss, Dave Jenkinson, said the firm was “trading well” despite the housing market’s seasonal slowdown starting a couple of weeks earlier than usual. Sales of bigger homes have been a “little bit sticky” amid more caution from buyers as Brexit looms.
Estate agent Savills expects lower sales as Brexit and global slowdown fears take a toll on property investor confidence. expects lower property sales in a number of markets this year as Brexit-related uncertainty and US trade policy take a toll on property investors’ confidence. The upmarket estate agent, which has offices around the world, said prospects for 2019 are ‘overshadowed by macro-economic and political uncertainties’ globally. But the group, which also runs consultancy and property management businesses, said it still expects full-year results to be in line with expectations as these ‘less transactional’ divisions would offset a decline in sales volumes.
China cuts taxes to bolster economy. China has moved to quash market fears over its weakening economy by announcing measures to bolster growth and restore confidence. The world’s second largest economy will reduce value-added tax rates and hand out rebates in certain sectors to deal with a domestic slowdown. Chinese exports suffered their worst fall in two years in December, heightening concern over global growth. Leading stock indices and commodity prices retreated Asia, Europe and America yesterday after the poor December reading, which showed a 4.4% drop in China’s exports and a 7.6% slump in its imports. Confidence that the country will take action to revitalise its economy helped markets to recover this morning. The SSE Composite rose 1.4 per cent in Shanghai and the Hang Seng advanced 2% in Hong Kong.
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