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 Dignity (DTY) 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.
Doorstep lender Provident Financial profit hit after relaxing payback demands. Doorstep lender Provident Financial (PFG) 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.
Flybe to stay in the air with fresh rescue funds. Struggling regional airline Flybe Group (FLYB) was given yet another lifeline on Tuesday, as white knights Stobart Group Ltd. (STOB) 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.
M&S reveals names of next store closures. Marks & Spencer Group (MKS) on Tuesday revealed where the next 17 store closures will be, putting 1,000 jobs at risk. The retailer, whose sales have been suffering as cheaper rivals have piled on the pressure and shoppers have migrated online, is planning to shut 100 stores by 2020. So far, over 80% of the 1891 staff impacted by the closures have moved to new roles, but 300 have lost their jobs. Chief executive Steve Rowe added in November: “I’m saying that this will continue. I won’t pause at a hundred [stores] and say that’s job done. We must learn the lesson of the past. We need the right stores, in the right sizes, in the right places.”
Boohoo shrugs off rivals’ woes after Christmas discount battle. Online fashion retailer Boohoo.com (BOO) 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 Persimmon (PSN) 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.
Law firm Knights Group Holdings plc (KGH) has clocked up a 5p rise to 210p after buying employment law specialist Cummins Solicitors for £1.5 million. Founded in 2010, Cummins posted revenues of £784,000 and earnings of £175,000 for this year. In October Knights bought Leicester law firm Spearing Waite. Knights, which listed last June, also said revenue in the six months to October 31 rose 36.6% from £17.5 million to £23.9 million.
