Sainsbury's chief to retire in July, Sage sees good revenue growth in first quarter

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The FTSE 100 is expected to open 23 points higher on Wednesday, having closed down 0.53% at 7,610.70 on Tuesday.

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Supermarket chain Sainsbury's said chief executive Mike Coupe had confirmed his intention to retire in July to be replaced by the company's retail and operations director Simon Roberts. Coupe, who has been chief executive for six years, will step down from the role at the end of May and leave the board on July 2 at the company's annual shareholder meeting, Sainsbury's said in a statement on Wednesday.

Software Group Sage said first quarter recurring revenue increased 10.7% year on year to £410m, underpinned by software subscription growth of 24.8% to £286m as it continued to focus on migrating existing customers and attracting new customers to subscription and the cloud. Recurring revenue growth was driven principally by North America and Northern Europe (UK & Ireland), with strong momentum from 2019 carried forward into the first quarter. In North America, recurring revenue grew by 11.8% to £154m. Northern Europe continued to grow strongly with recurring revenue growth of 15.1% to £93m, benefiting from strong growth in the second half of fiscal 2019 as well as new Sage 50 cloud connected contracts added in the quarter.

WH Smith reported a “good performance” for the 20 weeks ended 18 January on Wednesday, with total revenue up 7% and like-for-like revenue down 1%. The FTSE 250 company said that in travel, total revenue was up 19%, with like-for-like revenue up 3%. In its high street business, the firm said its strategy of actively managing its space, gross margin growth and good cost control was still delivering sustainable profit and “good” cash generation, with total revenue there down 5% and like-for-like revenue also down 5%.

Newspaper round-up

The government is holding talks with the Turkish conglomerate Cengiz Holdings about stepping in to buy British Steel in the event that a planned sale to the Chinese industrial firm Jingye falls through. Officials remain confident that Jingye’s £50m purchase of British Steel, including the Scunthorpe steelworks, will go ahead in the next few weeks, saving about 4,000 jobs in the ailing industry. – Guardian

More than 40 Conservative MPs have written to the prime minister to urge him not to cancel HS2, exposing deep divisions within the party over the future of the new railway line from London to the north of England. At least 30 MPs, including former international development secretary Andrew Mitchell, signed a joint letter on Tuesday night that calls on Boris Johnson to deliver the “long overdue” rail line in full, despite costs apparently spiralling to £106bn, arguing it will be a “key engine for growth that we must not waver from”. - Guardian

Boeing has been forced to halt trading in its shares as the commercial aerospace titan warned of yet another delay to its grounded 737 MAX fleet. The world’s largest planemaker admitted that the Max will not be certified to fly until at least mid-2020, months later than previously expected, as it awaits the green light from the Federal Aviation Administration (FAA) and other global regulators. – Telegraph

Mark Barnett faces growing pressure after it emerged that investors pulled more than £1 billion from the Invesco stockpicker’s funds during the final quarter of last year amid mounting unease about his strategy. The withdrawals mean that the former protégé of Neil Woodford, the fallen fund manager, suffered his worst quarter for redemptions since the three months that ended in September 2014, according to data from Morningstar. – The Times

Boris Johnson’s “levelling up” agenda has received a boost from Goldman Sachs, which is looking for a new office outside London to create a technology hub. The American investment bank has appointed the property agency JLL to find about 60,000sq ft of space to accommodate the new department in a regional city. The search was first reported by React News, a property website. – The Times

US close

Wall Street trading finished in the red on Tuesday, as traders returned from the Martin Luther King Jr Day holiday to concerns over a new deadly virus outbreak in China.

The Dow Jones Industrial Average ended the session down 0.52% at 29,196.04, the S&P 500 lost 0.27% to 3,320.79, and the Nasdaq Composite was 0.19% lower at 9,370.81.

At the open, the Dow was 79.81 points lower after closing in the green on Friday, on the back of some economic data out of China and a strong start to the earnings season.

An outbreak of the new coronavirus in China had already killed six people ahead of the Lunar New Year holiday - a time when hundreds of millions of people were set to travel - and was confirmed as being contagious by Chinese authorities the day before.

Many analysts expected an economic reaction similar to when the deadly severe acute respiratory syndrome (SARS) crisis took place in 2003, with investors fleeing from risk assets in Asia overnight.