Ferguson revenue slides, TUI to slash up to 8,000 jobs
London open
The FTSE 100 is expected to open 64 points lower on Wednesday, having closed up 0.93% at 5,994.77 on Tuesday.
Stocks to watch
House builder Taylor Wimpey said it would reopen sales offices and show homes from May 22, initially for pre-booked appointments and with social distancing measures in place as the government's easing of coronavirus lockdown measures eased. The company on Wednesday said sales rates have remained stable with signs of increased activity and customer interest over the last week.
Ferguson's revenue dropped by more than 15% in April as the Covid-19 crisis hit sales across the plumbing and heating company's business. Revenue fell 2.2% in Ferguson's third quarter, the company said in a trading update. After registering growth of 5.1% in the first two months of the period revenue fell 15.3% in April. In the US Ferguson swung from 9.3% growth in March and April to a 9.3% revenue decline in April. In Canada revenue shrank 7.7% in the first two months of the quarter and by a third in April. The biggest drop-off in business was in the UK where Ferguson is planning to split off its Wolseley business. After falling 10.3% in February and March UK revenue plunged by 60% in April, leading to a 26.5% drop for the quarter.
Holiday operator TUI said it would cut up to 8,000 jobs globally as it called the Covid-19 pandemic the “unquestionably the greatest crisis” the industry has ever faced. The UK’s biggest tour operator posted a wider first half loss of €845.8m compared to €289.1m a year ago. “We are targeting to permanently reduce our overhead cost base by 30% across the entire group. This will have an impact on potentially 8,000 roles globally that will either not be recruited or reduced,” The Anglo-German company said.
Newspaper round-up
Britain’s retailers have warned of the mounting risk of shop closures and job losses across the country after consumer spending plunged to record lows in April since comparable records began as the coronavirus lockdown took hold. Reflecting the impact of lockdown measures across the country, the British Retail Consortium said sales fell 19.1% last month compared with April last year, in the steepest drop since the trade body for high street and online shops started recording sales in January 1995. - Guardian
Cruise company Carnival, which operates the P&O and Cunard lines, is understood to be planning to cut about 450 jobs at its UK arm, equal to more than one in four of its workforce. The world’s largest cruise company employs about 1,600 people at its UK headquarters in Southampton. None of its ships have sailed since March. Workers who keep their jobs will be asked to accept a 20% pay cut until November. – Guardian
The housing market has been given the green light to reopen after the Government announced it would lift the ban on property viewings and valuations taking place. From Wednesday, people will be allowed to travel to visit estate agents, letting agents or show homes, keeping in line with social distancing guidelines. House buyers will also be permitted to view residential properties they wish to buy or rent. – Telegraph
One in three companies that have temporarily shut during the lockdown fear that they may never reopen, according to a survey of thousands of small businesses by Britain’s largest employers’ group. In findings that underscore the challenge that faces the government as it weans businesses off emergency support packages, one in three small employers said that they were considering or had made redundancies. – The Times
Sainsbury’s has handed almost £2 million in bonus shares to its senior executive team less than a fortnight after deferring its final dividend. Mike Coupe, departing chief executive, and Simon Roberts, his successor, are among nine senior staff who recently received nearly 950,000 shares in the grocery chain. – The Times
US close
Stocks on Wall Street finished sharply lower on Tuesday, with the Dow booking its biggest one-day slump since the start of May, as market participants continued to monitor the White House's efforts to reopen the economy.
The Dow Jones Industrial Average ended the session down 1.89% at 23,764.78, the S&P 500 was down 2.05% at 2,870.12, and the Nasdaq Composite lost 2.06% to close at 9,002.55.
At the open, the Dow was 77.50 points higher, reversing some of the losses recorded in the previous session, but ended the day 457 below the waterline as investor consternation around the speed at which the White House wanted to reopen the economy continued.
National Institute of Allergy and Infectious Diseases director Dr Anthony Fauci told the Senate health committee during the afternoon that the US would face “needless suffering and death” if it reopened too soon, as the Covid-19 coronavirus pandemic continued to rage globally.
Although the World Health Organization revealed that multiple countries that have relaxed coronavirus restrictions, including China, had seen increases in the number of positive Covid-19 cases, New York Governor Andrew Cuomo said late on Monday that the state's restrictions on certain low-risk businesses and activities would be lifted on Friday.