First quarter sales rise for Sainsbury's, SSP Group to slash up to 5,000 jobs

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The FTSE 100 is expected to open 24 points lower on Wednesday, having closed down 0.9% at 6,169.74 on Tuesday.

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Supermarket chain Sainsbury’s reported an 8.2% rise in first quarter like-for-like sales driven by groceries as Britons stocked up during the coronavirus lockdown. Online sales doubled during the period as customers shifted to home deliveries, but the company added that it expected a £500m hit to profits from Covid-19 “broadly offset by business rates relief and stronger grocery sales”.

Travel food operator SSP Group said it was looking to slash 5,000 jobs in the UK as it dealt with the collapse in air travel due to the Covid-19 pandemic. The company, which operates outlets at airports and train stations, said it expected only 20% of stores to be open by the autumn. “At this stage, we have not commenced restructuring of a material scale in any other geographies due to our expectations of a more rapid recovery, the longer durations of furlough support or our contractual lay-off arrangements,” SSP said on Wednesday.

Smith & Nephew said on Wednesday that it expects a second quarter underlying revenue decline of around 29%. The FTSE 100 medical technology company said that was in line with its previously-published outlook for underlying revenue for the quarter, which it said would be “substantially down” year-on-year, as its major markets were impacted by the Covid-19 pandemic. It said it was “encouraged” by the improving performance as the quarter progressed, with underlying revenue declines of 47% in April, 27% in May, and around 12% in June.

Newspaper round-up

Britain and Brussels have each accused the other of holding up a decision on the City of London’s ability to do business in EU markets from next year, prolonging the financial services’ state of uncertainty about the future. Both parties had agreed to complete assessments of the other’s regulatory regimes for financial services by Tuesday 30 June, with the expectation that they would be deemed “equivalent”, allowing business to continue in the new year. - Guardian

Tesla investors are being urged to vote to remove Elon Musk, the electric vehicle company’s founder and chief executive, from the board of the firm as anger mounts over his bonus deal that could pay him a record $55.8bn (£40bn). Pirc, an influential adviser to shareholders, including the UK’s local authority pension funds, on Tuesday recommended that investors voted against Tesla’s executive pay deal because it “unfairly enriches the chief executive”. – Guardian

TM Lewin stores will disappear from the high street after it became the latest retailer to collapse into administration at the cost of 600 jobs. The shirt-maker’s assets have been bought back by its owner Torque Brands, an investment vehicle for private equity firm Stonebridge, previously SCP, through a pre-pack deal - but not its 66 shops, The Telegraph can reveal. – Telegraph

Senior Wirecard employees were linked to an opaque network of British companies associated with alleged money laundering. Staff from the scandal-hit German payment processor were shareholders in a company creation operation in the northeast of England that was shut down after a government investigation. – The Times

Crispin Odey is preparing to sue Germany’s financial regulator for millions of pounds worth of lost profit after it banned the short selling of Wirecard shares for two months last year. Mr Odey has made about £25m from short-selling shares in Wirecard, the German payments company which filed for insolvency last week and is now the subject of multiple investigations around the world. – The Times

US close

Wall Street stocks closed in positive territory on Tuesday - the final day of trading for June and the second quarter.

The Dow Jones Industrial Average ended the session up 0.85% at 25,812.88, the S&P 500 added 1.54% to 3,100.29, and the Nasdaq Composite was 1.87% firmer at 10,068.77.

It was a green session entirely for the Dow, which had opened 15.96 points higher, carrying on from Monday’s gains that came despite a spike in new coronavirus cases in certain US states over the weekend.

Investors were focussed on testimony from Federal Reserve chair Jerome Powell and Treasury secretary Steven Mnuchin in front of the House Financial Services Committee during the afternoon.

In prepared remarks for his testimony, Powell told the committee that the US economic outlook would remain uncertain for some time as a result of the Covid-19 pandemic.