Sales slump at Whitbread, footfall weaker for JD Sports
London open
The FTSE 100 is expected to open 40 points lower on Tuesday, having closed up 2.09% at 6,285.94 on Monday.
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UK first quarter like-for-like sales slumped at Premier Inn owner Whitbread reflecting the full impact of the coronavirus lockdown although it reported good summer demand for tourist destinations. Like-for-like sales for the three months to May 28 fell 79.8% across Whitbread’s British hotel and pub estate, while total group sales fell 79.4%. “It is still very early days and therefore too early to draw any conclusions from our booking trajectory, especially as there has been volatility in hotel performance in other countries that relaxed controls before the UK,” said chief executive Alison Brittain. “However, in traditional regional tourist destinations, we are seeing good demand for the summer months, whilst the rest of the regions and metropolitan areas, including London, remain subdued.”
JD Sports Fashion said footfall was weaker in stores reopened after lockdown and called for "rental realism" from landlords as the sportswear chain reported record profit for the year to the start of February. Pretax profit for the year ended on 1 February rose 3% to £348.5m as revenue rose 30% to £6.1bn.
Derwent London said on Tuesday that for the June quarter to date, it had received 75% of office rents and 70% of the portfolio's overall rent. The FTSE 250 company reported that, after adjusting for rents deferred or waived, it had now received 93% of the office rents and 90% of rents due. Additionally, for the March quarter, Derwent said that since it last reported on 8 April, the rents agreed to be paid later had been received in full, and so it now received 81% of March rents, with another 11% subject to agreed payment plans.
Newspaper round-up
An anti-gambling charity has called on banks to improve card blocking systems introduced to help those whose gambling is out of control after it emerged 40% of current accounts offer no help in this area. Research on behalf of GambleAware found that just eight financial companies offered customers the chance to block future payments to gambling sites. – Guardian
High street spending enjoyed a much-needed boost as lockdown eased on 4 July but hairdressers benefited more than pubs and restaurants, according to an early snapshot of consumer behaviour. As economists wait for hard data on the strength of consumer spending for this latest easing of lockdown restrictions, analysis of 3 million UK customers’ spending habits by the digital bank Revolut suggested that high-street spending on Saturday was double that of the previous weekend, despite only England relaxing lockdown restrictions, and ran at 86% of an average pre-Covid Saturday. – Guardian
Financial services firms suffered their sharpest ever downturn in the second quarter of the year as the pandemic piled pressure on jobs and profits. As many as 62pc of firms were hit by a slowdown, with just 10pc reporting an increase in volumes according to a survey by accountant PwC and the Confederation of British Industry. – Telegraph
Mastercard was warned about Wirecard’s links to an alleged laundering network in 2016, The Times can reveal. The payments group was handed details of Wirecard’s alleged links to a scheme that used bogus online stores to disguise the processing of high-risk payments, and Mastercard executives privately admitted to concerns about the scandal-hit company’s handling of high-risk transactions. – The Times
One of Germany’s biggest banks is considering closing nearly half its branches and shedding a quarter of its staff after its chairman and chief executive both quit in the face of rising shareholder pressure. Commerzbank is considering an aggressive cost-cutting programme at the instigation of Cerberus, its biggest corporate investor. Last week the New York-based private equity fund, which owns just over 5 per cent of the bank, attacked its “flawed and unambitious” strategy, prompting Martin Zielke, 57, its chief executive, and Stefan Schmittmann, 63, the chairman, to resign. – The Times
US close
Wall Street stocks recorded solid gains on Monday as major indices shook off concerns around a continued rise in new Covid-19 cases across the United States.
At the close, the Dow Jones Industrial Average was up 1.78% at 26,287.03, while the S&P 500 was 1.59% firmer at 3,179.72 and the Nasdaq Composite saw out the session 2.21% stronger at 10,433.65.
The Dow closed 459.67 points higher on Monday, extending gains recorded ahead of the Independence Day long weekend on Thursday.
Sentiment was boosted by a strong performance by Asian stocks overnight, with the Shanghai Composite surging 5.71% as the country carried on with its economic reopening despite the World Health Organisation reporting on Saturday that more than 200,000 new coronavirus cases had been reported globally in a 24-hour period - a fresh record.
On a regional level, the biggest spike was seen in the Americas, where nearly 130,000 new cases were confirmed - with Florida and Texas reporting record one-day increases of 11,445 and 8,258, respectively. In the US, 45,000 new cases were recorded on Saturday alone.