Marshalls lifts expectations for 2021, Burberry profits plunge in first half
London open
The FTSE 100 is expected to open 55 points lower on Thursday, having closed up 1.35% on Wednesday, at 6,382.10.
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Landscaping products specialist Marshalls said it was lifting 2021 expectations as like-for-like sales rose in October. The company on Thursday said sales last month rose 5% and in the four months to October 31 had returned to the same level as 2019 on a like for like basis, driven by continued strong demand in the domestic end market, a return to more normal levels of public sector and commercial trade and strong growth in the international sector. “Trading continues to improve and order books are robust,” the company said.
Burberry said revenue would be affected by fewer markdowns as the luxury brand reported a 75% drop in first-half profit driven by the Covid-19 crisis. Adjusted operating profit for the six months to 26 September fell to £51m from £203m a year earlier as revenue declined to £878m from £1.28bn. Excluding currency movements profit fell 71%. Burberry said business improved in the second quarter as stores reopened from Covid-19 lockdowns and that comparable store sales returned to growth in October. The company said it had reduced markdowns to support the brand long term and that this would be a "revenue headwind" in the second half.
National Grid reported a 12% fall in underlying operating profit in its first half on Thursday, to £1.1bn, while its underlying earnings per share were down 14% to 17.2p. The FTSE 100 company said that reflected higher Covid-19 costs including US bad debts, and storm costs, partly offset by improved UK gas transmission and US revenues. It declared an interim dividend of 17p per share, in line with its policy and up from 16.57p per share.
Newspaper round-up
Britain is “sleepwalking into a debt crisis” after a steep rise in emergency borrowing by low- and middle-income households to cope with the Covid-19 jobs crisis. Research by the debt charity Stepchange found that household borrowing and arrears linked to the coronavirus pandemic have soared 66% since May to £10.3bn. The number of people who are in severe debt has risen to 1.2 million – nearly doubling since March – with a further 3 million people at risk of falling into arrears after taking on extra short-term loans. - Guardian
Pfizer’s chief executive sold shares in the company worth $5.6m (£4.2m) on the day the drugmaker announced that its Covid-19 vaccine was more than 90% effective in protecting people from transmission of the virus, triggering a surge in the company’s stock. Albert Bourla sold 132,508 shares at $41.94 a share, equivalent to 62% of his shareholding in Pfizer, according to filings with the US Securities and Exchange Commission (SEC). This is close to the $41.99 peak the share price hit on Monday. - Guardian
Retailers are bracing for December chaos as supply chain mayhem threatens to deprive millions of families of their presents and wreck hopes of a profitable Christmas. A brutal mix of lockdown measures, staff absences and fearful customers are in danger of derailing the crucial festive season even when non-essential shops are able to reopen next month, experts warned. - Telegraph
Codemasters is facing a backlash from investors over the proposed £726 million sale of the computer game developer to an American rival. Some shareholders are unhappy with the small premium that Take-Two Interactive Software is offering to buy the London-listed developer of racing games, while the big stock component of the cash-and-shares deal also has drawn criticism. - The Times
Large numbers of migrants left Britain during the pandemic, causing the number of foreign-born workers in the country to fall by more than 700,000. Official figures from the Office for National Statistics show that there were 5.1 million workers born outside of the UK between July and September, down from 5.9 million between January and March. - The Times
US close
Wall Street trading finished in a mixed state on Wednesday, as market participants snapped up technology stocks that were battered earlier in the week.
At the close, the Dow Jones Industrial Average was down 0.08% at 29,397.63, while the S&P 500 added 0.77% to 3,572.66, and the Nasdaq Composite was 2.01% firmer at 11,786.43.
The Dow closed 23.29 points lower on Wednesday, despite investors remaining optimistic around a potential return to normal economic activity as a result of Pfizer and BioNTech's Covid-19 vaccine candidate.
On the coronavirus front, the US once again beat its prior day record for new daily Covid-19 cases, with the seven-day average hitting 108,964, according to Johns Hopkins University.
That made for a 37% increase week-on-week.