Sainsbury's signals fall in pre-tax profits, Halma performs in line in first half
London open
The FTSE 100 is expected to open 37 points lower on Wednesday, having closed down 0.47% at 7,291.43 on Tuesday.
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Supermarket group Sainsbury's said first-half pre-tax profits would fall by £50m due to the impact of unseasonal weather and higher marketing costs, but maintained its full year outlook. Second quarter total retail sales rose 0.1% excluding fuel, with like-for-like sales down 0.2% , excluding fuel. Grocery sales increased by 0.6%, general merchandise declined 2% and clothing increased by 3.3%. “While retail markets remain highly competitive and the consumer outlook remains uncertain, we remain on track to deliver full year 2019/20 underlying profit before tax in line with consensus expectations,” the company said in a statement on Wednesday.
Halma said its first half performance was in line with board expectations as order intake beat revenue and grew compared to the same period last year. The hazard detection specialist also confirmed organic constant currency revenue growth across all major regions, with particularly good UK and US growth as the weakness of sterling had a positive effect on results.
United Utilities updated the market on its trading on Wednesday, reporting that it was currently in line with its expectations for the six months ending 30 September. The FTSE 250 company said group revenue was expected to be higher in its interim results in November than for the first half of last year, largely reflecting its allowed regulatory revenue changes. It added that underlying operating profit for the first half was expected to be higher year-on-year, which it out down to the higher revenue and lower infrastructure renewals expenditure.
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Wrightbus, one of Northern Ireland’s largest employers with 1,400 staff, is expected to slump into administration tomorrow after failing to secure an eleventh-hour rescue deal. The move will represent the UK’s second largest insolvency of the week, following the liquidation of the holiday group, Thomas Cook. – Guardian
The chances of a repeat of the pre-Brexit deadline boost to manufacturing have diminished following a downbeat survey from the CBI showing the bleakest outlook for industry in more than a decade. The employers’ organisation said order books were shrinking and output was set to fall in the coming months amid Brexit uncertainty and global trade tensions. – Guardian
Neil Woodford’s embattled investment firm gave advice to a Treasury-backed panel that today will recommend that money from pension savers should be invested via open-ended funds to buy illiquid, unlisted stocks. The panel’s report says that many ordinary pension savers miss out because their money is not invested in venture capital and private equity and argues that young people today would be 7 per cent to 12 per cent better off in retirement if it were. - The Times
The parlous state of Thomas Cook’s finances before its collapse have been laid bare in court documents showing a balance sheet deficit of over £3 billion. In a High Court witness statement, Peter Fankhauser, its now former chief executive, lists liabilities including £1.9 billion of debt and guarantees to organisations such as the Civil Aviation Authority, bonding providers and payment service providers. – The Times
Remember the “deal dividend”? When former Chancellor Philip Hammond stood before the House of Commons to deliver his spring statement in March, he talked boldly of an “economic boost from recovery in business confidence and investment” if MPs backed Theresa May’s ill-fated deal. ‘Spreadsheet Phil’ also cast off his Eeyore image to pledge a fiscal boost as part of the dividend once the risk of a no-deal Brexit had been removed. - Telegraph
US close
Stocks in the US slid into the red by the close on Tuesday, despite opening strongly after Treasury Secretary Steven Mnuchin confirmed that trade talks between China and the US would resume next month.
The Dow Jones Industrial Average ended the day down 0.53% at 26,807.77, the S&P 500 fell 0.84% to 2,966.60, and the Nasdaq 100 was 1.39% weaker at 7,710.04.
Sentiment had received a boost early in the day, when Mnuchin assured Fox News that negotiators from Washington and Beijing had made progress during last week's deputy-level meetings.
Around the same time, Bloomberg reported that China had granted new waivers to several companies exempting them from tariffs on at least two million tons of US soybeans.
US President Donald Trump spoke in front of the United Nations late in the session, talking on what he called “unfair” trade, as well as defence spending and immigration in what was described as a subdued, scripted address.
“The future does not belong to globalists. The future belongs to patriots,” he said.
Trump did talk on Iran, calling on its leaders to focus on its own situation after what he called four decades of failure.