10th Dec 2020 11:25
(Alliance News) - The following is a summary of top news stories Thursday.
----------
COMPANIES
----------
Ocado Group said that joint venture Ocado Retail saw "exceptional" demand in the fourth quarter of its financial year, leading to a 35% rise in revenue. Ocado Retail is an equal joint venture between Hatfield, Hertfordshire-based Ocado Group and London-based food, clothing and homewares retailer Marks & Spencer Group. In the 13 weeks to November 29, Ocado Retail reported revenue of GBP579.6 million, up 35% from the prior year's GBP429.7 million. Average orders per week increased 3.0% to 360,000 from 350,000. Of this, 130,000 orders per week were filled by the relatively new Erith customer fulfilment centre. Average order size was GBP133. Ocado said customers are buying the full M&S range, with the biggest sellers coming from everyday essentials in the M&S fresh categories.
----------
DS Smith reported a steep profit decline in the first half of its financial year, though resumed dividends given the resilience of its performance in a challenging environment. For the six months ended October 31, the FTSE 100 packaging firm's pretax profit plunged 54% to GBP97 million from GBP213 million with revenue down 9.4% at GBP2.89 billion from GBP3.19 billion a year before. London-headquartered DS Smith said that, over the half-year period, there was an initial further reduction in paper prices as European corrugated demand fell during lockdowns and a temporary but sharp peak in old corrugated cases prices. This combined with other Covid-19 costs to hurt margins in the first quarter. However, old corrugated cases prices mostly normalised toward the end of the second quarter and European paper prices are higher amid strong domestic demand. DS resumed dividend payments, declaring an interim payout of 4.0 pence after nothing the year before.
----------
BT Group said it has agreed to sell two of its business units in Italy to Telecom Italia Spa as part of BT's Global unit transformation. London-based FTSE 100 telecommunications firm BT is selling its public administration business unit, which provides communication services for national government ministries and agencies in Italy as well as regional and local governments. BT is also selling its small and medium enterprises unit, which offers cloud services and connectivity throughout Italy. The agreement includes customer support for this unit, delivered via BT's Palermo contact centre. The sale, which is subject to regulatory clearance and trade union consultations, is set to complete by the end of the first quarter of 2021.
----------
Rio Tinto declared a maiden ore reserve and an updated mineral resource at the Jadar lithium-borates project in Serbia. The Anglo-Australian miner said the ore reserve is 16.6 million tonnes at 1.81% lithium oxide and 13.4% boron oxide. The mineral resource comprises 55.2 million tonnes of indicated resource at 1.68% lithium oxide and 17.9% boron oxide, with an additional 84.1 million tonnes of inferred resource at 1.84% lithium oxide and 12.6% boron oxide. Rio Tinto said the maiden ore reserve "represents a significant investment for Serbia with both direct and indirect economic benefits, and would become the country's second largest exporter." Pre-feasibility studies undertaken by Rio Tinto have shown that the Jadar project has the potential to produce both battery grade lithium carbonate and boric acid. The study is expected to be completed at the end of 2021 and if approved, construction could take up to four years.
----------
Frasers Group reported interim profit growth despite the retailer seeing revenue fall as it was forced to temporarily close its stores throughout the period. For the 26 weeks to October 25, Frasers recorded pretax profit of GBP106.1 million, up 18% from GBP90.2 million the year before. Group revenue slipped 7.4% year on year to GBP1.89 billion from GBP2.04 billion. Frasers blamed the drop in revenue on the pandemic forcing national lockdowns across the globe, resulting in the temporary closure of its stores. UK Sports Retail revenue dropped 9.8% to GBP1.07 billion, European Retail was down 3.7% to GBP352.0 million and Rest of World Retail revenue dropped 16% to GBP77.1 million. Wholesale & Licensing revenue fell 22% to GBP72.2 million. Partially offsetting this, Premium Lifestyle revenue grew 4.8% to GBP320.4 million. The retailer did not declare an interim dividend, unchanged on the year before.
----------
Tui said coronavirus badly hurt operations in its most recently ended financial year, and it expects to operate at sharply reduced capacity well into the year ahead. The Anglo-German holiday operator said revenue for the financial year to the end of September declined by 58% to EUR7.95 billion from EUR18.93 billion, resulting in a pretax loss of EUR3.13 billion versus EUR691 million in earnings a year ago. Tui declared no dividend, having distributed EUR0.54 a share a year prior. The company said that the first half of the financial year opened with record bookings in January, a strong outlook, and increased capacity planned for summer. However, the Covid-19 pandemic led to the suspension of operations in March, scuppering most of the company's financial second half.
----------
MARKETS
----------
London shares were mixed with the internationally exposed FTSE 100 index benefitting from weakness in the pound, which fell on no-deal Brexit fears. DS Smith was the best blue-chip performer, up 3.3%. The euro was higher ahead of the European Central Bank's interest rate decision in the afternoon. US futures were pointed to open flat to higher.
----------
FTSE 100: up 0.5% at 6,596.50
FTSE 250: down 0.5% at 19,787.31
AIM ALL-SHARE: down 0.4% at 1,070.24
GBP: down at USD1.3303 (USD1.3382)
EUR: up at USD1.2097 (USD1.2080)
GOLD: down at USD1,835.78 per ounce (USD1,849.10)
OIL (Brent): up at USD49.58 a barrel (USD48.72)
(changes since previous London equities close)
----------
ECONOMICS AND GENERAL
----------
Analysts were pessimistic over the UK economy's prospects in the fourth quarter as the country's recovery stalled in October, amid fears that a no-deal Brexit at the end of the year could derail any economic progress made in the final three months. UK economic growth lost momentum in October against a backdrop of rising coronavirus cases, the Office for National Statistics said. On a monthly basis, the UK gross domestic product grew 0.4% in October, slowing sharply from 1.1% growth in September. The reading was in line with economist expectations. The latest figure showed UK GDP expanded for the sixth month in a row but remained 7.9% smaller than its February pre-pandemic size, the ONS said.
----------
Talks on a post-Brexit trade deal are unlikely to be extended beyond Sunday unless the EU drops some of its key demands, UK Foreign Secretary Dominic Raab said. UK Prime Minister Boris Johnson and European Commission President Ursula von der Leyen agreed that a decision on the future of the negotiations will be taken by the end of the weekend. With the prospect of a no-deal outcome, Brussels has stepped up its preparations and held out the prospect of emergency agreements aimed at keeping planes flying and lorries crossing to the continent. One of the contingency measures proposed by von der Leyen is for EU fishing boats to continue to enjoy access to UK waters during 2021, an area which has been one of the main sticking points in the trade negotiations. Following Wednesday night's meeting between the prime minister and von der Leyen, Raab told the BBC on Thursday that, while he could not rule out a further extension in the talks process, it was important to have "finality".
----------
Britain on Thursday signed a free-trade deal with Singapore, giving it a key foothold in Asia as it seeks to forge its own path after leaving the EU, while talks on a post-Brexit deal stumble. The agreement largely replicates an existing EU-Singapore agreement, with the city-state's trade ministry saying it will cover more than GBP17 billion - around USD22 billion - in trade. It removes tariffs, gives both countries access to each other's markets in services and cuts non-tariff barriers in electronics, cars and vehicle parts, pharmaceutical products, medical devices and renewable energy generation, the ministry said. Duties will be eliminated by November 2024, the same timeline as the pact between the EU and Singapore, a former British colony that maintains close links with London.
----------
In a likely last face-to-face meeting of the year, the EU heads of states and governments will convene in Brussels on Thursday and Friday to patch over internal disagreements and put a united front towards external challenges. One big hurdle to clear is the EUR1.8 trillion recovery and budget package, which Hungary and Poland have been blocking over a separate rule-of-law tool. While it looked on Wednesday like they were dropping their resistance to a rule-of-law mechanism they strongly oppose, the issue is politically sensitive and not an easy pass. Sanctions against Turkey over controversial Mediterranean seismic exploration are also expected to be discussed. European Council President Charles Michel expressed optimism ahead of the talks. "I am confident that we can find an agreement on a common package to allow for the swift implementation of both the Multiannual Financial Framework and the recovery fund," he wrote in an invitation letter to the leaders on Wednesday.
----------
China on Thursday said it had imposed fresh import duties on Australian wine as it accused Canberra of giving firms subsidies, in the latest salvo in a bitter stand-off following last month's swingeing anti-dumping tariffs. The move comes as relations between both countries continue to sour after Australia called earlier this year for an inquiry into the origins of the Covid-19 outbreak, which emerged in China. The anti-subsidy tariffs of 6.3% to 6.4% will kick in on Friday and come on top of November's anti-dumping levies of 107% to 212%. China's commerce ministry said the move followed a probe announced in late August. "The investigation authority has preliminarily determined that there are subsidies for imported wines originating in Australia, and China's domestic wine industry has suffered substantive damage," the ministry said as it complained Australian winemakers benefit from government subsidies that give them an advantage over Chinese firms. But Australia's trade minister called last month's measures "grossly unfair, unwarranted, unjustified".
----------
Copyright 2020 Alliance News Limited. All Rights Reserved.
Related Shares:
Ocado