FTSE 100 Live: Inflation rate falls for second month in row, Burberry posts update

More signs that inflation has peaked emerged today after the Office for National Statistics recorded an annual rate of 10.5% for December.

The figure was in line with expectations and represented a further fall from the four-decade high of 11.1% seen in October. However, economists and the Bank of England will be concerned that core inflation came in slightly higher than expected at 6.3%.

On the corporate front, investors are this morning digesting trading updates from retailers including Burberry, WH Smith and Currys.

FTSE 100 Live Wednesday

• Inflation at 10.5% maintains rate rise pressure

• Burberry sales growth slows to 1%

• Currys shares surge on resilient UK trading

That’s all folks. Tomorrow: Boohoo, Dunelm & Hotel Chocolat

Wednesday 18 January 2023 17:58 , Simon Hunt

That concludes our liveblog coverage today, after the ONS recorded an annual inflation rate of 10.5% for December, in line with investor expectations.

The Evening Standard City Desk will be back at 7am tomorrow where we’ll have a smorgasbord of trading updates from Boohoo, Dunelm & Hotel Chocolat, shedding light on the peformance of various corners of the retail sector over the festive season.

Royal Mail starts moving export parcels following cyber incident

Wednesday 18 January 2023 17:07 , Simon Hunt

Royal mail has started moving “limited volumes” of export parcels following the recent cyber incident.

The company said it was trialling “operational workarounds” but continued to ask customers not to submit any new export parcels into the network.

A statement said: “Our initial focus will be to clear mail that has already been processed and is waiting to be despatched.

“We are pleased to announce that we have resumed the export of letters which do not require a customs declaration to all international destinations.

FTSE 100 closes down 20 points: Evening wrap

Wednesday 18 January 2023 16:47 , Simon Hunt

The FTSE 100 closed down 20 points to 7,830 at the end of the day’s trading session in London, its second consecutive fall this week after UK inflation data came in roughly as expected and failed to move investor sentiment.

BT Group had the largest drop today, falling 3.2%, while shares in spirits maker Diageo also fell 2.6%. Shares in mining and basic materials stocks bucked the downward trend, rising an average of 1.7%.

The pound made gains today, rallying almost a cent against the dollar to $1.2355 .

Microsoft to axe 10,000 jobs and close offices in bid to cut costs

Wednesday 18 January 2023 14:27 , Simon Hunt

Microsoft is to slash 10,000 jobs and close offices in a bid to cut costs.

The US tech giant said it was taking a $1.2B charge in Q2 related to severance costs, changes to hardware portfolio, and the cost of ‘lease consolidation’ as it sought to create higher density offices.

Staff being laid off have been promised above-market severance pay, continuing healthcare coverage for six months and 60 days’ notice prior to termination, regardless of whether such notice is legally required.

Microsoft CEO Satya Nadella said in a statement: “These decisions are difficult, but necessary. They are especially difficult because they impact people and people’s lives—our colleagues and friends.

“These are the kinds of hard choices we have made throughout our 47-year history to remain a consequential company in this industry that is unforgiving to anyone who doesn’t adapt to platform shifts.”

Spotify blasts “immeasurable” harm caused by Apple in letter to EU over competition concerns

Wednesday 18 January 2023 13:34 , Simon Hunt

Spotify has written to the European Union competition commissioner demanding urgent regulatory action against Apple on competition grounds.

The tech firm accused Apple of causing “immeasurable” harms to consumers and developers and of having made “capricious changes to terms and conditions” as a result of its “monopoly position.”

The letter, which was co-signed with a number of tech firms including email business Proton and music streaming service Deezer, said: “For years, Apple has imposed unfair restrictions on our businesses. These restrictions hamper our development and harm European consumers.

“Apple has and continues to defy every effort from courts and regulators to address these unfair practices. While Apple continues to reap unfair rewards, the harm to developers and, more importantly, to consumers is immeasurable.

Entain accelerates withdrawal from unregulated gambling markets

Wednesday 18 January 2023 12:44 , Simon Hunt

Gambling firm Entain said it is accelerating plans to withdraw from unregulated markets.

In 2020, the Group made a commitment that, by the end of 2023, 100% of the Group’s revenue would come from markets that are nationally regulated.

From today, the Group will accelerate this process by exiting its few remaining markets where there is no clear path to market liberalisation via domestic regulation.

Barry Gibson, Entain’s Chair, said the move “should be taken as a clear demonstration of Entain’s commitment to the highest standards of corporate responsibility, governance, sustainability, and player safety.

“We are proud to be leading our industry as the only global operator taking this approach of solely operating in markets where there is domestic licensing.”

Cazoo axes jobs and slashes sales targets as founder Alex Chesterman quits as CEO

Wednesday 18 January 2023 12:07 , Simon Hunt

British online car retailer Cazoo has begun a further round of staff layoffs and customer service centre closures after the firm said it expected a fall in sales of as much as 38%.

The New York-listed business, which sold around 65,000 cars in the UK in 2022, now said it expects to only sell between 40,000 and 50,000 vehicles in 2023 and will be making “further headcount reductions” in a bit to cut costs and get closer to reaching profitability.

CEO and founder Alex Chesterman said he will be stepping down from his role to become executive chairman, to be replaced by current chief operating officer Paul Whitehead.

Chesterman said he was “extremely mindful of the current economic environment and believe the right course of action for 2023 is to focus on further improving our unit economics, reducing our fixed cost base and maximising our cash runway.

“Our new 2023 plan, which includes more modest top line ambitions, ensures that we continue to improve our unit economics, reduces our fixed costs and conserves cash.”

Cazoo shares have fallen 93% over the past year, with the firm posting a £243 million loss in the first half of 2022.

Netflix offers up to $385,000 for private jet flight attendant role

Wednesday 18 January 2023 11:26 , Simon Hunt

Netflix is hiring a private jet flight attendant with a maximum salary of $385,000 (£312,273).

The role, advertised online by the streaming service, would be based in San Jose, California, close to the Netflix headquarters in Los Gatos.

Candidates would be expected to demonstrate “discretion and outstanding customer service skills necessary to provide a seamless experience” for passengers.

The attendant would also need to work with “little direction and a lot of self motivation”.

The job involves domestic and international travel, “often requiring weekend and holiday work days and extended travel periods”.

Blow for Amigo Loans as trial period falls short

Wednesday 18 January 2023 10:59 , Simon Hunt

Amigo Loans suffered at a blow today after the company admitted that its pilot scheme had failed to lend enough money to meet the requirements of the financial regulator, forcing it to extend the end date of the pilot

In a statement the company said: “During the pilot lending period Amigo has agreed with the Financial Conduct Authority ("FCA") certain volume limits.

“While demand from applicants has been strong, the volume of completed loans has not met the minimum lending volume that is needed to undertake meaningful outcomes testing.

“This has required the Company to extend the lending pilot period.”

Profits guidance boosts Just Eat shares, Ocado up 6%

Wednesday 18 January 2023 10:25 , Graeme Evans

Shares in food delivery app Just Eat Takeaway surged today, even though Christmas trading figures were short of City hopes.

Just Eat’s valuation jumped 14% and rival Deliveroo rose 6% as the Amsterdam-based company predicted a surge in underlying earnings to around 225 million (£197.5 million) for 2023.

This was much higher than City forecasts and came after founder and chief executive Jitse Groen recently switched Just Eat’s focus towards the bottom line amid a squeeze on order volumes from the cost of living crisis.

The company, which racked up a loss of 350 million euros (£308 million) in 2021, said it had traded profitably in the second half of 2022 and forecast an underlying surplus of 16 million euros (£14 million) across the year.

Its improved guidance came despite fourth quarter orders of 239.8 million, which analysts said came in 10 million short of hopes. Transaction value fell 2% on a year earlier in the three months, with UK and Ireland operations down 3% to 1.7 billion euros (£1.5 billion).

Despite the order softness, analysts at Jefferies called the scale of the 2023 profit guidance as “eye-catching” and said it included scope for growth investments.

Just Eat shares rose 291.5p to 2420.5p, while Deliveroo added 5.1p to 95.2p ahead of boss Will Shu issuing a trading update tomorrow.

Investors had other food-related stocks in their sights today after Greggs shares rose 40p to 2620p on the back of a big upgrade from analysts at Deutsche Bank. They said the high street company’s growth levers, conservative balance sheet and leadership under chief executive Roisin Currie justified a new price target of 2950p.

In the FTSE 100 index, grocery delivery firm Ocado led the way as shares recovered from yesterday’s slump by adding 6% or 47.2p to 780.2p.

Industrial conglomerate Smiths Group was next on the risers board as the company behind airport scanners upped guidance for 2023 results. It said: “While uncertainty remains high, and supply chain impacts persist, growth continues across all businesses.”

The shares rose 48p to 1729p as the FTSE 100 index climbed 13.3 points to 7864.36.

The UK-focused FTSE 250 index improved 53.41 points to 20,001.45, but TI Fluid Systems slumped 12% or 16.2p to 119.4p as the engineering firm highlighted the fourth quarter sales impact of production shutdowns in Covid-hit China.

Green energy boom boosts Currys

Wednesday 18 January 2023 09:56 , Simon English

THE trend for energy saving devices has boosted Currys, the electricals retailer that became the latest to show there is life on the high street yet.

Sales of air-fryers, microwaves and energy efficient washing machines are up sharply.

Chief executive Alex Baldock said: “People want to feel good about sustainability.”

Before Christmas Currys revealed that it was seen a sharp down in sales in the Nordic region – Norway, Sweden, Denmark and Finland – which is half of its business. In a trading update for the ten weeks to January 7 the company confirmed that situation has not improved with sales down 10%.

But the UK was much better, with sales down just 5%.

That relative strength means Currys is able to hold full-year profit guidance for the year of between £100 million and £125 million.

The City was relieved about that, sending the shares nearly 10% higher to 66p. That leaves the business valued at £738 million.

The figures today seem to be a vindication of Baldock’s “omni channel” strategy. He took a swipe at online-only rivals for “chasing unprofitable sales”.

Generally, retailers with both internet offerings and physical stores did well over Christmas as consumers looked to return to stores, in search of better service.

In the Nordics, analysts say rivals bought up too much stock before the pandemic and are now offloading it at unprofitable prices, squeezing Currys margins.

Baldock said: “Internationally, it remains tough and we continue to face into intense, but temporary, market pressures. We’re not simply waiting for the external environment to improve, of course. We’ve already reduced stock levels and stepped up our measures to increase margins and reduce costs.”

Vistry Group on track for profit target, as demand for affordable homes stays high

Wednesday 18 January 2023 09:15 , Joanna Bourke

Housebuilder Vistry Group today said its affordable housing and rental sector work has partly cushioned it from the wider property slowdown.

The FTSE 250 firm’s chief executive Greg Fitzgerald gave the update as Vistry said it is on track to meet adjusted pre-tax profit expectations of £418 million for 2022, up 21% from a year earlier.

Traditional housebuilders are grappling with a number of headwinds that could impact sales, including a sharp rise in mortgage costs. Last year political uncertainty also knocked sentiment.

Vistry is not immune to the challenges, with forward sales of private homes at £1 billion at the end of 2022, down from £1.3 billion.

But the group last year completed a £1.1 billion acquisition of Countryside Partnerships, which significantly increased its affordable homes division. It has seen a “sustained level of demand” from housing associations, local authorities and the private rental sector that want to work with Vistry.

Fitzgerald said: “The group’s forward sales position totals an encouraging £4.6 billion and we have a strong pipeline of new opportunities within partnerships.”

FTSE 100 edges higher, Currys jumps 4% in FTSE 250

Wednesday 18 January 2023 08:56 , Graeme Evans

The FTSE 100 index is 7.48 points higher at 7858.51, with British Airways owner IAG among the blue-chip stocks trading 2% higher.

British Land also rose 8.2p to 449.8p afterBank of America upgraded its price target on the property landlord from 400p to 470p.

Other risers included airport scanners business Smiths Group, which rallied 40.5p to 1721.5p after it upped guidance on 2023 results.

In a busy session for trading updates, Currys led the FTSE 250 index following robust trading in its UK and Ireland stores over Christmas. Shares rose 4% or 2.45p to 62.4p as Currys also forecast adjusted profits between £100 million and £125 million.

The FTSE 250 slipped 24.58 points to 19,923.46, with TI Fluid Systems the biggest faller as shares slumped 11% after a trading update.

Just Eat shares up 11% as profitability drive woos investors

Wednesday 18 January 2023 08:48 , Simon Hunt

Shares in Just Eat Takeaway rose 11% to 2,370p in opening trade this morning after the delivery firm’s pivot to profitability appears to have impressive investors.

The business’s fourth quarter earnings came in ahead of analyst expectations, with adjusted EBITDA rising from minus €134 million in the first six months of 2022 to approximately €150 million positive in the second half of the year.

But order volumes in the UK fell as much as 10% in the fourth quarter, while orders in Southern Europe, Australia and New Zealand plunged 21%.

Jitse Groen, CEO of Just Eat Takeaway.com said: “Our improved profitability and strong capital position strengthen our business for further growth and underpin our ability to both deliver on our Adjusted EBITDA targets and invest in food and nonfood adjacencies.”

Aldi boosts staff pay by 20% at warehouses

Wednesday 18 January 2023 08:33 , Simon Hunt

Staff at Aldi’s warehouses have seen their pay rise 20% in a year after the supermarket gave workers another boost to their wages.

The German-headquartered business will give its 7,000 of its warehouse staff a new minimum rate of £13.18 per hour from February, the third rise since the beginning of last year, when rates stood at £11.48.

It comes after Aldi’s recent pay review for Store Assistants which saw the firm offer starting pay of £11.00 an hour nationally, rising to £11.90, and £12.45 rising to £12.75, within the M25.

Giles Hurley, boss of Aldi UK and Ireland, said: “Just as we promise our customers that we will do all we can to support them, we are equally committed to supporting our amazing Aldi colleagues – as we remain the highest-paying supermarket in the UK.

FTSE 100 opens higher

Wednesday 18 January 2023 08:07 , Simon Hunt

The FTSE 100 is up 4 points to 7,855 in the opening minutes of trade as it hovers near a record high. Here’s a look at the biggest opening moves.

• Shares in Smiths Group PLC climbed the most, up 2.26% to 1719p.

• Shares in International Consolidated Airlines Group SA were up 2.14% to 160.3p.

• Shares in InterContinental Hotels Group PLC were up 2.05% to 5572p.

• Shares in GSK plc fell the most. They were down -1.2% to 1420.6p.

• Shares in SEGRO PLC dropped -1.11% to 840.6p.

• Shares in Barratt Developments P L C were down -1.09% to 452.7p.

Australian lasers and US robot fighting vehicles help Qinetiq pass £1 billion in orders

Wednesday 18 January 2023 07:57 , Graeme Evans

FTSE 250 defence contractor Qinetiq said orders for its current financial year passed £1 billion in its third quarter, helped by the delivery of robotic combat vehicles to the US military.

The Farnborough-based company supplies the light vehicles to the US army and is currently testing four prototypes them with soldiers ahead of the next stage of supplies of them in 2024.

It also signed am £80 million, 10-year contract with the Ministry of Defence in the UK covering mission data services and a multi-million pound contract with Australia to develop a high energy laser weapon system.

Qinetiq said it was on course to to meet expectations for the full year.

FTSE 100 seen lower amid Wall Street pressure

Wednesday 18 January 2023 07:55 , Graeme Evans

The FTSE 100 index fell 0.1% and the UK-focused FTSE 250 index dropped 0.7% after yesterday’s jobs market figures fuelled expectations that the Bank of England will increase interest rates by 0.5% at its February meeting.

Traders expect another subdued session today, with CMC Markets forecasting the FTSE 100 index will open 10 points lower at 7841.

The downbeat mood reflects last night’s weaker session for US markets after a disappointing earnings performance by Goldman Sachs extended the mixed start to the fourth quarter results season.

The Dow Jones Industrial Average lost more than 1% and the S&P 500 fell 0.2%, but the Nasdaq was slightly higher after a 7% jump for Tesla shares.

In Asia, Japan’s Nikkei index jumped 2.5% after the country’s central bank maintained its short-term interest rate at minus 0.1% and defied expectations that it would abandon its yield control curve. However, the outcome caused the yen to slump 2.5% against the US dollar in its biggest one-day drop since March 2020.

Burberry sales slow, hit by Covid-19 related disruption in China

Wednesday 18 January 2023 07:51 , Joanna Bourke

British luxury goods firm Burberry today said third quarter sales had slowed to 1%, as Covid-19 related disruption in China impacted the business.

The FTSE 100 fashion brand, known for its trench coats, reported comparable sales increased 1% in the three months to December, down from 7% growth a year earlier.

Chief executive Jonathan Akeroyd said: “Overall, we are pleased with our performance in the third quarter as double-digit revenue growth outside of Mainland China offset the impact of Covid 19-related disruption there. Europe in particular continued to perform well, driven by strong trading over the festive period, and leather goods delivered another quarter of double-digit growth globally.”

He added: “We remain confident in our ability to reach our medium-term targets, despite the current macro-economic environment.”

Total retail revenue was £756 million up from £723 million.

Akeroyd joined the company in April 2022 and is aiming to increase annual revenues to £5 billion, with plans such as increasing sales of higher-margin handbags, shoes and other accessories. In the year to April 2022 it recorded sales of £2.8 billion.

Pearson eyes further cost savings as adjusted profit beats forecasts

Wednesday 18 January 2023 07:31 , Michael Hunter

Pearson, the FTSE 100 education company, pointed to further cost savings in 2023, as it reported an 11% rise in adjusted operating profit of £455 million, ahead of expectations.

It said it was on track to deliver around £120 million of “cost efficiencies” in 2023, mainly from its Higher Education unit, with £20 million intended to offset “ongoing inflationary pressure”. It said the one-off costs relating to the changes would be excluded from its adjusted operating profit, would reach around £150 million, “reflecting increased level of savings and movements in FX”.

The textbook publisher and educational services company was at the centre of controversy in August when results of its BTEC courses were delayed. It said today that sales at its Workforce Skills unit, home to BTEC, rose 7% for the year.

Its trading update excluded sales from businesses that the company is selling, which fell 16%. They include publishing businesses in Europe, French speaking Canada, Hong Kong and South Africa.

WH Smith sales soar as retailer ramps up expansion plans

Wednesday 18 January 2023 07:29 , Simon Hunt

Newsagents WH Smith boasted of being in its “strongest ever position” today as it reported soaring sales and ramped up expansion plans.

The firm saw revenues leap 40% in the 20 weeks to mid-January, as a 77% uptick at its stores in airports and train stations helped offset a 2% fall in sales on the high street.

The firm has plans for a further 130 new stores worldwide, including at Reagan National airport in Washington and Palm Springs airport in the US.

WH Smith boss Carl Cowling said: “The Group is in its strongest ever position as a global travel retailer.

“This strength, combined with the ongoing improvement in passenger numbers across the globe, means that we are confident of another year of significant growth in 2023.”

Double-digit inflation maintains rates rise pressure

Wednesday 18 January 2023 07:29 , Graeme Evans

Today’s inflation rate of 10.5% and higher-than-expected growth in core prices of 6.3% increase the chances of another big interest rate rise by the Bank of England.

The Bank’s base rate currently stands at 3.5%, with another 0.5% rise on the table when policymakers meet next month.

The case for a further outsized increase in borrowing costs built yesterday after figures showed a tighter-than-expected labour market, with today’s inflation update doing little to ease fears about lingering price pressures.

The Office for National Statistics said that prices at petrol forecourts fell notably in December and that the cost of clothing also eased, but this was offset by increases for air fares and food prices.

The consumer price index peaked at 11.1% in October before falling to 10.7% in November and 10.5% today. The retail price index stood at 13.4%, down from 14% previously.