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FTSE 100 Live: John Lewis reports £99m loss, Shell boss to step down

·11-min read
 (Evening Standard)
(Evening Standard)

John Lewis Partnership has reported a half-year loss of £99 million and described the outlook for the rest of the year as “highly uncertain”.

The department stores and Waitrose supermarkets business said the deficit largely reflected inflation not fully passed on to customers, the unwinding of Covid shopping patterns and its cost of living support for staff.

Meanwhile, oil giant Shell has announced its chief executive Ben van Beurden is to step down after almost nine years at the helm. He will be succeeded at the start of next year by Wael Sawan, who has worked for Shell for 25 years.

FTSE 100 Live Thursday

  • John Lewis posts loss amid inflation squeeze

  • Shell boss to leave at end of 2022

  • Markets steady in wake of interest rate jitters

FTSE 100 stays positive as banks lend support on outlook for rates

15:40 , Michael Hunter

London’s FTSE 100 was up in afternoon trade, with banks in demand on growing talk of bigger rate rises at the Bank of England at its September policy meeting next week.

Higher base rates help margins at financial services companies and can help with income from a range of their own assets. With speculation mounting that the Bank of England could adopt jumbo-sized 0.75% rake hikes at its Monetary Policy Committee meeting next week, lenders were making notable gains in afternoon trade.

Lloyds Banking Group gained over 3% to 48p. HSBC was up 2.2% at 530p. NatWest gained 2% to 276p.

Overall, the UK’s main stock index was 24 points higher at 7296.11, a rise of 0.2%.

Wall Street stocks steady as investors check out mixed retail sales data

15:23 , Michael Hunter

The New York stock market made a lacklustre start to the day after mixed insight into US inflation from retail sales data left investors in cautious mood.

The S&P 500 ticked up 11 points to 3956.28, a rise of 0.2% after core retail sales, which strip out the contribution of car sales fell, but the overall tracker rose as consumers boosted spending on automobiles and parts. The numbers leave play into a feeling that the Federal Reserve has more to do to fully tame inflation, leaving the way open for further aggressive rate hikes of 0.75%, with some forecasters pointing to a potential 1% rise when the Federal Reserve’s policymakers meet next week.

List of outgoing FTSE 100 CEOs reaches 18 for 2022

15:11 , Michael Hunter

News that the top job at London’s most valuable company is changing hands at the end of the year takes the number of departures of FTSE 100 CEOs to 18 with Ben van Beurden’s resignation at Shell.

You can see a full list of the companies concerned here, along with the names of the CEOs and their successors.

The list makes striking reading for investors, City experts and senior executives alike.

US stocks set to slip back after retail sales numbers create mixed picture on inflation

13:57 , Michael Hunter

Wall Street’s S&P 500 was expected to slip in opening trade as more data on inflation left investors tuning into mixed signals on the outlook for rate rises in the US.

A fall of around 7 points for the broad New York stock index was predicted, which would take it to 3959.50.

Any such slip would follow retail sales data that showed a rise of 0.3% at the headline level, as lower fuel prices freed up overall spending power, helping a 2.8% rise in the sale of automobiles. But the core retail sales number, which strips out car sales, showed a fall of 0.3%.

Inflation in general and US inflation in particular is driving sentiment on global markets, as investors consider the likely pace and extent of the Federal Reserve’s aggressive moves to increase interest rates to tame rising prices. The central bank is due to hold its September policy meeting next week, amid talk that stubbornly high inflation data could lead to a hike of 1%.

Rates outlook lifts Lloyds and NatWest shares

10:26 , Graeme Evans

Bets on another big interest rate hike today placed UK lenders NatWest and Lloyds Banking Group at the forefront of a recovery for London’s FTSE 100 index.

Talk of an unprecedented 0.75% increase by the Bank of England next Thursday has increased following yesterday’s figures showing continued core inflation pressures.

The earnings boost from a potential increase in the base rate to 2.5% helped add a penny to Lloyds shares at 47.3p and lifted NatWest by 3.5p to 273.2p, with the ex-RBS business seen in the City as the one most geared to higher rates.

Their progress came during a steadier session for markets generally after jitters over a potential 1% hike in US interest rates eased on Wall Street last night.

Having fallen by more than 1% in the past two sessions, the FTSE 100 index put back 34.97 points to 7312.27. Others on the risers board included Tesla-backer Scottish Mortgage, which has stakes in a number of Nasdaq-listed firms and added 2.6p to 829.6p. The cost impact of higher interest payments on their debt meant Severn Trent and United Utilities fell 30p to 2654p and 16p to 1023p respectively.

The biggest stock moves were found in the FTSE 250 index, with the UK-focused benchmark up 50.63 points to 18,899.83 overall. Housebuilder Redrow jumped 4% or 18.6p to 493.2p in a delayed reaction to yesterday’s full-year results.

But meat and fish packing firm Hilton Food tumbled 28% or 261p to 680p after its interim results included a warning that the full-year outturn will be short of market hopes.

Revenues rose by a fifth to £2 billion in the half year but higher interest costs lowered the adjusted profit figure to £34.4 million for a fall of 3.9%. The company added that consumers were becoming ever more cost-conscious and that these trends were exacerbated in seafood by unprecedented raw material price increases.

John Lewis plunges to £99m loss as inflation bites

10:24 , Simon English

JOHN Lewis plunged to a £99 million loss in the last six months and pledged a £500 payment to full-time staff to help ease the cost-of-living crisis.

It also promised to give free food at work for 14 weeks over winter, increase pay for new partners by 4% at a cost of £10 million and boost grants to staff most hit by inflation.

But the annual bonus to partners based on profits is plainly at risk.

Sharon White, the chair, told the Standard: “The partnership model means we can take a longer-term perspective. We will take a hit to profits to help our partners. We will make sure they are able to eat and eat well.”

She said the outlook is “highly uncertain” and that she could not say when the group might return to profits. It made £69 million for the same period to July last year.

“I’m a realistic optimist,” she said. “We will control the controllables.”

read more here

IG looks for US boost

10:22 , Simon English

ENGLAND cricket sponsor IG wants to expand its presence in America, hiring a new marketing boss to boost its appeal.

Catherine Davis has been asked to “reinvent the trading experience” for US customers as part of wider expansion plans.

Today IG said revenue in the last quarter rose 11% to £242 million. That includes sales from tastytrade, the futures broker IG bought for $1 billion last year.

During lockdown, brokers saw many thousands of new clients open accounts to invest money saved by the closure of pubs and restaurants.

That trend seems to be over. Broker Peel Hunt noted today that in “mixed market conditions”, active client numbers were “broadly unchanged” from a year ago at 279,300.

There has been some concern from regulators that the new customers may not understand the risks they are taking. That has applied particularly in the crypto currency market.

IG’s own shares have withstood market turmoil fairly well.

They are down 5% in the last year and were steady today at 786p.

The company is in the midst of a £150 million share buyback programme which ought to aid investors.

FTSE 100 recovers, Hilton Food down 29%

08:57 , Graeme Evans

Wall Street’s jitters over a potential 1% hike in US interest rates eased last night to help the FTSE 100 index find positive territory, up 37.62 points to 7314.92.

Scottish Mortgage Investment Trust, which has stakes in a number of Nasdaq-listed firms, led London’s top flight risers board with a gain of 4% or 30.6p to 838p.

Expectations for a 0.75% rise in rates by the Bank of England next week helped shares in lenders Lloyds Banking Group and NatWest improve 0.7p to 47.1p and 4.4p to 274.1p respectively.

But the rising debt interest bill for Severn Trent and United Utilities meant their shares lost 117p to 2669p and 39.5p to 1032p.

The FTSE 250 index rose 102.59 points to 18,951.79, with Dunelm up another 4% in a further boost for shares after yesterday’s reassuring full-year results.

Meat packing firm Hilton Food led the FTSE 250 fallers board, sliding 29% or 285p to 682p after downgrading full-year guidance alongside today’s interim results.

John Lewis Partnership posts £99m loss

08:29 , Graeme Evans

The half-year loss of £99 million recorded today by John Lewis Partnership compares with a deficit of £29 million in 2021/22 and a profit of £192 million in 2019/20.

Waitrose’s operating profit fell by £93 million to £432 million after sales declined 5% on a like-for-like basis to £3.6 billion and the profit for the department stores was unchanged at £295 million after a 3% improvement in sales to £2.1 billion.

It is not unusual for the business to make a loss in the first half of the year as trading is heavily skewed to Christmas.

Partnership chair Sharon White described the outlook as “uniquely uncertain” and said a successful Christmas was key for the business given the first half.

She added: “We will need a substantial strengthening of performance, beyond what we usually achieve in the second half, to generate sufficient profit to share a Partnership bonus with Partners.

“Much will depend on the wider economic outlook and consumer sentiment.”

Shell chief executive to step down

08:18 , Graeme Evans

Ben van Beurden is to stand down as Shell chief executive at the end of this year, ending a career with the oil giant that began in 1983.

Chairman Sir Andrew Mackenzie said: “Ben can look back with great pride on an extraordinary 39-year Shell career, culminating in nine years as an exceptional CEO.

“During the last decade, he has been in the vanguard for the transition of Shell to a net-zero emissions energy business by 2050 and has become a leading industry voice on some of the most important issues affecting society.”

The new boss is Wael Sawan, who has been with Shell for 25 years and is currently the director of Integrated Gas, Renewables and Energy Solutions. Sir Andrew added: ““Wael Sawan is an exceptional leader, with all the qualities needed to drive Shell safely and profitably through its next phase of transition and growth.”

FTSE 100 steadies after big sell-off

07:59 , Graeme Evans

Markets have steadied after Tuesday’s big sell-off, when a bigger-than-expected US inflation figure of 8.3% undid Wall Street hopes for a slower pace of interest rate rises.

The S&P 500 closed 0.4% higher last night on the back of the worst session in over two years, but the negative sentiment remained in Europe as the FTSE 100 index fell sharply for a second day in a row with a decline of 1.5%.

The FTSE 100 is expected to open 33 points higher at 7310, but with the risk that strong US retail sales figures could reinforce the hawkish narrative ahead of next week’s interest rate decision by the Federal Reserve.

Traders are still pricing in a third consecutive 0.75% hike, but there now appears to be less chance of the 1% increase feared by many on Wall Street on Tuesday.

In the UK, meanwhile, the chances of an unprecedented 0.75% increase by the Bank of England have increased following yesterday’s figures showing continued core inflation pressures. On the back of this speculation, the pound held firm at $1.15 today.