Yahoo Finance FTSE 100 Live: Made.com enters administration, Meta fires 11,000 staff
Marks & Spencer today revealed a 24% drop in half-year profits and said its Ocado Retail joint venture will be loss making this year.
Despite the decline in adjusted profits to £205.5 million, chief executive Stuart Machin said the high street chain approached the challenging trading conditions with an “increased resilience”.
Elsewhere in the retail sector, Made.com confirmed the appointment of administrators and handed its branding to Next.
FTSE 100 Live Wednesday
Made.com enters administration
M&S boss upbeat despite lower profits
Markets focused on US midterm election
That’s all folks. Tomorrow: results from WH Smith and AutoTrader
Wednesday 9 November 2022 17:42 , Simon Hunt
That concludes today’s FTSE coverage on the day on which Made.com gave up its search for a rescue buyer and filed for administration, while across the pond, Mark Zuckerberg fired over 11,000 Meta employees as part of a bid to slash costs.
The Evening Standard City desk will be back with more coverage from 7am tomorrow, where we’ll have results from WH Smith and interims from Auto Trader, which will shed light on the health of the used car market.
FTSE 100 off its lows in late trade helped by rally for dollar earners
Wednesday 9 November 2022 16:01 , Michael Hunter
Demand for shares in companies earning their revenue in dollars helped offset the overall impact of a sell-off in stocks more reliant on the domestic UK economy, keeping a lacklustre FTSE 100 above its day-lows in late trade.
The main London stock index was down by around 11 points in late trade at 7,294.84, a slip of 0.3%. After a bleak warning on the outlook for the UK from high street barometer Marks and Spencer -- which itself fell 3p to 114.2p -- there were some big British names at the bottom of the market. Ocado, which delivers M&S groceries, was down 33p at 671p, a drop of almost 5%. Whitbread, the owner of the Premier Inn hotel chain, fell 47p or 2% to 2520p.
Smiths Group, the multinational engineer, was near the top of the leaderboard after an upbeat trading statement helped it rise 49p or over 2% to 1600p. Defence contractor BAE Systems rose 14p or 1.8% to 800p.
The dollar rose further as investors kept watch on US election results, which did not produce as strong a wave of support for Republicans, who were expected to gain control of both houses of Congress before the poll.
New York stocks end three-day rally as investors wait for clarity on Washington election results
Wednesday 9 November 2022 14:47 , Michael Hunter
As the wait for clarity on who will control Congress went pastthe start of US trade, New York stock indices fell back while the dollar stayed strong.
The S&P 500 opened down 33 points at 3794.1, a drop of 0.9%, with investors keeping watch on the ongoing vote count, setting course to break a three-session rally. While it remained unclear if the Republicans would take control of both houses of Congress, an expected surge in support for the party did not seem to have materialised.
A split Congress is not necessarily seen as bad for investors, as it makes major policy changes harder to pass, limiting the scope of the Democrats’ President Joe Biden to enact legislation into the next race for the White House on 2024.
The dollar index, which tracks the US currency against a range of alternatives, was up 0.6% to 110.3. leaving it up 16% for the year.
Shares in Meta rise 5% after Mark Zuckerberg announces 11,000 layoffs
Wednesday 9 November 2022 14:37 , Michael Hunter
Shares in the owner of Facebook rallied in New York after the social media giant’s founder announced the biggest job cuts package in the social media site’s history.
Meta’s stock rose by over 5% at the start of trade in New York after Mark Zuckerberg said 11,000 people would leave the company, around 13% of its workforce. It is the first set of mass layoffs in the company’s 18-years.
The stock is down over 70% for the year, with investors unnerved by the extent of the company’s bet on the so-called metaverse, a blend of virtual and augmented reality technology that it sees as the next phase of the internet.
New York stocks expected to slip after US mid-term elections are too close to call
Wednesday 9 November 2022 14:06 , Michael Hunter
Wall Street’s S&P 500 is set to fall in opening trade with the outcome of the mid-term elections for control of Washington’s leglislative machine looking too close to call.
A win for Republicans would mean they could frustrate the efforts of President Joe Biden, a Democrat, to enact new laws in the run up to the next election for the White House in 2024. Predictions of a wave of support for the Republicans look over-stated so far, but a change in the control of Congress is not yet assured.
According to futures trade, the broad New York stock index will fall by 12 points to 3823.0, a slip of 0.3% amid a sense of caution as the counting continues.
James Hughes, analyst at Scope Markets, said: “All eyes remain on mid-term election results and how a lame duck president may be seen as a boon for investors.”
ITV shares fall as ad revenue falters
Wednesday 9 November 2022 13:19 , Michael Hunter
Shares in ITV are down after the commercial broadcaster revealed a slowdown in advertising spending in the nine months to the end of September.
The maker of Coronation Street and I’m a Celebrity Get Me Out of Here reported a 2% decline in total advertising revenue to £1.3 billion for the nine months to the end of September, a period when it had previously expected it to hold steady.
But It reported “strong” growth in the ITV Studios business, where revenue was up 16% to almost £1.4 billion. It was helped by strong international demand for shows including Hell’s Kitchen USA and The Voice Germany, as the group seeks to reduce its reliance on advertising.
It set December 8 as the date for the full launch of its ITVX streaming service, which will be free to viewers and funded by advertising, in time for the World Cup, with the tournament likely to help lift revenue into Christmas. It has a target for £750 million in digital revenues by 2026.
The stock fell 6% to 69p, the biggest single fall on the FTSE 100.
Vodafone to raise up to £6 billion from sale of part of its Vantage Towers stake
Wednesday 9 November 2022 13:07 , Michael Hunter
Vodafone is selling part of its stake in Vantage Towers in a deal worth up to €7 billion (£6 billion) to the FTSE 100 company, offering a rare bright spot for bankers in a lean year for mergers and acquisitions.
It will set up a joint venture with new private equity investors, KKR and GIP, to cover the the European mobile phone infrastructure company. Vodafone currently owns almost 82% of the firm, which runs over 80,000 masts in 10 countries connecting people across the continent, from Ireland to Greece.
Vodafone will also buy out minority shareholders in the Frankfurt-listed Vantage as part of the €32 per share deal, after which it says it will retain “co-control over a strategically important asset.”
The price represents a premium of around 20% to Vantage’s average share price over the last three months. The final amount raised by the sale will depend on the number of shares Vodafone’s new partners finally buy under its terms, but the Newbury-based company says minimum net proceeds will be just over €3 billion.
Mark Zuckerberg fires over 11,000 Meta employees
Wednesday 9 November 2022 11:19 , Simon Hunt
Mark Zuckerberg is to fire over 11,000 Meta employees as part of a widespread restructuring of the social media giant.
In a letter to Meta employees the billionaire said: “Today I’m sharing some of the most difficult changes we’ve made in Meta’s history. I’ve decided to reduce the size of our team by about 13% and let more than 11,000 of our talented employees go.
“We are also taking a number of additional steps to become a leaner and more efficient company by cutting discretionary spending and extending our hiring freeze through Q1.”
A gathering storm at M&S
Wednesday 9 November 2022 10:37 , Simon English
MARKS & Spencer today warned of a “gathering storm” with the UK predicted to tip into a bleak recession early next year.
The bellwether retailer reported a 24% fall in profits for the half-year to £205 million, partly due to troubles at its online venture with Ocado and a hit from pulling out of Russia.
M&S is most concerned about what happens in 2024, with analysts predicting that consumers who decide to enjoy themselves now will inevitably have to cut back later.
Melissa Minkow at digital consultancy, CI&T said: “When it comes to Christmas spending, comfort buys of sentimental or traditional items, such as M&S’s Colin the Caterpillar cake with its Christmas makeover will likely be on shopping lists this year and the retailer may benefit from this type of behaviour. But a feel-good factor splurge here will mean economies will have to be made elsewhere, with cutbacks on the weekly food bill, a move to discount stores or a make do and mend mentality.”
M&S chairman Archie Norman made the same point, talking of a “consumer crunch period”. “We all of us have got to run faster up the down escalator”, he told investors.
M&S shares tumbled more than 6% to 110p, which leaves the once queen of the high street valued at £2.1 billion. In contrast, JD Sports is valued at £5.5 billion.
City Comment
Wednesday 9 November 2022 10:36 , Simon English
THOSE of us who scour statements to the stock market for signs of gloom might wonder what the fuss is about.
Individual companies have individual problems, notably today made.com and Purplebricks, but these may not be indicative of wider malaise.
Wetherspoon, never knowingly over optimistic, reports today that sales are up smartly and that future prospects needn’t necessarily factor in Armageddon.
Collins Dictionary says “permacrisis” is the word of the year, but that’s for 2022, which at this point is backwards looking.
Elsewhere, well M&S is still smartly in profit. Its main concern is what happens in 2024, which is far enough in the future to be written off as a prediction. Anything could happen.
An FT column the other day was headlined: “Economists see recession coming, so maybe it’s not.”
The point made was that economists are really good at small details, but often find the wider picture elusive.
They have predicted all 27 of the last three recessions, so the City joke goes.
This isn’t to downplay the very real pain being felt felt by millions of people in the UK.
But as a concession to hope, how about this scenario: The World Cup is a huge success, like it nearly always is. Harry Kane does the business, dragging 10 less talented team mates with him. Pubs and other hospitality firms boom.
Christmas is enjoyed by everyone, even if they paid for it on credit.
We emerge blinking into the New Year to discover that most people remain in work and that mortgage costs are trending downwards as the City decides the new government are making a good fist of looking competent.
Everyone breathes a sigh of relief. This isn’t the way the experts are betting. That doesn’t make it impossible.
Esken weighs sale of Southend Airport as losses widen
Wednesday 9 November 2022 10:26 , Simon Hunt
The scale of strife facing Britain’s regional airports was laid bare today after Southend Airport owner Esken said it was considering putting the site up for sale after losses widened.
The firm is seeking to extend its debt facilities and plans to conduct a strategic review which “may conclude that it is in the best interests of all stakeholders to progress a sale.”
It reported a loss of £8.6 million for the six months to August, up 34% on last year.
David Shearer, Executive Chairman of Esken, said: “Our Aviation business has continued its recovery but at a slower pace than we would have wished due to continuing disruption throughout the industry with many airlines focussing on short term performance ahead of strategic positioning.”
It comes just days after Doncaster Sheffield Airport shut permanently after owners Peel Group said it had no viable future.
FTSE 100 lower on election uncertainty, FirstGroup down 5%
Wednesday 9 November 2022 10:24 , Graeme Evans
The US midterm elections kept markets on edge today as the red wave priced in by many on Wall Street failed to materialise.
The S&P 500 index has risen in the year after every postwar midterm election, but the prospect of political gridlock has divided opinion given the current economic backdrop.
The Republicans are poised to win the House of Representatives, but the battle for the Senate is on a knife-edge.
US markets closed higher last night, but today’s election state of play meant traders opted for the sidelines as the FTSE 100 index retreated 24.56 points to 7281.58.
Stuart Clark, portfolio manager at Quilter Investors, said: “The market is clinging to the view that the split power will be beneficial for markets as more extreme policies are gridlocked out and watered down.
“But ultimately what does gridlock in the current environment mean for the ability to deliver requisite policy and enable the US economy to emerge out of the current situation?”
The FTSE 250 index was 130.17 points lower at 18,567.72, with shares in FirstGroup down 5% or 5.9p to 101p after in-line interim results revealed lower operating profit in its bus division due to cost pressures and weaker government support.
M&S, Aviva and ITV shares fall, FTSE 100 lower
Wednesday 9 November 2022 08:51 , Graeme Evans
Airport scanners business Smiths is the best performing stock in the FTSE 100, with shares up 5% after its first quarter trading update.
Smiths reported 13.2% organic revenues growth for the three months to the end of October, reinforcing confidence in its full year guidance as shares in the engineering conglomerate rose 76.5p to 1628p.
The FTSE 100 index slipped 25.54 points to 7280.60, with insurer Aviva among the fallers after its third quarter update. Dividend guidance was unchanged and boss Amanda Blanc described the insurer’s performance as “consistently strong” but shares fell 4.8p to 429.1p.
In the FTSE 250 index, ITV, JD Wetherspoon and FirstGroup dropped by 3% or more following their respective updates. Marks & Spencer also retreated 1.7p to 115.35p in a session when the FTSE 250 index dipped 0.4% or 78.40 points to 18,619.49.
Ithaca valued at £2.5bn in stock market listing
Wednesday 9 November 2022 08:23 , Graeme Evans
North Sea oil producer Ithaca Energy has made its stock market debut after shares were priced at 250p for a valuation of £2.5 billion.
The Aberdeen-based company has stakes in six of the top ten largest fields in the UK continental shelf, including the two largest undeveloped discoveries.
Israeli energy firm Delek Group has raised £262.5 million after offering just over 10% of Ithaca’s total shares in the listing.
Ithaca’s executive chairman Gilad Myerson said a “high-quality selection” of institutional investors had backed the company.
He added: “Ithaca Energy has undergone a transformation over the past three years to become one of the UK's leading independent oil and gas companies and I am very excited for what lies ahead as we continue our journey in the public markets."
Shares later stood at 247.95p.
Made.com enters administration as Next takes on branding
Wednesday 9 November 2022 07:50 , Simon Hunt
Made.com has appointed administrators and handed its branding to Next after the beleaguered furniture retailer failed to find a rescue buyer.
Nicola Thompson, CEO of MADE.COM said: “I would like to sincerely apologise to everyone - customers, employees, supplier partners, shareholders and all other stakeholders - impacted as a result of the business going into administration.
“Over the past months we have fought tooth and nail to rapidly re-size the cost base, re-engineer the sourcing and stock model, and try every possible avenue to raise fresh financing and avoid this outcome.”
FTSE 100 lower despite US rally, bitcoin at $18,200
Wednesday 9 November 2022 07:49 , Graeme Evans
Jitters over the outcome of the US midterm elections mean the US dollar remains under pressure, with the pound at $1.153 this morning.
The nerves were also fuelled by the prospect of tomorrow’s US inflation figure, which will help to determine the pace of future Federal Reserve interest rates rises.
The FTSE 100 index closed flat yesterday but the FTSE 250 index added 0.8% thanks to the support of stronger sterling.
US markets were higher last night, with the S&P 500 up 0.6% and the Dow Jones Industrial Average 1% stronger. Despite these gains, CMC Markets expects the FTSE 100 index to drift 22 points lower at 7284.
On crypto markets, bitcoin stood at $18,246 after the sharp fall yesterday when it emerged that a liquidity crunch at FTX had prompted a rescue deal with rival exchange Binance.
M&S boosted by strong clothing sales
Wednesday 9 November 2022 07:29 , Graeme Evans
M&S revenues were 8.8% higher at £5.5 billion in the six months to 1 October, leading to underlying profits 24% lower at £205.5 million.
Chief executive Stuart Machin said: "Trading in the first half has been robust with both businesses growing ahead of the market, reflecting the beginnings of a reshaped M&S.”
In M&S’s food halls, sales rose by 3% on a like-for-like basis but profits declined to £71.8 million as a result of higher costs and investment.
Machin said the clothing department delivered a “stand-out” performance, with sales from this division up 14% and operating profit significantly higher at £171.4 million. Trading in the first four weeks of the second half is in line with company forecasts, with clothing and home sales up 4.2% and food sales 3% stronger.
However, the Ocado Retail joint venture recorded a £700,000 half-year loss and is expected to be in the red for the financial year.
Machin said: Underpinning our business is an improved balance sheet with reduced debt and a strong cash position.
“This progress means we face into the current market headwinds with an increased resilience and level of confidence.
“Looking beyond the current stormy weather, much is in our control and our mandate is clear - to step up the pace, accelerate change, drive a simpler, leaner business and invest in growth opportunities to build a reshaped M&S."
