UK Markets open in 7 mins
  • NIKKEI 225

    27,693.65
    +184.19 (+0.67%)
     
  • HANG SENG

    21,179.71
    -480.76 (-2.22%)
     
  • CRUDE OIL

    73.82
    +0.43 (+0.59%)
     
  • GOLD FUTURES

    1,887.50
    +10.90 (+0.58%)
     
  • DOW

    33,926.01
    -127.89 (-0.38%)
     
  • BTC-GBP

    18,967.68
    -531.15 (-2.72%)
     
  • CMC Crypto 200

    525.42
    -11.44 (-2.13%)
     
  • Nasdaq

    12,006.96
    -193.84 (-1.59%)
     
  • ^FTAS

    4,339.71
    +36.82 (+0.86%)
     

FTSE 100 Live: Virgin Orbit shares tank, Amazon to shut UK warehouses

 (Evening Standard)
(Evening Standard)

Amazon is planning to shut three UK warehouses in a decision which is set to affect 1,200 jobs, the PA news agency reports. An Amazon said the firm has launched consultations over the closure of three UK warehouses in Hemel Hempstead, Doncaster and Gourock, in the west of Scotland

More signs of resilient Christmas trading emerged today after retailers AO World and Card Factory upgraded their profit guidance.

The latest updates came as the British Retail Consortium said retail sales increased 6.5% on a like-for-like basis in December.

This was a better than expected performance but still lagged a long way short of the current rate of annual inflation.

FTSE 100 Live Tuesday

  • Amazon to shut three UK warehouses

  • Card Factory lifts profit forecasts

  • FTSE 100 under pressure after strong run

That’s all folks. Tomorrow: Sainsbury’s and JD Sports

Tuesday 10 January 2023 18:01 , Simon Hunt

That concludes the Evening Standard liveblog coverage for today.

We’ll be back at 7am tomorrow where trading updates from JD Sports and Sainsbury’s will shed light on the health of the retail sector during the crucial Christmas trading period.

FTSE 100 closes down 30 points to 7,694

Tuesday 10 January 2023 17:05 , Simon Hunt

The FTSE 100 clsoed down 30 points to 7,694 at the end of the day’s trading session in London.

Technology stocks fell the most, down an average of 1.2%, followed by real estate stocks, down 1%.

The pound lost around a quarter of a percent against the dollar to $1.2150, while Gilts also made modest losses as a retail sales survey implied a better end to the year for UK retailers.

Amazon warns of 1200 job cuts

Tuesday 10 January 2023 15:23 , Simon English

Amazon is shutting three warehouses in the UK, at a cost of 1200 jobs.

They are in Doncaster, Hemel Hempstead and Gourock in the West of Scotland.

That follows an announcement last week that the internet giant would axe 18,000 jobs across the world as part of a cost cutting drive.

It is also opening two new centres in the UK that should create 2500 jobs over the next three years.

A company spokesman said: “We’re always evaluating our network to make sure it fits our business needs and to improve the experience for our employees and customers,.”

Richard Branson’s wealth drops $100 million after failed Virgin Orbit launch

Tuesday 10 January 2023 15:05 , Simon Hunt

Sir Richard Branson has seen $106 million (£87 million) wiped from his wealth today after shares in his rocket venture tumbled, adding salt to the wound after the firm’s failed attempt to launch its first ever rocket from UK soil last night.

New York-listed Virgin Orbit shares fell 21% in the opening minutes of trade on Wall Street, shaving $141 million from its market cap. Branson controls a 75% stake in the company, according to filings with the US securities regulator.

Although failed rocket launches can be common, the hotly-anticipated inaugural attempt by Virgin Orbit was seen as a major milestone for the UK’s ambitions to become a major hub for satellite launches. Currently, satellites developed in the UK have to be launched overseas, thwarting the global competitiveness of the industry.

read more here

Wall Street holds steady as Fed’s head says US central bank should ‘stick to its knitting'

Tuesday 10 January 2023 14:48 , Michael Hunter

New York stocks were steady in opening trade after Jerome Powell, the chairman of the Federal Reserve, said the US central bank should concentrate on its fight against inflation.

Investors were keeping watch on Powell’s appearance at a conference in Stockholm on the independence of central banks. He said the Fed should stick to its inflation mandate, and target of 2%, rather than altering its approach to cover other priorities, including climate change.

Powell said: “We should ‘stick to our knitting’and not wander off to pursue perceived social benefits that are not tightly linked to our statutory goals and authorities.

The S&P 500 ticked up 6 points to 3897.14 in cautious trade.

New York stocks set to slip with Virgin Orbit ready to drop

Tuesday 10 January 2023 13:55 , Michael Hunter

Wall Street’s S&P 500 was on course for an opening fall with attention starting to turn to inflation numbers due out later in the week.

After a strong start to the year, the broad New York stock gauge was expected to fall by around 20 points, or 0.5%, to 3894.0 by futures trade.

Virgin Orbit’s stock was down over 20% in pre-market moves after the failure of its maiden mission to launch satellites into space from the UK’.

London drivers miss out as average UK petrol prices fall under £1.50 milestone

Tuesday 10 January 2023 13:26 , Michael Hunter

Average UK petrol prices are back under £1.50 a litre for the first time since Russia’s invasion of Ukraine, adding to hopes that inflation may have peaked and offering hard-pressed consumers some relief.

But the picture for London drivers may be less rosy. The AA, which tracks at-the-pump prcies,  points out that there are big variations in price on forecourts in heavily populated or busier areas, including the capital.

Read more here

Coinbase lays off almost 1,000 staff as crypto winter bites

Tuesday 10 January 2023 13:21 , Simon Hunt

Crypto exchange Coinbase is set to lay off almost 1,000 employees as the New York-listed firm seeks to slash costs in a restructuring.

It’s the latest in a string of successive job cuts at the firm after it let go of around 20% of its workforce last year amid a downturn in the crypto market.

The firm had 4,706 full-time staff in the Autumn of last year, company filings show, including a number in Europe. A spokesperson could not confirm how many UK employees were set to be laid off. The restructuring is expected to cost in the region of $149 million to $163 million, including up to $95 million in compensation awards to staff facing the sack.

read more here

ScS completes acquisition of Snug

Tuesday 10 January 2023 12:44 , Simon Hunt

Furniture maker ScS has acquired the brand, domain names, website, intellectual property and stock of Snugsofa.com (“Snug”) from the administrators of Snug Shack Limited for consideration of £875,000.

Steve Carson, Chief Executive Officer of ScS, said: “Snug is an exciting and young business with great potential. It has a strong and recognisable brand, a differentiated product and targets a market that complements our proposition.

“In that regard, it presents us with an exciting opportunity to further increase market share.

FTSE 100 down 18 points: lunchtime update

Tuesday 10 January 2023 12:41 , Simon Hunt

Five hours into the day’s trading session in London, the FTSE 100 index is down 18 points to 7,706.

Here’s a look at some of the morning’s biggest movers.

Fizzing sales at Majestic add to trend for strong Christmas trading on the High Street

Tuesday 10 January 2023 11:12 , Michael Hunter

Hopes deepened today that the demise of Covid restrictions outweighed the cost of living crisis on the high street in the run-up to Christmas, as wine retailer Majestic reported its busiest ever trading day on December 23.

The 200-strong chain noted buoyant sales of English sparkling wine, Cava and Champagne while the winter World Cup boosted beer sales.

Overall, it was the “second biggest Christmas trading period” in the company’s 42-year history.

Read more here

Britishvolt valuation plunges 96% in blow to UK EV ambitions

Tuesday 10 January 2023 10:32 , Simon Hunt

The UK’s ambitions to become a key player in the global market for electric vehicles suffered a blow today after the valuation of battery start-up Britishvolt fell over 90%.

A rescue deal has valued beleaguered EV battery maker Britishvolt at just £32 million, according to reports in the Financial Times, down from the £774 million it was valued at in a funding round in February last year.

Shareholders have until Friday to approve the new deal, the FT reported.

read more here

Recruitment sector shares fall, Hornby down 19%

Tuesday 10 January 2023 10:28 , Graeme Evans

Confidence in the recruitment sector has been dealt a blow after one of its leading players warned that profits will be short of hopes amid a softening of activity levels.

Robert Walters, which specialises in placing professionals in finance and technology roles, saw its shares tumble 6% after revealing net fee growth of 8% in the fourth quarter compared with 18% in the previous three months.

The read-across for investors elsewhere in the sector meant shares in PageGroup and Hays fell 6% and 5% respectively in the FTSE 250, reversing the recovery seen in recent weeks as hopes build that major economies can still achieve a soft landing.

Chief executive Robert Walters told investors that his company continued to see growth across all global regions and forms of recruitment. And despite being short of City hopes, full-year profits will still be a record.

However, he added: “The global macroeconomic backdrop became increasingly uncertain as the quarter progressed resulting in a softening of recruitment activity levels across many of the group's markets.”

The update echoed the cautious mood elsewhere as the FTSE 100 index experienced its first downbeat session of the year by falling 20.94 points to 7704.

The FTSE 250 index lost 61.19 points to 19,418.20, with broadcaster ITV and Royal Mail business International Distributions Service down 4.7p to 76.8p and 10p to 224.1p respectively.

One of the market’s strongest performances came from former FTSE 250 stock AO World after the online electricals retailer reported early progress on its turnaround strategy.

Revenues were in line with expectations, but a focus on cost reduction and margin improvement is paying off as earnings for the year to March will be higher than forecast at between £30 million and £40 million. Shares rallied 6% or 3.9p to 73.5p, compared with 52p in November.

Hornby shares, meanwhile, hit reverse gear after the Corgi and Airfix hobbies firm said a sales growth rate of 6% was below budget. Despite the company’s excitement over product releases for this year, the AIM-listed stock tumbled 19% or 5.5p to 23.5p.

Amazon to shut three UK warehouses amid cost-cutting drive

Tuesday 10 January 2023 10:18 , Simon Hunt

Amazon is planning to shut three UK warehouses in a decision which is set to affect 1,200 jobs, the PA news agency reports.

An Amazon said the firm has launched consultations over the closure of three UK warehouses in Hemel Hempstead, Doncaster and Gourock, in the west of Scotland.

Workers are set to be offered roles at other locations, PA reports.

Last week, Amazon said it would increase job cuts to 18,000 as it seeks to slash costs amid worsening global economic conditions.

The Seattle-based e-commerce giant, which has seen its share price fall almost 50% over the past year, said the layoffs would largely impact the firm’s physical stores and human resources wings of the company.

read more here

FTSE 100 in negative territory, Games Workshop down 5%

Tuesday 10 January 2023 08:58 , Graeme Evans

The FTSE 100 index has risen in every session so far in 2023 but London’s top flight stood 14.94 points lower at 7710 this morning after a weak handover from US markets.

Grocery warehouse business Ocado posted the biggest fall after losing 2% or 13.4p to 729.8p and Scottish Mortgage Investment Trust weakened 11.8p to 739.8p during a weak session for growth stocks.

The FTSE 250 index declined 44.36 points to 19,435.03, with Games Workshop among the leading fallers after interim results showed a 5% decline in profits. Having been on a strong run in recent weeks, the shares lost 5% or 485p to 8640p.

PageGroup shares fell 6% and rival Hays lost 4% as investors digested today’s fourth quarter update from Robert Walters revealing a softening of recruitment activity and full-year profits slightly below City forecasts. Its shares fell 8% or 44p to 496p.

Fridays diners CEO to go as revenue falls from pre-pandemic levels

Tuesday 10 January 2023 07:59 , Michael Hunter

The Fridays casual dining chain is serving up a new chief executive after a drop in revenue from pre-pandemic levels at the chain, famed for its cocktails and entertaining waiting staff.

Hotsmore, the chain’s parent, said that Robert B. Cook is stepping down “with immediate effect” from the restaurants previously known as TGI Fridays. He will be replaced on an interim basis by Julie McEwan, the current chief operating officer.

The change came as Hotsmore reported a 14% drop in ilke-for-like revenue for the 26 weeks ended 1 January 2023 compared with 2019, before Covid struck the 91-restautant company, which includes outlets in Leicester Square and the O2 Arena.

FTSE 100 set for weaker start, US markets lower

Tuesday 10 January 2023 07:52 , Graeme Evans

The FTSE 100 index is up 3.5% so far this year as European stock markets benefit from signs of easing inflation pressures and London-listed commodity stocks rally on the back of China’s relaxation of Covid restrictions.

The top flight closed last night at its highest level in over three years, a position in sharp contrast to the disappointing start to the year for Wall Street markets.

The FTSE 100 is up by over 10% since October, while Germany’s Dax index is in bull market territory after a rise of more than 20%.

Michael Hewson, chief market analyst at CMC Markets, said this morning: “These gains come across as even more counterintuitive when you consider they are coming against a backdrop of a gloomy consensus when it comes to the global economy.

“It is perhaps these concerns that are prompting investors to take the view that this outcome will force central banks to call time on their current rate hiking policy early and start cutting before the end of the year.”

Hewson expects the FTSE 100 to open 42 points lower at 7683 as traders react to last night’s weaker finish for US markets.

Terry Smith comes unstuck as markets wobble

Tuesday 10 January 2023 07:50 , Simon English

Star City fund manager Terry Smith issued a mea culpa today, as he admitted his stock picking skills have been found wanting.

In his 13th annual letter to investors in the £25 billion Fundsmith Equity Fund he noted that the fund is up 299% since it began in November 2010.

But it fell 13.8% in the year to December 2022, a sign of just how rocky markets were.

That fall is worse than the 7.8% fall in the MSCI World Index and far worse than the FTSE 100 over the same period.

Smith writes: “Whilst a period of underperformance against the index is never  welcome it is nonetheless inevitable. We have consistently warned  that no investment strategy will outperform in every reporting period  and every type of market condition. So, as much as we may not like  it, we can expect some periods of underperformance.”

He added: “Underperforming the MSCI World Index is one issue, registering a  fall in value is another. In 2022 unless you restricted your equity  investments to the energy sector you were almost certain to have  experienced a drop in value.”

Smith is far from the only big City stock picker to have found life difficult lately.

His rival Nick Train of Lindsell Train has also suffered a prolonged period of underperformance.

Smith’s personal wealth is put at £300 million by the Sunday Times Rich List.

He is a big investor is the fund and is sometimes referred to as the UK’s Warren Buffett due to similar investment styles and an equally pithy way with words.

Card Factory lifts profit forecasts as the Christmas card stay alive and well during postal strike

Tuesday 10 January 2023 07:48 , Michael Hunter

High street shoppers kept the Christmas card alive and well even during a festive season featuring postal strikes, helping the Card Factory become the latest retailer to lift its profit forecasts.

The 1,000-shop chain now expects annual earnings for the full-year of “at least £106 million”, up from consensus forecasts of £96 million, as customers returned to the high street free from the Covid-era restrictions that hit the previous Christmas.

Demand for its value-for-money Christmas range was strong for both cards and gifts and the company said it managed inflationary pressure.

The postal strike did hit online sales, which fell by over 27% year-on-year. Overall sales for the 11 months to December 31 were almost £433 million, up from £337 million.

Microsoft in talks for $10 billion investment into ChatGPT owner – reports

Tuesday 10 January 2023 07:45 , Simon Hunt

Microsoft is in talks to commit as much as $10 billion (£8.2 billion) into ChatGPT owner OpenAI as tech giants race to ramp up their artificial intelligence capability amid a surge in interest in the technology.

The investment would include a number of other investors, according to reports by news site Semafor, and would value OpenAI at $29 billion, with document issued to investors weeks ago and a target date to close the deal set for the end of 2022.

Founded in 2015, artificial intelligence research centre OpenAI was set up by a group of billionaire tech entrepreneurs including Elon Musk and Peter Thiel and received a $1 billion investment from Microsoft in 2019.

AO World lifts profit guidance amid new strategy

Tuesday 10 January 2023 07:35 , Graeme Evans

AO World’s turnaround strategy is off to a strong start after the online electricals business today lifted guidance for the year to March.

It said the plan announced in November to reduce costs and improve margins was gaining traction, meaning that earnings will be in the range of £30 million to £40 million rather than the previous estimate of less than £30 million.

In an unscheduled update, AO World said revenues were 17% lower than last year but in line with expectations.

It added: “We remain cautiously optimistic and yet mindful of the continuing macroeconomic uncertainty and tough consumer environment.”

Crypto trading app Tap Global among London’s first public listings in 2023

Tuesday 10 January 2023 07:34 , Simon Hunt

London’s Aquis stock exchange is poised to welcome its first new member of 2023 today with the listing of crypto trading app Tap Global.

Following shareholder approval for a reverse takeover by decentralised finance investor Quetzal, the firm, which is regulated in Gibraltar, is set to raise £3.1 million in capital valuing it at £30 million when it joins the exchange.

Founded by 29-year-old former software developer Arsen Torosian and prepaid card business veteran Dave Carr, Tap allows users to trade digital currencies through connecting them with a number of crypto exchanges via its app, and offers its own Mastercard to pay for online shopping using Bitcoin.

read more here

Core sales jump at Games Workshop but warehouse delays help profits slip

Tuesday 10 January 2023 07:32 , Simon Hunt

Core sales at Games Workshop jumped 11% to top £200 million for the first time in the six months to November 2022, the firm said today, but increased costs and delays to new warehouses opening helped profits slip 5% to £84 million.

The Warhammer figuring maker said total warehousing costs have increased by £2.5 million to £12.2 million over the period amid increased consumables and utilities costs.

Boss Kevin Rountree said: “Warehousing projects in North America and the UK have progressed, albeit more slowly than planned, largely due to the complexity of robustly integrating new technology with legacy Games Workshop systems.

“However, we remain confident in our technology and equipment choices.”