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What to watch: Nationwide and Halfords profits fall, WH Smith CEO exits, and British Steel on brink of collapse

Oscar Williams-Grut
Senior City Correspondent, Yahoo Finance UK
A Nationwide Building Society branch in Tooting, south London. Photo: AP Photo/Matt Dunham

Here are the top business, market, and economic stories you should be watching today in the UK, Europe, and abroad:

Nationwide profits dive

Nationwide Building Society has reported a 19% plunge in underlying pre-tax profits to £788m for the year to April 4.

Profits were impacted by a £227m charge for asset write-offs and its IT investment programme.

On a statutory basis, pre-tax profits fell to £833m from £977m the previous year.

Joe Garner, chief executive of Nationwide, said the group put in a “strong performance” over the year despite the profit drop and put the fall in profits down to investment in technology.

“As we expected, they have had an impact on profits in the short term, but these choices are in the long-term interests of our members,” he said.

Halfords profits crash

Halfords (HFD.L) has reported a 24% drop in pre-tax profits to £51m for the year to March 29.

Revenue was up 0.3% to just under £1.13bn. Group online sales grew 9.5% and accounted for 20% of sales.

Chief executive Graham Stapleton said: “Since launching our new strategy, we have seen encouraging early progress. As we strengthen our unique services proposition, customers are responding positively, and we are particularly pleased that nearly a quarter of all Halfords sales are now service related.

“Consumer confidence remains fragile; however, we remain confident that the strength of our customer offer, our people, our strategy and clear focus on our medium-term financial targets leave us well-placed for long-term sustainable growth.”

Huawei’s new British campus

Documents seen by Yahoo Finance UK show Huawei is set to publish detailed construction plans within a fortnight for a huge new UK facility, researching and developing new chip technology that it hopes could drive up internet speeds worldwide.

The historic former paper mill site by Sawston village, just south of Cambridge, could even ultimately become Huawei's flagship hub for all its UK-based research into next-generation internet and telecoms in years to come.

It comes as US spying fears have pressured the British government to reconsider its role in the 5G network, and Google to restrict its new phones' access to their Android operating system.

WH Smith CEO exits

Stephen Clarke will step down as CEO of retailer WH Smith (SMWH.L) at the end of October after six years in the role.

He will be replaced on 1 November by Carl Cowling, who is currently boss of the group’s high street arm.

Clarke said: “It really has been a great privilege to lead WH Smith for the last six years and I am extremely proud of what we have achieved during my time as chief executive.

“After I leave WH Smith, I have no immediate plans other than to take a break.”

At the same time, WH Smith said there was ongoing pressure on its high street division, with like-for-like sales down 1% in its third quarter.

But the travel chain saw like-for-like sales rise 3% – surging 26% on a total basis, including its recent InMotion acquisition.

Overall group comparable sales were up 1% in the 11 weeks to May 18.

Tesco pulls out of UK mortgages

Tesco Bank (TSCO.L) is to stop new mortgage lending and explore a sale of its existing mortgage portfolio.

The bank has over 23,000 mortgage customers, with a total lending balance of £3.7bn.

Gerry Mallon, chief executive of Tesco Bank, said the group would instead “focus on serving a broader range of customers in more specific areas”.

British Steel on the brink of collapse

British Steel is battling for survival amid fears it may be on the brink of collapse, which could threaten up to 25,000 jobs at Scunthorpe’s steel plant and its suppliers.

The second largest steelmaker in the UK announced last Thursday that it had enough cash to continue to operate despite orders tumbling, after securing the backing of lenders and shareholders.

Sky News is reporting on Thursday that the firm, its lenders, and the government are preparing to put the firm into administration unless another deal to keep it afloat can be struck this afternoon.

The collapse could spell disaster for Scunthorpe and its steel workers, with more than 4,000 employed at the giant plant itself and up to 20,000 more jobs reportedly dependent on it in the supply chain.

The industry has been battling many headwinds, from Chinese competition and Trump’s tariffs on EU steel to high energy bills and sterling’s plunging value.

Crypto scams jump

The number of foreign exchange and cryptocurrency scams more than tripled to 1,800 last year, the Financial Conduct Authority (FCA) said on Tuesday.

The regulator and Action Fraud, the UK’s national cyber crime and fraud reporting centre, said that Brits lost £27m to cryptocurrency and foreign exchange scams last year. Victims were swindled out of £14,600 on average.

“We’re warning the public to be suspicious of adverts which promise high returns from online trading platforms,” said Mark Steward, executive director of enforcement and market oversight at the FCA.

European markets

European stock markets were higher on Tuesday despite a down session for Asian and US markets overnight.

Britain's FTSE 100 (^FTSE) was up by 0.5%, Germany's DAX (^GDAXI) was up by 0.5%, France's CAC 40 (^FCHI) was up by 0.1%, and the Euronext 100 (^N100) was up by 0.2%.

Connor Campbell, a financial analyst with SpreadEx, said: “Following the White House’s attempt to tighten the trade screws on China via blacklisting Huawei last week – one that sent the company’s smartphone owners into a tizzy on Monday as Google suspended the firm’s access to Android updates – the US government has rowed back slightly on the issue.

“Now Huawei has 90 days to continue doing business with its American manufacturers.

“Though this reversal is arguably a sign of a government working purely on impulse rather than considered strategy, the markets were buoyed by the perceived – if potentially brief – cooling of trade tensions.”

Asian markets were lower overnight. Japan's Nikkei 225 (^N225) was down by 0.1%, Hong Kong's Hang Seng index (^HSI) was down by 0.6%, but China's benchmark Shanghai Composite (000001.SS) was up by 1.2%.

What to expect in the US

US stock futures were pointing to a higher open later today amid the cooling trade tensions.

S&P 500 futures (ES=F) were up by 0.2%, Dow Jones Industrial Average futures (YM=F) was up by 0.2%, and Nasdaq futures (NQ=F) were up by 0.4%.

Companies reporting later in the US today include:

  • Kohl’s (KSS)

  • Tiffany & Co (TIF)

  • JC Penney (JCP)

  • Home Depot (HD)

  • Urban Outfitters (URBN)

  • Nordstrom (JWN)