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What to Watch: Superdry slump, PageGroup hit by hiring slowdown, and RBS' Libra talks

Oscar Williams-Grut
Senior City Correspondent, Yahoo Finance UK
A person carries a bag from the Superdry store in Central Valley, New York. Photo: Gary Hershorn/Getty Images

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

Superdry sales fall

Beleaguered fashion chain Superdry (SDRY.L) announced on Wednesday that pre-tax profits fell by almost 57% to £41.9 million in its most recent financial year, just three months after founder Julian Dunkerton won his six-month battle to rejoin the company.

After tax, the company lost £85.4m, down from a profit of £65.3 million in 2018, primarily due to £129.5 million in lease and impairment charges.

Shares were down 4.4% at 8.40am UK time.

The company, which had signalled that earnings would be below market expectations with three profit warnings in eight months, pointed to the “difficult trading landscape for most fashion retailers,” saying that “unseasonably warm weather” led to declining sales.

Brexit hiring slump for Page Group

Shares in recruiter PageGroup (PAGE.L) have slumped 14% after it warned 2019 earnings are set to be towards the lower end of expectations amid “more challenging” economic conditions in the UK and elsewhere.

Gross profits in the UK dropped 2.4% to £35 million in the second quarter.

Kelvin Stagg, chief financial officer of Page, said: “It is clear that macro-economic conditions in a number of our regions are becoming more challenging, and, as such, we currently expect 2019 operating profit to be towards the lower end of the range of current market forecasts.”

RBS holds Libra talks

Royal Bank of Scotland (RBS.L) has held talks with Facebook (FB) about its new cryptocurrency Libra and is exploring ways it could possibly work on the project.

Kevin Hanley, RBS’s head of innovation, told journalists on Tuesday: “We’re in discussions with Facebook around Libra and what it might be and where it might go.”

Hanley stressed that no immediate announcements were in the works.

“It has no punchline yet but we’d very much engage and see rather than wait and find out,” he said.

Wetherspoon resilient

Pub group JD Wetherspoon (JDW.L) rose in early trade after reporting a 6.9% increase in like-for-like sales during the 10 weeks to July 7.

Total sales in the same period were up 6.6% In the year to date, like-for-likes climbed 6.7% and total sales increased 7.4%.

Boss Tim Martin admitted the nature of the UK’s relationship with the EU was “the main issue” for shareholders.

But he said the dichotomy between a deal and a no-deal Brexit was “misleading,” saying leaving without a deal actually meant signing “a multitude of deals” between individuals, firms, governments, and others.

UK GDP due

Month-on-month GDP growth figures are due at 9.30am UK.

Economists are forecasting monthly growth of 0.3% in May, although the broader trend is pointing to a shrinking of the economy by 0.1% in the second quarter.

“Though the monthly UK GDP reading is expected to bounce from -0.4% to 0.3%, it is hard to picture sterling taking too much comfort from that given the dismal, recession-suggesting state of last week’s PMIs,” Connor Campbell, a financial analyst at SpreadEx, said. “Ditto the forecast swing from -3.9% to 2.2% in manufacturing production.”

Pound slides

The pound has continued to trade at two-year lows against the US dollar (GBP/USD), after the latest round of Conservative leadership debates did nothing to quell fears of Brexit uncertainty.

Sterling was down again on Wednesday by 0.12%, keeping it at around the $1.24 mark.

The currency has been sliding over the last week due to figures showing an alarming drop in consumer spending amid continued Brexit uncertainty. Bleak sentiment was compounded by a number of industries warning of the shortages they face amid a no-deal Brexit.

Barratt Homes booming

Housebuilder Barratt Developments (BDEV.L) has upped its full-year earnings outlook, saying completions have surged to an 11-year high.

The group delivered 17,111 homes, excluding joint ventures, in the year to June 30 – up 2.6% on the previous year.

It said efforts to boost its margins are set to see pre-tax profits beat market forecasts, at around £910 million – which would mark an 8.9% rise on the previous year.

European stocks mixed

European stock markets were mixed ahead of US Federal Reserve chairman Jerome Powell’s testimony in Washington later today.

Britain's FTSE 100 (^FTSE) was up by 0.1%, boosted by the weak pound, Germany's DAX (^GDAXI) was down by 0.1%, France’s CAC 40 (^FCHI) was flat, and the Euronext 100 was flat.

Asian markets were mixed overnight. Japan's Nikkei 225 (^N225) ended down by 0.1%, China's benchmark Shanghai Composite (000001.SS) was down by 0.4%, and the Hong Kong's Hang Seng index (^HSI) was up by 0.3%.

What to expect in the US

US stock futures were pointing to a lower open. S&P 500 futures (ES=F) were down by 0.1%, Dow Jones Industrial Average futures (YM=F) were down by 0.1%, and Nasdaq futures (NQ=F) were down by 0.1%.