Yahoo Finance What to watch: Just Eat's lockdown boost, M&G 'resilient', and Admiral helped by quiet roads
Here are the top business, market, and economic stories you should be watching today in the UK, Europe, and abroad:
Just Eat’s lockdown order boost
Lockdowns around the world helped boost order volumes at takeaway app group Just Eat Takeaway.com (JET.L), the company said Wednesday.
Orders jumped 32% in the first six months of the year, “driven by strong accelerated order growth in the second quarter.”
The surge in ordering as millions were stuck at home helped revenue to rise 44% to €1bn (£900m, $1.2bn) in the first-half. The company made a loss of €158m, largely driven by deal costs associated with its merger with Takeaway.com and a proposed takeover of GrubHub.
“The merger which created the group and the proposed takeover of Grubhub did incur costs but the benefit is geographically diversified exposure to the takeaway trend,” said Russ Mould, investment director at stockbroker AJ Bell.
Shares rose 3.7%.
M&G’s ‘resilient’ performance
Investment group M&G (MNG.L) topped the FTSE 100 on Wednesday after reporting what chief executive John Foley called a “resilient” set of half-year results.
Operating profit, capital generation, and assets under management all fell in the first half of the year, but post-tax profit rose 3.8% to £826m.
“This has been a resilient performance in extremely difficult times, with the value of our diversified business mix coming through strongly,” Foley said in a statement.
“Despite the disruption caused by the pandemic, net new money has flowed into our Institutional Asset Management business, while our UK retail savings franchise, anchored on our unique PruFund offering, has remained in positive net inflow.
“Outflows in Retail Asset Management declined in the second quarter, as performance rallied. Work is underway here to further improve returns and customer value.”
The company confirmed a 6p a share dividend. Shares rose 4.2%.
Admiral boosted by quiet roads
Car insurer Admiral (ADM.L) has delivered a bumper set of half-year results, boosted by “significantly lower motor insurance claims” as a result of COVID-19 lockdowns.
Admiral pre-tax profit jumped 31% to £286m in the first six months of the year, even as turnover slipped by 4% to £1.7bn. Admiral increased its interim dividend by 12%, rising to 70.5p per share.
“Our response to that pandemic highlighted two of Admiral’s key strengths – competent execution in the short term and sustainable values for the long term,” chief executive David Stevens said.
“This year’s interims benefit again from our consistently competent underwriting and conservative reserving on past years, feeding into another strong set of results in the core business and beyond.”
Shares rose 4.6%.
Balfour Beatty falls to half-year loss
The shutdown of construction sites across the UK during lockdown pushed Balfour Beatty (BBY.L) to a half-year loss, the company said on Wednesday.
Revenue rose almost 8% to £4.1bn at the construction company but Balfour fell to a pre-tax loss of £24m in the first six months of the year. That compared to a profit of £71m in the first half of 2019.
“The financial impacts of COVID-19 are unavoidable; but they will pass,” chief executive Leo Quinn said in a statement.
“Since the start of Build to Last, our balance sheet, order book and expert capability are at record levels. We look forward with confidence to returning to profitable managed growth, and to delivering ongoing value for all our stakeholders.”
Shares fell 3.8%.
Asos boosted by sports clothing and beauty sales
Shares in Asos (ASC.L) surged after the online retailer said a shift in shopping habits among customers had delivered an unexpected boost to its business.
In an unplanned trading update on Wednesday, Asos said sales and profits for its financial year were now expected to be “significantly ahead of market expectations.”
The retailer said the upgrade was driven by continued strong demand among customers and a fall in return rates, which lowered its costs.
Asos said lower returns were driven by demand for activewear and its “face + body” beauty and personal care products. Both categories typically have lower return rates than other categories.
Asos said it was also benefitting from “a prolonged shift in customer behaviour towards more deliberate purchasing across all product categories,” which led to lower returns.
Revenues are now forecast to grow by between 17% and 19% for the full-year. Pre-tax profit is expected to fall in the £130m ($170m) and £150m range.
Analysts had expected revenues to grow by around 15% this year and had pencilled in a profit of only around £50m.
Shares jumped over 10% at the open.
UK falls into worst recession in G7
The UK economy suffered its largest-ever contraction and officially entered a recession in the second quarter, as the coronavirus lockdown took a heavy toll on economic activity in the country.
Economic output declined by a record 20.4% between April and June, according to an initial estimate from the Office for National Statistics (ONS).
The quarter-on-quarter contraction in gross domestic product (GDP), which was only slightly better than the 21% that analysts had forecast, follows the 2.2% decline seen in the first three months of the year.
European stocks mixed after late Wall Street sell-off
European stocks markets were mixed at the open on Wednesday, following dire UK GDP numbers and a late sell-off on Wall Street overnight.
The FTSE 100 (^FTSE) was up 0.2% in London shortly after the open, despite official statistics confirming the UK has fallen into the worst recession of any G7 nation as a result of the COVID-19 pandemic.
The more domestically-focused FTSE 250 (^FTMC) index was flat.
On the continent, Germany’s DAX (^GDAXI) slipped 0.1%, France’s CAC 40 (^FCHI) was flat, Spain’s IBEX 35 (^IBEX) was up 0.1%, and Italy’s FTSE MIB (FTSEMIB.MI) was 0.1% higher.
The cautious open came after a late sell-off on Wall Street overnight. The S&P 500 came close to matching a record high last reached in February on Tuesday, but was hit by a broad sell-off late in the day. Analysts said the trigger was comments from Mitch McConnell, the US Republican leader in the Senate, suggested no progress had been made on stimulus talks.
Wall Street looked set to open in the green later today. S&P 500 futures (ES=F) were up 0.4%, Dow Jones futures (YM=F) were 0.6% higher, and Nasdaq futures (NQ=F) were trading up 0.6%.
Stocks were mixed overnight in Asia. Japan’s Nikkei (^N225) rose 0.4% and the Hong Kong Hang Seng (^HSI) added 0.8%. The Shanghai Composite (000001.SS) dropped 0.7% and the Shenzen Component (399001.SZ) shed 1.2%. Australia’s ASX 200 (^AXJO) fell 0.1%.
