Yahoo Finance What to Watch: Greggs' vegan boost, Countrywide and Admiral talk Brexit, and Quiz sales dive
Here are the top business, market, and economic stories you should be watching today in the UK, Europe, and abroad:
Greggs’ vegan boost
Sales at bakery chain Greggs (GRG.L) topped £1bn for the first time and the company said the launch of its vegan sausage roll helped it have a strong start to the year.
The bakery chain posted a 15% rise in pre-tax profits to £82.6m in 2018, with sales rising 7.2% to just over £1bn. Company-managed shop like-for-like sales were up 2.9%.
Chief executive Roger Whiteside said: “Whilst there are significant uncertainties in the months ahead, Greggs has started 2019 in great form, helped in part by the publicity surrounding the launch of our vegan-friendly sausage roll.
“We hope to continue benefiting from this strong momentum during the first half of 2019 before facing stronger comparatives later in the year.”
Countrywide warns on Brexit
Struggling estate agency Countrywide (CWD.L) has warned that Brexit will knock its performance this year as the firm posted widening losses.
The group posted a bottom line loss of £218.2m in 2018 compared to £207.3m the prior year. Income for the year also tumbled 7% to £627.1m.
Brexit is leading to a slow-down in residential and commercial property transactions, particularly in London and the South, which will affect Countrywide’s first-half earnings by up to £5m.
Chief executive Peter Long said: “We encountered market weakness in quarter four due to the further uncertainties surrounding Brexit which is affecting both our sector and consumer confidence as a whole.”
Admiral preps for hard Brexit
Insurer Admiral (ADM.L) has spent £3m preparing for the potential disruptive consequences of a hard Brexit.
Admiral said on Thursday it has run stress tests for Brexit, including a no deal Brexit, and has spent £3m preparing, including setting up operations in Spain that could take care of its European business if needed.
Earlier this week, insurer Direct Line said it could be adversely impacted by a hard Brexit.
The news came as Admiral announced an 18% rise in pre-tax profits to £479.3m, which was above market forecasts.
Quiz sales fall
Fashion retailer Quiz (QUIZ.L) has warned on profits after a “significant shortfall” in sales since the start of 2019.
It said sales across its UK stores and concessions had tumbled 11.1% between 1 January and 28 February. Online sales jumped 16.2%, but this was not enough to offset the high-street gloom and Quiz said it now expects group underlying earnings of around £4.5m for the full year.
Quiz is now reviewing “all aspects” of the business as it combats the tough trading conditions and uncertain consumer backdrop.
Tarak Ramzan, chief executive of Quiz, said: “This has been a highly disappointing trading period for the group.”
Melrose’s big loss
Melrose Industries (MRO.L) has tumbled deeper into the red with pre-tax losses of £550m after hefty costs linked to its controversial £8bn hostile takeover of engineering giant GKN.
The result compares with losses of £28m in 2017. But the turnaround specialist said with costs of the GKN deal stripped out, underlying pre-tax profits surged to £703m from £258m the previous year.
Aston Martin’s CFO: ‘This is not a short-term gain stock’
Aston Martin’s CFO Mark Wilson told Yahoo Finance UK at the Geneva Motor Show that the stock is a long-term investment and said the car maker is well prepared for Brexit.
Wilson said investors must be in it for the medium to long term because “this is not a short-term gain stock.”
On Britain leaving the EU, he said: “We are very cautious about Brexit but we are also as well prepared as we can be for the things we know about and can control.”
Facebook pivots to privacy
Facebook (FB) CEO and founder Mark Zuckerberg has said his company will focus on building privacy-based communication networks in a major shift away from the social, open platforms that have made the company such a success.
Zuckerberg said in a blog post on Wednesday: “I understand that many people don’t think Facebook can or would even want to build this kind of privacy-focused platform – because frankly we don’t currently have a strong reputation for building privacy protective services, and we’ve historically focused on tools for more open sharing.
“But we’ve repeatedly shown that we can evolve to build the services that people really want, including in private messaging and stories.”
European markets await ECB
European stock markets were in the red ahead of the European Central Bank’s (ECB) latest policy decision, due at 12.45pm London time today.
Neil Wilson, the chief market analyst at Markets.com, said in an email: “Key things to watch for at this week’s European Central Bank meeting are the forward guidance on rates, growth & inflation forecasts, and anything on a new round of TLTROs [targeted long-term refinancing operation, loans intended to keep credit flowing to eurozone companies].
“Whilst there will be no overt change in policy, it does seem likely that the central bank will have to acknowledge greater downside risks,” Wilson said, given that the economic backdrop in Europe has been worsening.
Britain’s FTSE 100 (^FTSE) was down by 0.5%, Germany’s DAX (^GDAXI) was down by 0.3%, France’s CAC 40 (^FCHI) was down by 0.1%, and the Euronext 100 (^N100) was down by 0.1%.
Asian markets were mixed overnight. Japan’s Nikkei 225 (^N225) closed down by 0.6%, Hong Kong’s Hang Seng index (^HSI) was down by 0.8%, and China’s benchmark Shanghai Composite (000001.SS) was up by 0.1%.
What to expect in the US
US stock futures were pointing to a lower open. S&P 500 futures (ES=F) were down by 0.3%, Dow Jones Industrial Average futures (YM=F) were down by 0.3%, and Nasdaq futures (NQ=F) were down by 0.3%. The VIX volatility-tracking index (^VIX) was up by 10.7%.
Companies reporting in the US later today include:
