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(Alliance News) - Mike Ashley's Frasers Group on Friday flagged further impairments which could be in excess of GBP200 million.
Frasers Group, which owns department store House of Fraser and sporting goods retailer Sports Direct, said it is continuing to assess the potential pandemic hit to asset values.
"In our ongoing assessment we note the continuing government and government advisor pronouncements regarding 'third waves' and normality being 'some way off', meaning further restrictions are in our view almost certain," the company said.
As such, Frasers Group said it anticipates making accounting non-cash impairments to freehold properties, other Property, Plant & Equipment, and IFRS 16 Right of Use Assets which could be in excess of GBP200 million.
Friday's update supersedes February's announcement, it said, when it guided to non-cash impairments of more than GBP100 million.
Frasers Group added that any such impairment would be in addition to impairments included in the half year results announced in December - amounting to GBP124.9 million - and is expected to be included with the company's results for the financial year ending April 2021.
Here is what you need to know at the London market open:
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MARKETS
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FTSE 100: called up 0.2% at 6,954.20
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Hang Seng: down 1.3% at 28,642.10
Nikkei 225: closed up 0.2% at 29,768.06
DJIA: closed up 57.31 points, or 0.2%, at 33,503.57
S&P 500: closed up 17.22 points, or 0.4%, at 4,097.17
Nasdaq Composite: closed up 140.47 points, or 1.0%, at 13,829.31
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EUR: down at USD1.1892 (USD1.1903)
GBP: down at USD1.3681 (USD1.3739)
USD: up at JPY109.41 (JPY109.25)
Gold: down at USD1,748.85 per ounce (USD1,754.40)
Oil (Brent): up at USD63.07 a barrel (USD62.89)
(changes since previous London equities close)
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ECONOMICS AND GENERAL
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Friday's Key Economic Events still to come
1100 CEST EU quarterly balance of payments
1200 BST UK Bank of England Quarterly Bulletin
0930 BST UK narrow money (notes & coin) and reserve balances
0830 BST UK Halifax house price index
0830 EDT US producer price index
1000 EDT US monthly wholesale trade
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Calls for clarity, cheaper Covid testing and more solutions from the UK government have followed the release of its taskforce's findings into international travel during the pandemic. The Global Travel Taskforce has stopped short of confirming whether foreign holidays will be permitted from May 17 or which destinations people can visit without self-isolating on their return. Announcing the group's findings, Transport Secretary Grant Shapps did confirm a traffic light system would be used to categorise countries based on risk, but the Department for Transport says it will not be until early next month that it will decide "which countries will be on which list". But Shapps also announced a "framework" for resuming overseas leisure travel which would require all arrivals to take pre-departure and post-arrival coronavirus tests. Post-arrival tests must be the polymerase chain reaction type which cost around GBP120, he revealed, despite pleas from the travel sector for the use of cheaper and faster lateral flow tests.
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UK retail footfall improved in March, numbers showed, as the sector prepares to lift shutters once again following months of lockdowns. According to the British Retail Consortium-Sensormatic IQ tracker, footfall was 69% lower in March compared to the same month two years earlier. Due to just how fraught 2020 was for the sector, the BRC noted the footfall monitor's comparatives are now from two years ago. The March decline eased up by 4.9 percentage points from February's fall. On high streets, the footfall drop was 65% in March compared to two years ago. It fares slightly favourably to the three-month average decline of 68%. Retail parks had a 37% fall, compared to 39% average, while shopping centres fared worse, registering a 73% decline, against the 76% average drop.
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Factory prices in China climbed further in March, growing at the fastest pace in more than two years, official data showed Friday – backed by a rise in commodity prices and the country's economic recovery from Covid-19. The producer price index, which measures the cost of goods at the factory gate, exceeded expectations to grow 4.4% from a year ago, said the National Bureau of Statistics. A smaller rise of 3.5% was expected, according to consensus cited by FXStreet. The figure was "due to factors such as rising international commodity prices" including those of crude oil and iron ore, and boosted by an "increase in domestic industrial production and investment demand", said NBS senior statistician Dong Lijuan. Data also showed China's consumer price index rose 0.4% on-year in March, with prices of some food items such as fresh fruit growing but that of pork dropping. A smaller annual rise in consumer prices of 0.3% was expected, according to consensus cited by FXStreet.
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BROKER RATING CHANGES
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BERENBERG RAISES MARSTONS TO 'BUY' ('HOLD') - TARGET 140 (90) PENCE
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RBC RAISES HILTON FOOD TO 'OUTPERFORM' ('SECTOR PERFORM') - TARGET 1500 (1200)P
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JPMORGAN CUTS BRITISH AMERICAN TOBACCO TO 'NEUTRAL' (OVERWEIGHT) - PRICE TARGET 3100 (3500) PENCE
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COMPANIES - FTSE 100
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Rio Tinto said it has entered into a binding heads of agreement with strategic partner Turquoise Hill Resources for an updated funding plan for the completion of the Oyu Tolgoi underground project in Mongolia. Rio Tinto said the plan addresses the estimated remaining known funding requirement of around USD2.3 billion, building on and replacing the arrangements established in the memorandum of understanding that Rio Tinto and Turquoise previously entered into in September. As part of the terms the companies will pursue a re-profiling of principal debt repayments up to USD1.4 billion with lenders under the existing project finance arrangements to better align with the revised mine plan, project timing and cash flows. They will also seek to raise up to USD500 million in senior supplemental debt under the existing project financing arrangements from selected international financial institutions.
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COMPANIES - FTSE 250
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Avon Rubber said trading in the second quarter continued to be strong with ongoing positive momentum and continued strong order intake across its portfolio. The company expects to report revenue of USD122 million for the first half ended March 31, up 40% from USD87 million at the same time last year. This includes a first-time contribution from Team Wendy of USD20 million during the first five months of ownership. As a result and taking into account the current order book of USD155 million and expected order intake in the second half, Avon remains "confident of achieving its expectations for the current financial year".
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COMPANIES - MAIN MARKET AND AIM
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Fast-fashion retailer boohoo Group said it has agreed a long-term lease for a new warehouse in Daventry, due to become operational in the second quarter of the financial year. The company noted that the site will support its expansion and adds capacity in addition to its existing facilities in Burnley, Sheffield and Wellingborough. In aggregate, these sites will give net sales capacity in excess of GBP4 billion. The new warehouse is scalable, with boohoo expecting to invest over GBP50 million in the coming years, increasing capacity and offering operational flexibility as it grows. The deal is expected to secure up to 500 jobs and in the future create up to a further 1,000 jobs as capacity increases at the site, boohoo added.
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COMPANIES - GLOBAL
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Australia has finalised a deal to buy an extra 20 million doses of the Pfizer vaccine as it rapidly pivots away from its earlier plan to rely mainly on the AstraZeneca jab. Prime Minister Scott Morrison announced the deal just hours after saying Australia would stop using the AstraZeneca vaccine for people aged under 50. He said the deal means Australia will get a total of 40 million doses of the Pfizer vaccine by the end of the year, enough to inoculate 20 million people in the nation of 26 million. Australia's pivot came after the European Medicines Agency said this week it had found a "possible link" between the AstraZeneca vaccine and rare blood clots, though regulators in the UK and the EU emphasised that the benefits of receiving the vaccine continue to outweigh the risks for most people.
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A British hedge fund's buyout offer for Toshiba faces a long road, including seeking regulatory approval and additional financing, the chair of the Japanese firm's board warned. CVC Capital Partners is reportedly considering a 30% premium over Toshiba's current share price, valuing the deal at more than USD20 billion. But Toshiba's Osamu Nagayama said significant clarifications were needed before the proposal could be fully reviewed. He noted that CVC proposes seeking financing assistance from co-investors and banks, which Toshiba expects will "require a substantial amount of time and considerable complexity". The proposal "is also conditional on a variety of matters such as clearances", he added in a statement.
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Epic Games and Apple duelled on Thursday in legal filings ahead of a trial over whether to break the iPhone maker's tight grip on the App Store. Epic, the maker of the massively popular Fortnite game, accused Apple of trapping people in its mobile device world and collecting "outsized commission" at the App Store that serves as the only source of digital content. Apple countered that it has no monopoly when it comes to digital games and that the suit is part of an effort by Epic to portray "Apple as the 'bad guy' so that it can revive flagging interest in Fortnite." Apple pulled Fortnite from its App Store in August of last year after Epic released an update that dodges revenue sharing with the iPhone maker, and the companies are now locked in a legal battle. A trial in the case is set to begin May 3 in US federal court near San Francisco.
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The effort to create the first labour union at Amazon.com Inc appeared headed for defeat, with votes against the move far outstripping those in favour when counting of ballots was paused late Thursday. The tally stood at 1,100 votes of 'No' to the idea of forming a laboyr union in Alabama, versus 463 votes supporting the proposal when National Labor Relations Board officials halted for the evening. Counting was to resume Friday morning. About 55% of the more than 5,800 workers at an Amazon warehouse in the city of Bessemer cast ballots, according to the Retail, Wholesale and Department Store Union. A simple majority will determine the outcome.
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Friday's Shareholder Meetings
Online Blockchain PLC - GM re authority to issue shares for cash
Orient Telecoms PLC - GM re 'serious loss of capital'
Rio Tinto PLC - AGM
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By Lucy Heming;Â lucyheming@alliancenews.com
Copyright 2021 Alliance News Limited. All Rights Reserved.
