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(Alliance News) - JD Wetherspoon on Wednesday said sales improved steadily since the ending of all Covid restrictions, but the pub chain said virus woes have been replaced by "considerable pressure on costs" as a new source of concern.
Wetherspoon reported a 4.0% decrease in sales on a like-for-like basis in its financial third quarter, the 13 weeks that ended April 24. In its financial year to date, like-for-like sales were down 6.2%.
However, the company led by Tim Martin said sales improved throughout the period and were slightly positive in the last two weeks. It said it has returned to profitability and positive cash flow since March 13 and "is cautiously optimistic about the prospect of a return to relative normality in FY23".
Martin, the founder & chair, said he expects a break-even outcome for profit in the current year, FY22.
"The biggest threat to companies in the hospitality, tourism and related sectors is the possibility of future lockdowns and restrictions," Martin said, adding: "The collateral damage from lockdowns has yet to be quantified, but the economic cost, approximately half a trillion pounds, financed largely by 'money printing' by the Bank of England, is a direct cause of the current inflationary crisis."
Wetherspoon shares were down 2.9% early Wednesday.
Here is what you need to know at the London market open:
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MARKETS
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FTSE 100: down 0.4% at 7,534.73
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Hang Seng: down 1.3% at 20,822.53
Nikkei 225: Tokyo market closed for holiday
S&P/ASX 200: closed down 0.2% at 7,304.70
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DJIA: closed up 67.29 points, or 0.2%, at 33,128.79
S&P 500: closed up 20.10 points, or 0.5%, at 4,175.48
Nasdaq Composite: closed up 27.74 points, or 0.2%, at 12,563.76
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EUR: soft at USD1.0516 (USD1.0535)
GBP: down at USD1.2481 (USD1.2511)
USD: up at JPY130.16 (JPY129.97)
GOLD: down at USD1,864.18 per ounce (USD1,873.30)
OIL (Brent): flat at USD106.40 a barrel (USD106.12)
(changes since previous London equities close)
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ECONOMICS AND GENERAL
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Wednesday's key economic events still to come
China Labour Day holiday continues. Financial markets closed.
Japan Greenery Day holiday, aka Nature Day. Part of Golden Week. Financial markets closed.
0955 CEST Germany services purchasing managers' index
1000 CEST EU services PMI
1100 CEST EU retail sales
0930 BST UK money and credit
0815 EDT US ADP national employment report
0830 EDT US international trade in goods & services
0945 EDT US services PMI
1000 EDT US ISM services PMI
1030 EDT US EIA weekly petroleum status report
1400 EDT US interest rate decision
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UK shop price growth accelerated in April, as the retail sector moved to weather increasing inflationary pressures. According to figures from the latest British Retail Consortium-NielsenIQ tracker, shop prices rose 2.7% annually in April. Growth quickened from 2.1% in March. April's climb was also above the six-month average rise of 1.5%, the BRC noted. Food inflation alone accelerated to 3.5% in April from 3.3% in March, above the six-month average price growth of 2.6%. "The impact of rising energy prices and the conflict in Ukraine continued to feed through into April's retail prices," BRC Chief Executive Helen Dickinson said. Annual non-food inflation quickened to 2.2% in April from 1.5% in March.
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Russian forces have launched a major assault on the holdout Azovstal steel plant in the devastated port city of Mariupol while pounding sites across eastern Ukraine, as the EU moves to punish Moscow with oil sanctions. Three months into the war, Moscow has focused its fresh offensive on Ukraine's east and south. In one of a series of assaults Tuesday, 21 civilians were killed and another 28 wounded in Ukraine's eastern Donetsk region, local authorities said. Regional governor Pavlo Kyrylenko said 10 of the 21 dead were killed in the shelling of the Avdiivka coke plant, one of Europe's largest, calling it the highest daily death toll since a Russian strike on a train station in Kramatorsk about a month ago. Ukrainian President Volodymyr Zelenksky, meanwhile, said more than 150 people had been successfully extracted in Mariupol evacuation operations.
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Following weeks of laying siege to the Azovstal steelworks in the southern Ukrainian port city of Mariupol, Russian troops stormed the complex on Tuesday, according to Ukrainian sources citing its fighters at the plant. "All night they bombed us from the air...and now Azovstal is being stormed," the deputy commander of the Ukrainian Azov Battalion Svyatoslav Palamar said, according to the Ukrayinska Pravda newspaper. Two civilians have reportedly been killed in the latest Russian onslaught. Russia did not confirm the deaths, but the Defence Ministry in Moscow did say that the Azov Battalion fighters at the site had used an earlier ceasefire to return to their offensive positions and were now under aerial and artillery attack, according to Russian state news agency RIA Novosti.
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Beijing closed dozens of subway stations on Wednesday, as Covid restrictions slowly constrict movement across the Chinese capital of over 21 million people. The world's second-biggest economy has been battling its worst coronavirus flare-up since the early days of the pandemic, with most cases found in the business hub of Shanghai, where residents have been largely stuck at home for more than a month. Scenes of chaos and anger at the rolling lockdown there have alarmed Beijing residents, who fear their city is being closed down by stealth despite recording just dozens of daily cases. On Wednesday, the Chinese capital recorded just 51 local virus infections including asymptomatic ones, while Shanghai reported nearly 5,000, a downward trend as the city loosens some restrictions.
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BROKER RATING CHANGES
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UBS raises BP price target to 470 (450) pence - 'buy'
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Credit Suisse raises Anglo American target to 4,200 (3,600) pence - 'outperform'
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Jefferies raises Johnson Matthey to 'buy' (hold) - price target 2,600 (2,100) pence
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COMPANIES - FTSE 100
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Flutter Entertainment reported a rise in first-quarter earnings as the gambling operator hailed the strength of its US business. For the three months that ended March 31, revenue rose 5.4% to GBP1.57 billion from GBP1.49 billion in the first quarter last year. Average monthly players increased 15% to 8.9 million from 7.7 million. In the US, Flutter's FanDuel business delivered another "excellent performance" with 2.4 million customers and revenue of USD574 million during the quarter. It remained the number one US sportsbook with a 37% online sports betting share, Flutter said. The company said it launched its FanDuel sportsbook in New York and Louisiana in January and expanded into Ontario in April. It also beat FanDuel records in the quarter, with Super Bowl Sunday the single biggest day ever for new customers with 1.5 million active customers on the day.
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AstraZeneca said its drug Imfinzi plus chemotherapy was granted priority review by the US Food & Drug Administration for patients with locally advanced or metastatic biliary tract cancer. Back in December of 2020, Imfinzi was granted orphan drug designation by the FDA for the treatment of BTC.
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National Grid's Western Power Distribution, the largest electricity distribution network operator in Great Britain, has agreed to make a voluntary redress payment of GBP14.9 million after failing vulnerable customers, UK regulator Ofgem said. WPD accepted that it failed to meet its obligations after instances of failing to provide information, advice and services to customers on its Priority Services Register. Cathryn Scott, director of enforcement and emerging issues at Ofgem, said: "WPD did not meet all of its obligations to provide additional support to some of its most vulnerable customers to safeguard their well-being. In our view it also took too long to put this right. This is totally unacceptable. "Our enforcement against the company sends a strong message that when companies fail to provide the required services to their Priority Services Register customers, Ofgem will take action."
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COMPANIES - FTSE 250
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Aston Martin Lagonda Global Holdings said its first-quarter performance was in line with expectations as the luxury carmaker confirmed the appointment of a new chief executive. For the three months ended March 31, revenue was GBP232.7 million, up 3.7% from GBP224.4 million the year before. However, its pretax loss was GBP111.6 million, widened from GBP42.2 million in the first quarter last year. The carmaker said the revenue increase was driven by "strong pricing dynamics" throughout its core portfolio and Aston Martin Valkyrie programme deliveries of 14 vehicles. The Valkyrie is a limited production hybrid sports car that comes with a price tag of GBP2.5 million. Aston Martin said first-quarter wholesale volumes were 1,168, down 14% from 1,353 the year before. Aston Martin said wholesales were down as the company prepares for start of DBX707 production, as well as due to supply constraints. Looking ahead for 2022, Aston Martin still expects an 8% rise in core volumes and a 50% improvement in adjusted core earnings before interest, tax, depreciation, and amortisation. Promisingly, retail sales outpaced wholesales in the first quarter, the company said.
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Aston Martin also confirmed a report by the Financial Times that Chief Executive Officer Tobias Moers will leave the board immediately and the company at the end of July. Aston Martin confirmed the appointment of ex-Ferrari boss Amedeo Felisa as its new CEO, with Executive Chair Lawrence Stroll saying the company needs to "enter a new phase of growth and development". Moers's dual role of CEO and chief technology officer will be split, with another former Ferrari executive, Roberto Fedeli, brought in to be CTO.
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COMPANIES - SMALL CAP
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Online fashion seller Boohoo has revealed that profits slumped and costs soared as it struggled to get to grips with difficulties caused by the pandemic. Pretax profit for the 12 months to the end of February plunged to GBP7.8 million from GBP124.7 million the year before, as distribution costs rose and customer demand fell. Boohoo expects high costs to persist throughout the rest of this year but said it has a series of cost-cutting initiatives in place to manage the business. Despite the cost-cutting, prices for products could also rise, with the company only committing to "mitigate where possible before passing prices on to consumers". Sales were up 14% on the year to GBP1.98 billion and remain well above pre-pandemic levels, as high streets closed and shoppers turned to online.
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Wednesday's shareholder meetings
Barclays PLC - AGM
Caledonia Mining Corp PLC - AGM
CentralNic Group PLC - AGM
GlaxoSmithKline PLC - AGM
Just Eat Takeaway.com NV - AGM
Ocado Group PLC - AGM
RIT Capital Partners PLC - AGM
Safestyle UK PLC - AGM
Standard Chartered PLC - AGM
Ten Entertainment Group PLC - AGM
Tribal Group PLC - AGM
Tritax Big Box REIT PLC - AGM
Unilever PLC - AGM
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By Tom Waite; thomaslwaite@alliancenews.com
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