(Alliance News) - The following is a summary of top news stories Thursday.
----------
COMPANIES
----------
John Lewis Partnership reported sales fell in the first half of the year and issued a no-deal Brexit warning. The operator of the eponymous department store chain and Waitrose supermarkets said revenue declined year-on-year by 1.4% to GBP4.79 billion from GBP4.86 billion in the six months to June 30, with gross sales also down 1.2% to GBP5.42 billion from GBP5.49 billion. John Lewis did record a sharp rise in pretax profit, thanks to exceptional items, to GBP191.6 million from GBP6.2 million. This was driven by a GBP249.0 million credit it received from the closure of its pension scheme. Last year it made a GBP5.2 million gain on exceptional items. Without the exceptional items, John Lewis sunk to a GBP25.8 million loss from a GBP1.0 million profit. Looking ahead, the company said there is usually a marked increase in the trading at both Waitrose and John Lewis stores in the fourth quarter of the year, due to Christmas, though it expects challenging retail conditions to remain. John Lewis also conceded that it "will not be possible to mitigate the impact of" of a no-deal Brexit.
----------
WM Morrison Supermarkets issued a special dividend following an improvement in profit and revenue but said Brexit weighed on consumer confidence. In the six months to August 4, revenue edged up by 0.4% to GBP8.83 billion from GBP8.80 billion with total sales, excluding fuel, up 0.3% to GBP6.93 billion from GBP6.91 billion. Pretax profit rose by 49% to GBP202.0 million from GBP136.0 million and on an adjusted basis before exceptional items, it rose by 5.3% to GBP198.0 million from GBP188.0 million. Like-for-like sales, excluding value added tax and fuel, were up 0.2% during the six-month period, a 2.3% rise year-on-year in the first quarter was slightly offset by a 1.9% fall in the second. The company proposed two interim shareholder payouts. A regular interim dividend of 1.93 pence per share, up 4.3% from 1.85p, and a special dividend of 2.0p. Morrison also announced a "multi-year partnership" with Amazon.com, extending the supermarket's offering in the Prime Now online grocery home delivery service.
----------
Co-operative Group said like-for-like food sales grew in the first half of the year but its funerals unit struggled due to lower demand. In the six months to July 6, revenue rose by 12% to GBP5.39 billion, reflecting the contribution of Nisa Retail, a chain it acquired for GBP143.5 million in April 2018. Higher finance costs contributed to a 43% drop in pretax profit to GBP25.0 million. Finance costs totalled GBP82.0 million in the first half, up 91% year-on-year. Co-op added a GBP15.0 million fall in operating profit from the funerals business and the impact from adopting a new accounting method also hurt pretax profit. Looking ahead, Co-op said a no-deal Brexit will continue to create uncertainty and risks disrupting its supply chain.
----------
British American Tobacco said it has initiated a programme to simplify its business, in order to deliver savings to be reinvested in growing its product portfolio. The programme includes the reduction of management layers, the creation of fewer, larger and more accountable business units, and the better leverage of its Global Business Services activities. The programme is expected to be completed by January 2020, and is expected to lead to a reduction of 2,300 roles globally. Due to the removal of management layers, the London and Johannesburg-listed tobacco firm expects over 20% of senior roles in the group to be affected. A consultation process is underway with all staff that will be affected.
----------
Trainline reported strong interim revenue growth, driven by a good performance in UK ticket sales, leading to a guidance upgrade. For the six months to August 31, Trainline delivered revenue of GBP129 million, 29% higher than a year before, driven by 19% growth in net ticket sales to GBP1.84 billion. Net ticket sales in the UK were up 15% to GBP1.59 billion, with consumer net ticket sales up 25%. Internationally, net ticket sales jumped 52% to GBP259 million. Following this "strong start" to its year ending February 2020, Trainline has upgraded annual revenue growth guidance to the low-to-mid 20% range, driven once again by the UK consumer. In its financial year ended February 2019, Trainline reported revenue of GBP209.5 million, up 18% on the year before.
----------
MARKETS
----------
London shares were flat to lower as investors await the European Central Bank's interest rate decision at 1245 BST. Morrisons was the best blue-chip performer, up 4.6%. Wall Street was pointed to a higher open as the US delayed some tariffs on China.
----------
FTSE 100: flat at 7,340.02
FTSE 250: down 0.1% at 19,970.71
AIM ALL-SHARE: flat at 880.07
GBP: flat at USD1.2331 (USD1.2333)
EUR: up at USD1.1027 (USD1.0985)
GOLD: up at USD1,504.10 per ounce (USD1,491.40)
OIL (Brent): down at USD60.28 a barrel (USD62.75)
(changes since previous London equities close)
----------
ECONOMICS AND GENERAL
----------
UK Prime Minister Boris Johnson has faced renewed pressure to recall Parliament after the prime minister was forced to reveal that a no-deal Brexit could trigger medical shortages, food price rises and major cross-channel trade delays. The opposition seized on the release of Operation Yellowhammer assessments of the impact of leaving the EU without an agreement to insist MPs return to Westminster. It comes after Scottish judges on Wednesday branded the suspension of Parliament "unlawful". While releasing analysis on impacts of no deal, the government refused to comply with a similar Commons demand to make public personal messages from special advisers regarding the controversial five week prorogation of Parliament. The move came as judgment was due on Thursday in a legal challenge that argued the government's Brexit strategy will damage the Northern Ireland peace process.
----------
Johnson denied lying to the Queen in order to secure the suspension of Parliament. Scotland's highest civil court ruled on Wednesday that the five-week prorogation was unlawful because it was obtained for the "improper purpose of stymying Parliament". However, the prime minister insisted he had sought the suspension so that the government could set out a new legislative programme in a Queen's Speech on October 14. Opposition MPs have argued that the real reason was to stop Parliament holding the government to account over its Brexit plans. But, asked during a visit to mark London International Shipping Week whether he had lied to the monarch in order to obtain the prorogation, Johnson replied: "Absolutely not."
----------
The "seemingly never-ending Brexit saga" continues to cast a shadow over the housing market, with flat demand from buyers and sales expectations weakening, according to surveyors. Brexit uncertainty is a significant factor causing hesitation for buyers and sellers, the Royal Institution of Chartered Surveyors said. Rics said expectations for house sales deteriorated in August, with a net balance of 23% expecting sales to dip rather than increase in the next three months. It said August also saw flat demand from new buyers, after a couple of months where inquiries from potential purchasers had increased.
----------
US President Donald Trump said a planned tariff hike affecting USD250 billion worth of Chinese imports will be delayed "as a gesture of good will," as the world's two largest economies gear up for a fresh round of negotiations. The tariffs in question are to increase from 25% to 30% on October 15, instead of October 1 as originally planned. The move comes at the request of Chinese Vice Premier Liu He "and due to the fact that the People's Republic of China will be celebrating their 70th Anniversary on October 1", Trump tweeted. The delay also comes after China announced earlier Wednesday that it would exempt US products in 16 categories from its own tariffs in the economic superpowers' tit-for-tat trade war, which is slowing the world economy. That announcement appeared to placate Trump, who called it a "good move".
----------
German inflation came bang in line with forecasts in August, figures from Destatis showed. Germany's consumer price index rose 1.4% year-on-year, and fell 0.2% month-on-month. This was in line with consensus, according to FXStreet. In July, prices had risen 1.7% annually and 0.5% on a monthly basis. Energy prices were up 0.6% year-on-year in August, a slower rise than the 2.4% recorded in July. Excluding energy prices, the inflation rate would have been 1.6% in August. Food prices rose above average in August, up 2.7%, marking the fifth consecutive month of acceleration following a 2.1% rise in July. The harmonised index of consumer prices in August was up 1.0% on an annual basis, and down 0.1% month-on-month.
----------
