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(Alliance News) - Marks & Spencer said Tuesday it is embarking on a "multi-level consultation programme" which will result in a reduction of around 7,000 roles over the next three months.
The food, clothing and homeware retailer said the job cuts will come in its central support centre, in regional management, and in UK stores. It expects a significant proportion of the job reductions will be made through voluntary departures and early retirement.
M&S said it expects to create a number of new jobs as the UK high-street stalwart invests in online fulfilment and a new ambient food warehouse, as it seeks to reshape its stores over the course of the year.
M&S said the cost of the programme including redundancies will be reflected in a significant adjusting item to be included in its half-year results. The company noted that the streamlining programme was an "important step" in delivering on its cost-savings programme and ensuring it emerges from the Covid-19 crisis with a lower cost base and a stronger, more resilient business.
Turning to current trading, in the 13 weeks to August 8, Food sales were up 2.5%, while revenue in the Clothing & Home unit was down 39%. Group revenue fell 13% during the period.
"Overall the group year to date has performed ahead of the scenario we announced at the year-end in revenue and cash. However at this early stage, there remains substantial uncertainty about market conditions and the duration of social distancing measures, and we are retaining a cautious approach to planning for the balance of the year," M&S said.
M&S is scheduled to release its results for the half year to the end of September on November 4.
The stock was up 1.7% early Tuesday but is down 46% so far in 2020.
Here is what you need to know at the London market open:
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MARKETS
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FTSE 100: down 0.7% at 6,084.46
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Hang Seng: down 0.2% at 25,308.23
Nikkei 225: closed down 0.2% at 23,051.08
DJIA: closed down 86.11 points, or 0.3%, at 27,844.91
S&P 500: closed up 9.14 points, or 0.3%, at 3,381.99
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GBP: up at USD1.3167 (USD1.3096)
EUR: up at USD1.1902 (USD1.1867)
Gold: up at USD2,004.92 per ounce (USD1,984.00)
Oil (Brent): flat at USD45.28 a barrel (USD45.04)
(changes since previous London equities close)
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ECONOMICS AND GENERAL
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Tuesday's Key Economic Events still to come
0830 EDT US housing starts and building permits
0855 EDT US Johnson Redbook retail sales index
1000 EDT US quarterly retail e-commerce sales
1630 EDT US API weekly statistical bulletin
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China ramped up tensions with Australia after it launched a probe into wine imports from the country, the latest salvo in an increasingly bitter row between the trade partners. Relations between Beijing and Canberra have nosedived in recent months after Australian Prime Minister Scott Morrison joined US calls for an independent inquiry into the coronavirus pandemic, which was first detected in the Chinese city of Wuhan last year. China, Australia's biggest trade partner, has since threatened economic blowback on a range of Australian goods including beef and barley as well as tourism and higher education.
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BROKER RATING CHANGES
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JEFFERIES RAISES WILLIAM HILL PRICE TARGET TO 330 (305) PENCE - 'BUY'
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COMPANIES - FTSE 100
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Anglo-Australian miner BHP Group lowered its annual dividend, as profit and revenue declined on lower prices and an increase in the closure of mines and rehabilitation provisions, as a result of Covid-19. For the year to the end of June, pretax profit dropped by 10% to USD13.51 billion from USD15.05 billion the year before, as revenue declined by 4.3% to USD42.39 billion from USD44.29 billion. BHP's revenue performance came in short of company-compiled expectations, which stood at USD43.07 billion. Profit from operations decreased by 11% to USD14.42 billion from USD16.11 billion the prior year, while underlying earnings before interest, taxes, depreciation and amortisation slipped by 5% to USD22.07 billion from USD23.16 billion. Underlying Ebitda was just ahead of consensus expectations, which had the figure at USD22.01 billion. BHP said its performance was hurt by lower prices, particularly in coal, copper and petroleum, lower volumes including a decline in copper grades and petroleum fields, and a rise in the closure and rehabilitation provisions for closed mines. BHP declared an annual dividend of 120 US cents, down 10% from 130 cents the year before
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Persimmon said it delivered a resilient first-half performance as it grappled with the challenges posed by the coronavirus crisis to home building. For the half-year ended June 30, revenue fell 32% to GBP1.19 billion from GBP1.75 billion a year ago, and pretax profit fell 43% to GBP292.4 million from GBP509.3 million. Home completions sank to 4,900 from 7,584, but the new home average selling price rose to GBP225,006 from GBP216,942. The company said build delays caused by the onset of the Covid-19 pandemic resulted in a 35% reduction in first-half new home legal completions compared with last year. Persimmon slashed its interim dividend 83% to 40 pence from the 235p paid out last year. The housebuilder said further dividend payments this year will remain "under close review". Looking ahead, Persimmon said it has had an excellent start to the second half of 2020, with a 49% year-on-year increase in average weekly private sales rates per site since the start of July and a current forward order book of GBP2.5 billion - a 21% increase on last year.
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Compass Group said it has appointed Ian Meakins as non-executive chair and a director of the company. Meakins will join the board on September 1 and will assume the role on December 1 when the current chair, Paul Walsh, steps down. Meakins was previously chief executive of plumbing and heating products supplier Ferguson.
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COMPANIES - GLOBAL
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Oracle has entered into talks to buy video sharing app TikTok, the Financial Times reported, citing people briefed on the matter. Business software firm Oracle has held preliminary talks with ByteDance - TikTok's China-based parent company - and is considering buying the app's operations in the US, Canada, Australia and New Zealand, the FT said. Microsoft has been the lead contender to buy TikTok since announcing talks in early August. Twitter also has held early stage talks, but there are concerns about its ability to finance such a deal, the newspaper said.
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Sajid Javid has accepted a role with US bank JP Morgan Chase, PA reports. The member of Parliament, who quit as UK chancellor of the exchequer earlier this year, has been appointed senior adviser on the bank's advisory council for Europe, the Middle East & Africa. The bank would not disclose Javid's salary but confirmed it would be a paid position. Javid dramatically exited the Cabinet in February this year following a power struggle with the prime minister's chief adviser Dominic Cummings. He refused to fire his closest aides and install candidates chosen by Number 10, and was swiftly replaced by his former protege Rishi Sunak. The role with JP Morgan marks a return to Javid's roots – he worked for the bank throughout the 1990s before joining Deutsche Bank.
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Tuesday's Shareholder Meetings
no events scheduled
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By Tom Waite; thomaslwaite@alliancenews.com
Copyright 2020 Alliance News Limited. All Rights Reserved.
