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(Alliance News) - Clothing and homewares retailer Next on Wednesday remained its traditionally gloomy self on Wednesday.
Next backed its full-year profit and revenue guidance but said it expects sales growth to wane after a strong third quarter.
Total full price sales were up 17% on two years ago in the 13 weeks that ended October 30, the third quarter of the company's financial year, with sales in the past five weeks up 14%.
"As expected, sales growth has moderated in the last five weeks as the effect of pent-up demand begins to diminish," said Next.
It does not expect the current pace of growth to continue, citing a likely easing of pent-up demand, "challenging" stock availability and a possible moderation in discretionary purchases after jumps in prices for essential goods, such as fuel.
Next expects full-price sales to grow by 10.2% in the fourth quarter on two years ago, unchanged on previous guidance. It expects full-year sales to be up 11.0% on two years ago, as opposed to 10.7% guided previously. Pretax profit guidance was held at GBP800 million, which would be up 6.9% on two years prior.
"During the last five weeks we have beaten our full price sales forecast by GBP14 million which generated around GBP4 million of profit. We anticipate that this will be largely offset by further investment in digital marketing and increased use of inbound air freight and other Online distribution costs," the retailer said in its statement.
"In what has been a difficult period for retailers, given supply chain issues and HGV driver shortages, Next has highlighted its resilience with this latest update," commented Russell Pointon of Edison Group, adding: "With retailers preparing for their busiest period of the year, signs for Next PLC are looking promising."
Next will provide its Christmas sales update on January 6.
Next shares were down 2.3% 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 0.1% at 7,269.91
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Hang Seng: down 0.3% at 25,024.75
Nikkei 225: Tokyo market closed for holiday
DJIA: closed up 138.79 points, 0.4%, at 36,052.63
S&P 500: closed up 16.98 points, 0.4%, at 4,630.65
Nasdaq Composite: closed up 53.69 points, 0.3%, at 15,649.60
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EUR: unchanged at USD1.1581 (USD1.1580)
GBP: up at USD1.3642 (USD1.3614)
USD: up at JPY113.92 (JPY113.81)
Gold: down at USD1,781.20 per ounce (USD1,788.90)
Oil (Brent): down at USD83.61 a barrel (USD84.09)
(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
Japan Culture Day holiday. Financial markets closed.
1100 CET EU unemployment
0930 GMT UK services purchasing managers' index
1100 GMT Ireland unemployment
0815 EDT US ADP national employment report
0945 EDT US IHS Markit services PMI
1000 EDT US ISM services PMI
1030 EDT US EIA weekly petroleum status report
1400 EDT US Federal Reserve interest rate decision
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UK house price growth remained elevated in October, according to data from mortgage lender Nationwide, boosting the average home price to a record high. Month-on-month, house prices were up 0.7% in October, the pace of increase ticking up from 0.2% in September, even though the stamp duty holiday has come to an end. Annually, prices rose 9.9%, slowing a touch from September's 10.0%. October's growth brought the average price of a house in the UK to GBP250,311, topping the quarter-of-a-million mark for the first time.
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The Republican candidate pulled off a stunning upset to win the governor's mansion in the US state of Virginia, US television networks projected, in a race seen as an early verdict on President Joe Biden's first year in office. Newcomer Glenn Youngkin was 2.7 points ahead of Democrat Terry McAuliffe in the neck-and-neck tussle shortly after midnight, with more than 95% of the vote counted, prompting NBC, CNN and ABC to call the election for the Republican. A harbinger of the parties' prospects in next year's midterm elections, the race was initially expected to be a comfortable Democratic win but instead became a toss-up in the closing days of the campaign.
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Ex-cop Eric Adams, who fought racial discrimination within the police, was elected New York's next mayor and will become just the second African American to lead the US's largest city. He will take office in January, tasked with steering the metropolis's economic recovery after the pandemic, which has killed more than 34,000 residents and closed hundreds of thousands of businesses. Adams had been the overwhelming favourite to defeat Republican rival and volunteer crime fighter Curtis Sliwa in the liberal-voting bastion where registered Democrats outnumber Republicans by seven to one. Early unofficial results released by New York City's Board of Elections suggested that Adams would win more than 70% of the votes, and Sliwa, a 67-year-old right-wing radio host and founder of the Guardian Angels crime prevention group, quickly conceded.
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BROKER RATING CHANGES
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UBS RAISES ROYAL MAIL TO 'NEUTRAL' (SELL) - PRICE TARGET 440 PENCE
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LIBERUM RAISES ANGLO AMERICAN TO 'BUY' ('HOLD')
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BERNSTEIN RAISES WPP TO 'MARKET-PERFORM' (UNDERPERFORM)
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BERNSTEIN RAISES UNILEVER TO 'MARKET-PERFORM' (UNDERPERFORM)
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COMPANIES - FTSE 100
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Anglo American said it has appointed Duncan Wanblad as chief executive officer, succeeding Mark Cutifani, who is leaving after nine years in the role. Wanblad led the miner's Base Metals business as CEO from 2013 to 2019, and took on the Strategy & Business Development portfolio as group director in 2016. Anglo American Chair Stuart Chambers said Wanblad is "the standout and natural successor" to Cutifani. "In both executive and non-executive roles spanning most of Anglo American's businesses, Duncan has been integral to shaping the strong competitive position of the company today. Following a rigorous global process to identify Mark's successor, including those on our internal succession plan, the board felt that Duncan is uniquely qualified to take Anglo American on the next phase of improvement," said Chambers. Cutifani is stepping down from the board on April 19, 2022, and will remain employed by Anglo American until the end of June as support the handover.
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BHP said it is in discussions with Wyloo Metals for a "mutually beneficial arrangement" as the duo vie to acquire Noront Resources. BHP in October upped the ante in its bidding war with Wyloo, increasing its offer for Noront to CAD0.75 per share, from its original tilt of CAD0.55, and besting Wyloo's updated CAD0.70 bid made at the end of August. Wyloo first made an offer for Noront in May for CAD0.315 per share. Noront shares closed 8.2% lower at CAD0.78 each on Wednesday in Toronto, giving the miner a market value of CAD438.4 million, about USD353.0 million. Noront is focused on the development of its Eagle's Nest nickel, copper, platinum and palladium deposit, as well as chromite deposits located in the James Bay Lowlands of Ontario.
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Land Securities, just two days after revealing the GBP190 million takeover of UK property developer U&I, said it has taken a majority stake in Salford's MediaCity. LandSec will pay GBP425.6 million for a 75% stake in the office, residential and leisure development outside Manchester.
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A fund managed by Vitruvian Partners has sold 11.0 million shares in cybersecurity firm Darktrace at a price of 580 pence each, raising GBP63.8 million. The price was an 8.3% discount to Darktrace's closing price of 632.5p on Tuesday. The sale, first announced after the market close on Tuesday, was carried out by Deep Defence, a wholly-owned subsidiary of Vitruvian Investment Partnership III, a fund managed by Vitruvian Partners. Vitruvian will retain just shy of a 3% stake in Darktrace following the placing and has agreed to a 60-day lockup for these shares. Darktrace will not receive any of the placing proceeds.
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COMPANIES - FTSE 250
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Morgan Sindall said it now expects to deliver a full-year performance slightly ahead of prior expectations following recent strong trading. The construction firm said it has had a "significant period" of winning work, with the total secured workload at the end of September standing at GBP8.9 billion, up 7% from the year-end position. Within this, the construction secured order book of GBP4.7 billion was up 20% from the 2020 year-end. "Based on the performance to date and with good visibility of secured workload through to the end of the year, it is now expected that the group will deliver a full year performance which is slightly above its previous expectations," said Morgan Sindall.
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Pets at Home upgraded its guidance and said Chief Executive Peter Pritchard plans to step down after 11 years in the business following its "successful turnaround". He will remain "fully engaged" in his CEO role until late May next year and the search for his replacement, across internal and external candidates, has started. Alongside this, the pets products retailer said strong trading has continued, and it now expects underlying pretax profit for the financial year ending March 31 to be at the top end of analyst expectations, ahead of previous guidance. It places the current analyst consensus range at GBP128 million to GBP135 million.
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COMPANIES - MAIN MARKET AND AIM
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Rubix, a London-based industrial repair kit firm, said late Tuesday it will not proceed with listing on the London Main Market in early November. Despite claiming strong backing for its business model and strategy from investors, Rubix said it is pulling out due to "difficult ongoing conditions for IPOs". Last week, Central Copper Resources, which is focused on the Democratic Republic of Congo and Zambia, pushed back its AIM float for a second time, this time to "mid-November". Earlier last month, pitched roofing business Marley Group postponed its Main Market offering indefinitely.
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COMPANIES - GLOBAL
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Deutsche Lufthansa said it was back in the black in the third quarter of this year – for the first time since the start of the coronavirus pandemic – as restrictions are lifted and air travel takes off again. "With rising demand for business travel and a record result of Lufthansa Cargo, we have mastered another milestone on our way out of the crisis: we are back to black," Chief Executive Carsten Spohr said in a statement. The airline said its revenue almost doubled in the period from July through September, and it posted a small underlying, or operating, profit of EUR17 million, compared with a loss of EUR1.3 billion a year earlier. Looking ahead, Lufthansa said it expects to narrow its full-year operating loss to "less than half" the EUR5.5 billion it booked for 2020 when travel restrictions shut down large parts of the airline industry.
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Wednesday's Shareholder Meetings
Hansard Global PLC - AGM
ITM Power PLC - GM re completed capital raise
Manchester & London Investment Trust PLC - AGM
Wilmington PLC - AGM
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By Tom Waite; thomaslwaite@alliancenews.com
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