LONDON (Alliance News) - The entire UK clothing retailer sector has been hit Wednesday after Next lowered its full-year earnings forecasts, blaming lower sales as warm autumn weather meant consumers delayed purchases of winter clothes.
The UK fashion retailer said it now expects sales growth of 6% to 8% for the year to January 2015, down from its previous growth forecast of between 7% and 10%, and cut its full-year pretax profit estimate to between GBP750 million and GBP790 million, representing annual growth of between 8% and 14%.
The company had warned in September that unseasonably warm weather might affect sales of new clothes as winter approached, reporting sales of 6% at that point in the quarter compared with its forecast for more than 10%.
Next said fourth-quarter full-price sales, which includes the key Christmas period, might even drop by as much as 2%, such has been the effect of the weather, though the top end of its forecast was for growth of 4%.
Sales growth in the 13 weeks to October 25 was 5.4%, with retail sales contributing 2.4% and directory sales contributing 9.7%. That was a big slowdown from the first half of the year: its nine-month sales growth was 8.8%, with retail sales up 5.8% and directory sales up 13.7%.
Next was one of the worst-performing stocks in the FTSE 100 Wednesday morning, and was joined by Marks & Spencer. In the FTSE 250, SuperGroup, JD Sports Fashion and Debenhams were amongst the worst performers.
Investec analyst Alistair Davies says the sales slowdown means there's a risk retailers start running big promotional campaigns just ahead of the peak pre-Christmas trading season.
UK mortgage approvals in September declined to the lowest level since July 2013, the Bank of England said. The number of mortgages approved for house purchases decreased to 61,267 in September, from 64,054 in August. This was the lowest level since July 2013, and was worse than economists' predictions of a decline to 62,000.
Total lending to individuals increased by GBP2.7 billion, smaller than last month's GBP3.2 billion increase. Within this, secured lending rose GBP1.8 billion versus GBP2.2 billion growth a month ago. Similarly, consumer credit increased by GBP0.9 billion after rising GBP1 billion in August.
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Markets: UK indices have made strong gains Wednesday morning ahead of the US Federal Reserve decision after the close of trading.
"It is the commitment to low interest rates that is maintaining calm, and expectations are for a doveish Fed decision that will assuage fears about a premature rate hike," says IG analyst Brenda Kelly.
US stock futures are pointing to a mixed start on Wall Street, with the DJIA set to open up 0.1%, the S&P 500 flat, and Nasdaq Composite 0.4% lower after the Facebook CEO pointed to a tougher fourth quarter after it beat third quarter estimates.
FTSE 100: up 0.7% at 6,448.59
FTSE 250: up 0.7% at 15,232.63
AIM ALL-SHARE: up 0.4% at 715.12
GBP-USD: down at 1.6115
EUR-USD: flat at 1.2732
GOLD: down at USD1,227.87 an ounce
OIL (Brent): up at USD87.07 a barrel
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Other Top UK Corporate News
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Antofagasta said it remains on track to hit its production targets for the full year, despite reporting reduced gold and copper production during the third quarter. During the quarter ended September 30, copper production decreased by 5% to 169,200 tonnes compared with 178,800 tonnes in the second quarter. The decrease was caused by lower throughput of concentrates from Los Pelambres and Centinela in Chile. Gold production during the quarter fell by 3.4% to 64,700 ounces compared with 67,000 ounces of gold produced in the previous quarter, also caused by lower throughput of concentrates at Centinela due to planned maintenance work.
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The pace of Standard Life growth in the near term may be hit by difficult investment conditions, Chief Executive David Nish warned, as the FTSE 100 long-term savings and investments company reported a rise in assets under administration in the first nine months of the year. "Although investment markets are unsettled and may affect the near-term pace of asset and revenue growth, we are very well placed for the future," Nish said in a statement. It also said the big changes in annuity regulations in the UK resulted in a reduction in UK annuity sales of 55% in the the first nine months of the year, with third-quarter sales down 67%. Group assets under administration from continuing operations rose to GBP290.0 billion at the end of September, from GBP214.7 billion at the start of January. The increase was driven by GBP4.3 billion of net flows and the acquisition of Ignis Asset Management.
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British Sky Broadcasting said it has invested USD7 million in Whistle Sports and the companies will work together to create new content for younger sports fans, particularly those born after the millennium. The investment is the latest in a string of investments that BSkyB has made in start-up companies in recent months, as it looks to try and identify growing trends in online and new media content and be at the forefront of that coverage.
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Stagecoach Group kept its full-year guidance, saying its overall profitability had remained "satisfactory". The bus and rail operator said like-for-like revenue growth for the 24 weeks ending October 12 rose 3.2% in its UK regional bus operations, 14.5% in its London bus operations, 7.4% in UK rail, 3.5% at its North American operations and 5.8% in its Virgin Rail joint venture. In a trading update before the company holds a series of meetings with analysts, it said there are a number of challenges to growing profit in the financial year ending April 30, 2015, but overall current trading is satisfactory and it is on course to meet its expectations for the year.
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Specialty chemicals group Johnson Matthey agreed a deal to buy the Energy Storage arm of Swiss chemicals company Clariant AG for USD75 million, and expects the deal will close in early 2015. The Energy Storage business is the largest hydrothermal lithium iron phosphate producer in the world. The lithium ion cathode material is used in electric vehicles and stationary battery applications.
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BAE Systems has said the US Air Force has halted some initial work being undertaken by the company on a project to upgrade South Korea's F-16 fighter jets amid ongoing talks regarding the second phase of the project, Reuters reported. Brian Roehrkasse, a spokesman for the FTSE 100 defence and aerospace company, said it remains "concerned about the lack of progress in the negotiations between the Republic of Korea and the US Air Force on the KF-16 upgrade programme that has now resulted in a partial stop work order".
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Riverstone Energy said its net asset value increased over the third quarter, buoyed by valuation changes for its investments in Fieldwood and Canadian International Oil Corp, and it has now committed over half the capital it raised in its recent initial public offering. Its net asset value stood at USD1.15 billion on Sepetmber 30, up from USD1.14 billion at the end of June, and its net asset value per share had increased to USD16.19, from USD16.00. It swung to a USD13.4 million profit in the third quarter, compared with the USD2.4 million loss it posted in the first half of the year.
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Tullett Prebon said it is continuing to cooperate with the UK's Financial Conduct Authority and other regulators in the ongoing Libor probe as it noted the Serious Fraud Office charges against one of its former employees. The UK Serious Fraud Office on Tuesday said it has issued criminal proceedings against Noel Cryan, a former employee of Tullett, accusing him of conspiring to commit fraud between February 1, 2009 and December 3, 2009.
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Real estate investment trust Redefine International raised its dividend for its last financial year as earnings available for distribution rose by nearly 30%, helped by increased occupancy in its portfolio and higher portfolio values. The trust, which is converting to become a UK-focused REIT, said it will pay a second interim dividend of 1.70 pence for the year to August 31, bringing the total dividend for the year to 3.20 pence, up from 3.11 pence a year earlier. Its earnings available for distribution rose to GBP39.1 million, from GBP30.1 million.
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Shares in C&C Group were down after the Irish drinks company said pretax profit in the first half fell despite a rise in revenue, as it was hit by rises in excise duties, an increase in operating costs and tumbling US cider sales. Pretax profit for company, which makes Magners cider and Tennent's lager, was down to EUR64.3 million in the half year to August 31, from EUR66 million a year earlier, despite a rise in revenue to EUR528 million from EUR486.4 million.
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Quartix Holdings said its selling shareholders raised GBP11.4 million in a share placement and it expects to be admitted to London's AIM market in November. Quartix, which supplies vehicle tracking systems, will have an initial market capitalisation of GBP54.1 million, based on the placing of 9.8 million shares at a price of 116 pence a share, the company said. FinnCap acted as adviser and broker in the placing and share trading on AIM is expected to start November 6.
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AIM Movers
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Image Scan Holdings shares are doing well after it signed a two-year deal with Sectus Technologies for the distribution of its X-ray products in Canada, the Caribbean and in Central and South America. Victoria Oil & Gas is up after saying it has successfully laid 678 metres of gas pipe under the Wouri River in Cameroon, which will be connected to the first customers in the area once testing has been completed. Following the extension to the network by Gaz du Cameroun, three customers are now signed up with gas supply agreements in place, Victoria said. Forum Energy is also up after revenue jumped in the first nine months of the year on the back of the start of production at the Galoc oil field. Photonstar LED Group is a big faller after it warned on its full-year outlook, saying it expects revenue to be below market expectations on the back of weak sales of its fixed white lighting products and its light engines. SacOil Holdings is also down after it warned it expects its earnings per share to drop heavily in the first half on the back of currency fluctuations and impairment charges.
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Top Economics And General
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UK mortgage approvals declined to the lowest level since July 2013, the Bank of England said. The number of mortgages approved for house purchases decreased to 61,267 in September from 64,054 in August. This was the lowest level since July 2013. It was forecast to fall to 62,000. Total lending to individuals increased by GBP2.7 billion, smaller than last month's GBP3.2 billion increase. Within this, secured lending rose GBP1.8 billion versus GBP2.2 billion growth a month ago. Similarly, consumer credit increased by GBP0.9 billion after rising GBP1 billion in August.
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UK economic growth slowed in the three months to October, but remained relatively solid, the latest growth indicator from the Confederation of British Industry showed. The growth indicator balance fell to 19% from 23% seen in the prior month. Looking ahead to the next quarter, businesses are predicting slightly stronger growth of 25%, similar to the pace expected in September.
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French consumer confidence remained unchanged in October, survey data from the statistical office Insee showed. The consumer sentiment index came in at 85, unchanged from September. Economists had expected the index to remain at September's initial score of 86. Households' opinion of their future financial situation was stable. The corresponding index held steady at -21 in October.
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None of the 2015 budgets drafted by eurozone countries are in blatant violation of EU rules, the bloc's executive said Tuesday, despite concerns surrounding France and Italy's spending plans. Paris and Rome had on Monday moved to assuage EU concerns, offering further savings in their budgets. "I cannot immediately identify cases of 'particularly serious non-compliance' which would oblige us to consider a negative opinion at this stage in the process," EU Economy Commissioner Jyrki Katainen said in a statement. France and Italy, the currency bloc's second and third-largest economies, had faced mounting pressure over the last few weeks given that their budgets were widely expected to run afoul of EU rules.
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Ukraine on Tuesday accused Russia of whipping up tensions in the country's east by supporting "illegal" elections in separatist-held territories. "The holding of any vote on Ukrainian territory by the so-called Donetsk and Luhansk people's Republics will hinder the peace process," Foreign Ministry spokesman Yevhen Perebyinis said in Kiev, according to local news agencies. Russian Foreign Minister Sergei Lavrov said earlier that Moscow will recognize the November 2 elections, saying that they are an important step to legitimizing the separatists.
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China's consumer sentiment decreased in October, results of a survey by MNI and Westpac showed. The Westpac-MNI consumer sentiment index fell to 110.9 in October from 113.2 in September. In August, the index was at 113.3.
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China should reserve its sizeable policy buffers to maintain macroeconomic stability in case of unexpected domestic or external economic shocks, the World Bank said in its China Economic Update. The bank said that a focus on meeting ambitious growth targets would require more expansionary macroeconomic policies.
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Industrial output in Japan added a seasonally adjusted 2.7% on month in September, the Ministry of Economy, Trade and Industry said in a preliminary reading. That beat forecasts for an increase of 2.2% following the 1.9% contraction in August. On a yearly basis, industrial production added 0.6% - again beating forecasts for a decline of 0.1% following the 3.3% drop in the previous month.
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The Ebola outbreak in West Africa requires at least 5,000 additional health workers, World Bank President Jim Yong Kim said Tuesday. "Health workers are critical. We need 5,000 health workers who must rotate," Kim said in Addis Ababa at a press conference with UN Secretary-General Ban Ki-moon and African Union chairwoman Nkosazana Dlamini-Zuma.
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US President Barack Obama says the US should not institute quarantines or other policies that would discourage health care workers from traveling to West Africa to fight the Ebola outbreak. Doctors and nurses who volunteer to work in West Africa should be "applauded, thanked and supported," Obama says at the White House, after speaking with a US Agency on International Development team in West Africa, amid disagreement with local officials in the US over whether returning health care workers should be forced into quarantine.
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Kurdish Peshmerga fighters and heavy weapons from Iraq arrived in Turkey on their way to the northern Syrian town of Kobane, where fighting by local Kurdish forces against the Islamic State militia is ongoing. The Peshmerga will be backing up the Kurdish Syrian fighters, who have been battling against the jihadists since September for control of the besieged town. Idriss Nassan, a Syrian Kurdish official, told dpa that at least 50 fighters from the Free Syrian Army, a rebel group, were also set to join the Kurdish fighters inside the town.
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A former top Chinese army general has confessed to accepting "extremely large" bribes and military prosecutors are preparing a criminal case against him, state media said on Wednesday, as the ruling Communist Party vowed to toughen anti-corruption systems. The procuratorate of the People's Liberation Army had started filing its case against Xu Caihou, a former vice-chairman of the Central Military Commission, following his expulsion from the party in June, the official Xinhua news agency and other media said.
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Afternoon Watchlist (all times GMT)
14:30 US EIA Crude Oil Stocks change
18:00 US Fed Interest Rate Decision
18:00 US Fed's Monetary Policy Statement
23:50 Japan Foreign stock/bond investment
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Thursday's Key UK Corporate Events
Alumasc Group - Interim Management Statement
Kazakhmys - Interim Management Statement
Royal Dutch Shell - Q3 Results
Barclays - Interim Management Statement
Genel Energy - Interim Management Statement
Afren - Interim Management Statement
BT Group - Half Year Results
Henderson Group - Interim Management Statement
J Smart and Co - Full Year Results
Smith & Nephew - Q3 Results
Millennium & Copthorne Hotels - Q3 Results
Aviva - Interim Management Statement
St James's Place - Interim Management Statement
National Express Group - Interim Management Statement
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Thursday's Key Economic Events (all times GMT)
n/a UK Nationwide Housing Prices
08:55 Germany Unemployment Rate
10:00 EU Consumer Confidence
10:00 EU Economic Sentiment Indicator
12:30 US Gross Domestic Product Annualized Preliminary
12:30 US Jobless Claims
12:30 US Personal Consumption Expenditures Prices
13:00 Germany Consumer Price Index
14:30 US EIA Natural Gas Storage change
23:30 Japan National Consumer Price Index
23:30 Japan Overall Household Spending
23:30 Japan Unemployment Rate
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26 Oct 2022 14:39
TRADING UPDATES: Ecora expects to profit off softer commodity prices
(Alliance News) - The following is a round-up of updates by London-listed companies, issued on Wednesday and not separately reported by Alliance News:
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