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John Lewis cuts bonus, Co-op, Morrisons, Aviva

John LewisJohn Lewis Partnership: The department store and Waitrose supermarket group has cut its staff bonus to 6% of annual salary compared with 10% last year.

Chairman Sir Charlie Mayfield said in the firm’s annual report: “This allows us to maintain our level of investment in the face of what we expect to be an increasingly uncertain market this year, while absorbing the costs associated with adapting the Partnership for the future.”

He said pricing pressures from the fall in the pound and the shift from shops to online were “significant factors” for the retailer.

Aviva: The insurance giant topped the blue-chip board in early trading after operating profits and dividends rose by 12%.

The group has taken a hit from the change in the Ogden discount which is used to calculate personal injury claims and after-tax profits were down by 22%.

However, chief executive Mark Wilson said: “For us it doesn’t impact profits in the longer term too much, but.. it’s certainly disjointed policy-making. It’s a bit disappointing.

“What I am delighted with is the government has recognised that the rate isn’t sustainable, there’s no other country in the world that does it like this, and the people that get hurt are young drivers and old drivers, and that can’t continue.”

The overall trajectory is up, says Russ Mould of A J Bell, with the prospect of more to come.

Aviva is planning a capital return to shareholders and debt reduction this year and will invest further to grow its businesses. Aviva’s shares were up by more than 5.8%.

Nicholas Hyett, from Hargreaves Lansdown, said: “Steady profit growth and plenty of capital generation mean the group can start funnelling cash back to investors or fund new expansion as management sees fit.”

Co-op Bank: The Co-op Bank, which recently put itself up for sale, has reported an annual loss of £477 million, an improvement on the £610m loss in 2015.

It blamed the latest loss on low interest rates and costs related to the purchase of Britannia Building Society.

The bank said it will seek to raise up to £750m of additional core capital if its plan to sell itself fails.

The bank has not made a profit since 2011 and has struggled to rebuild its capital position after being rescued from the brink of collapse by a group of hedge funds in 2013.

MorrisonsMorrisons: The supermarket chain saw full-year pre-tax profits rise by 11.6% to £337m but investors were more focused on the supermarket group’s warning about the combined impact of a weaker sterling, depreciation and pension costs.

Morrisons is confident its turnaround will continue despite uncertainties ahead, especially around the impact on imported food prices if sterling stays at lower levels as this and the expected increase in depreciation and pension costs have been factored into its plans. Morrisons shares fell by about 5% in early trade.

Morrisons said it has identified further cost savings beyond the £1 billion already achieved.

Countrywide: The estate agency’s shares fell after pre-tax profits slumped and it unveiled plans to place up to 21m new ordinary shares to give it additional financial flexibility.

Uncertainty following the EU referendum result and stamp duty changes have had a significant impact on the property market and Countrywide will use proceeds from the placing to accelerate its digital rollout and unlock further cost savings. Countrywide’s shares were down by more than 8.1% in early trading.


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