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Wednesday Update

DB Live: Standard Life staff plan; restaurants to close

10.30pm: US closes higher

Wall Street rallied with the Nasdaq approaching record highs as investors look beyond US social unrest and pandemic worries.

Financials, industrials and tech stocks pushed the three major indexes higher. The S&P 500 and the Nasdaq each posted their fourth straight day of solid gains.

A spate of grim economic data was not as bad as economists feared.

The Dow Jones rose 2.06%, while the S&P 500 gained 1.36% and the Nasdaq Composite climbed 0.76%.

Boeing Co gave the biggest boost to the blue-chip Dow following news that billionaire investor Daniel Loeb’s Third Point had taken a stake in the company.

10pm: Frankie & Benny’s closures

Almost half of the Frankie & Benny’s restaurants will not reopen after the lockdown is lifted – creating 3,000 job losses.

Between 100 and 120 restaurants will close, with those on retail parks expected to be the most vulnerable.

Owner The Restaurant Group (TRG) last year announced it would close 150 outlets by 2025, but the pandemic has brought forward that plan.

4.45pm: London market

The FTSE 100 scored a triple-digit gain as the index closed higher for the third day in a row.

The blue-chip benchmark  finished 162 points (2.61%) higher at 6,382.

The top gainer was British Airways owner International Consolidated Airlines Group, up 11% at 279.2p despite a warning that it may lose slots at Heathrow (see below).

2pm: BA Heathrow threat

British Airways could lose some of its lucrative Heathrow slots because it is cutting jobs while receiving tens of million of pounds of taxpayers’ money for furloughed staff.

Aviation minister Kelly Tolhurst is reviewing slot allocations at the UK’s busiest airport after the airline announced plans to slash 12,000 jobs.

She told the Commons: “We want airport landing and take-off slots to be used as effectively as possible for UK consumers as the UK aviation market recovers from the impacts of this terrible disease.

Home Secretary Priti Patel confirmed that a 14-day quarantine for passengers arriving in the UK will come into effect on Monday.

1.45pm: SPFL Sky Sports deal

The SPFL and Sky Sports have agreed terms that provide an ‘innovative’ framework for the Premiership to resume.

Full story here

1pm: Mortgage extension

Scottish Building Society has pledged that mortgage holders will not be at risk of losing their home over the next 12 months.

Full story here

11.50am: Rolls-Royce jobs blow

Rolls-Royce has today announced that 700 jobs are to be axed at its Inchinnan factory near Glasgow Airport.

Full story here

11.45am: Germany lifts travel ban

Germany will lift its travel ban for European Union member states as well as for Britain, Iceland, Norway, Liechtenstein and Switzerland from 15 June as long as there are no entry bans or large-scale lockdowns in those countries, the foreign minister said.

11.40am: Oil price high

A barrel of oil touched $40 for the first time since March today amid hopes of an extension to production cuts.

There were hints that it would hit this level earlier this week ahead of tomorrow’s meeting of the Opec oil producing countries.

President Donald Trump said after the last round of cuts that there would be more to come.

11.30am: Card payments milestone

RBS fingerprint card

Card and contactless payments last year accounted for more than half (51%) of all payments in the UK for the first time.

Full story here

10.30am: London airport to re-open

Domestic flights will return to London City Airport by the end of this month.

International flights will restart early next month although the timing is dependent on the proposed quarantine of passengers arriving into the UK, said the airport in a statement.

The airport in the east end of London, regularly used as a connection to the City and Canary Wharf, has been closed to commercial and private flights since 25 March.

9am: Late payment reprieve

Five companies previously suspended from the Government’s Prompt Payment Code have been reinstated.

BT, IBM, Kier Highways, Screwfix and Seddon Construct all improved payment practices and proactively engaged with compliance officers, submitting plans on how they intend to meet the code’s standards.

8.15am: London open

Traders followed Asian markets higher on renewed optimism over China and the broader economy. The FTSE was 65 points (1.05%) higher at 6,285.15

7am: Tennent’s sees rise in off-trade sales

Total volumes at Tennent’s in Scotland during the April-May lockdown were down 42% while off-trade business rose 41% as brewers adjusted to the shift in consumption.

In a statement with annual results, Stewart Gilliland, interim executive chairman of parent group C&C Group, said: “The ongoing closure of the hospitality sector has material implications for our business and earnings potential, with approximately 80% of our revenue derived from the on-trade channel.

“An emerging trend from this shutdown however has been an immediate shift in consumption dynamics, resulting in increased demand in the off-trade channel. To capitalise on this behavioural shift, we have reallocated resources behind our Take-Home proposition and seek to optimise our business model in this channel.”

Operating profit for the year to end February rose 10.4%. The final dividend is suspended to conserve cash. The company said it was currently burning through £6m a month.

In Scotland, beer volumes performed worse than the wider GB market, declining by 1.7%. Value outperformed in Scotland, increasing by 1.3%.

Vertu sees deal opportunities

Robert Forrester, chief executive of car dealer group Vertu hinted at acquisitions as the sector recovers from the lockdown.

In a statement with its annual results, he said: “Due to the progress made in FY20, our financial strength, omnichannel capabilities, trusted relationships with manufacturers and strong team and culture, we will emerge from this crisis with an improved market share as the competitive landscape evolves and attractive consolidation opportunities emerge.”

Profit before tax fell from £25.3m to £7.3m while adjusted profit before tax came in at £23.5m in line with expectations, despite absorbing costs and losses of £0.7m in relation to recent acquisitions (2019: £23.7m). No final dividend is recommended.

6.45am Standard Life Aberdeen staff told ‘work from home’

Standard Life Aberdeen has told most of its 4,900 staff to work at home until the end of the year.

“While we are planning for a small number of colleagues to return to office working over the coming months, we have decided that the majority of UK colleagues should continue to work remotely until the end of the year,” Mike Tumilty, chief operating officer, wrote in an internal memo.

“One of the consistent messages across the UK is that, where possible, people should work from home if they can.”

6.30am: Travelodge overhaul

Travelodge will launch a radical overhaul of its business today in a bid to force landlords to swallow rent cuts of more than £140m, according to City sources.

The beleaguered hotel firm is hiring accountant Deloitte to oversee a company voluntary arrangement (CVA) with creditors, marking the latest twist in an acrimonious battle between Travelodge’s hedge fund shareholders and the owners of its hotel sites.

6.30am: London to open higher

The FTSE 100 is expected to open higher following strong data on the Chinese economy.

Spread-better IG expects the blue chip index to add around 66 points at open after ending Tuesday’s session up 54 points at 6,220.

Investors are encouraged that the world’s second largest economy continued to rebound from its lockdown earlier in the year.

Asian shares leapt to a near three-month high as hopes of more stimulus and further easing in social restrictions around the world outweighed caution over a host of worries from the coronavirus to growing US civil unrest.

FTSE reshuffle to be announced

British Gas

Scottish and British Gas owner Centrica, budget airline Easyjet, cruise firm Carnival and components company Meggitt will be ejected from the FTSE 100 this month after their shares were badly hit by the lockdown.

The biggest shake-up of the blue-chip index since 2016, will see them relegated in the latest quarterly reshuffle to be announced today.

They will be replaced by cyber security firm Avast, Ladbrokes parent GVC, B&Q owner Kingfisher and the emergency repairs firm Homeserve.

The reshuffle takes place on 22 June and is based on last night’s closing prices. A stock is relegated from the index if it is no longer one of the 110 most valuable listed companies on the stock exchange.

Those FTSE 250 firms that rise to 90th or above are automatically promoted.

The last reshuffle in March showed the growing difficulties in he tourism industry with the exit of European holiday company TUI.

British Airways owner IAG and InterContinental Hotels Group is expected to remain as a travel industry representative while Premier Inn owner Whitbread is edging closer to departure.

5am: Zoom rockets

A surge in homeworking around the world has seen revenue and customer forecasts rocket at Zoom Video Communications, a company few had heard of three months ago.

Full story here

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