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Wednesday Update

DB Live: B&Q lockdown lift; Stagecoach sees long term change

4.45pm: London close

The FTSE 100 closed 62.62 points (1%) lower at 6,207.10 amid renewed fears of US-China tensions.

Melrose Industries shares slid 14% after the industrial turnaround specialist said revenue fell 27% year-on-year in the first half 2020 and said it is likely to make a “small” adjusted operating profit for the period. The firm is highly exposed to the aerospace and automotive sectors.

Topping the blue-chip index was Fresnillo, up 9.6% with the gold miner tracking the price of the precious metal higher.

B&Q owner Kingfisher staged a double-digit percentage gain, shares rising 15% after the DIY retailer reported strong second-quarter trading figures (see below).

1pm: Daily Briefing

Sturgeon: I have no plans to meet the Prime Minister during his visit to Scotland tomorrow

Sturgeon: Think carefully about overseas travel

Sturgeon: Working from home remains the “default position”

Full story

11.30am: Nichols returns to dividend list

Soft drinks maker Nichols’ declaration of a 28p-per-share interim dividend means the firm will become the fourth in the UK to re-join the dividend list, following Focusrite, Palace Capital and Land Securities, having cancelled a previous payment.

Nichols had scrapped its proposed final dividend for 2020 in March.

Russ Mould, AJ Bell investment director, says:  “Land Securities has yet to confirm how much it will pay, and the other three have proposed dividend payments worth just £13 million in total (compared to £33bn in cancellations, suspensions, deferrals or cuts across the UK market so far in 2020), but income-seekers will be hoping that this is a case of ‘from little acorns do mighty oaks grow.’”

11.15am: Lawyer speaks out against ‘alienating’ turnover

Clients and recruits care more about how a firm performs than they do about turnover and pay, according to a top lawyer at Pinsent Masons as the firm unveils annual figures.

Full story here

10am: New distillery for West Lothian

Plans have been announced for a malt distillery on the historic Hopetoun Estate near Queensferry.

Full story here

8am: University acquires space

Glasgow University has acquired space for researchers and staff in the city’s West End.

Full story here

7am: B&Q sees strong demand

B&Q store

B&Q owner Kingfisher said it expects interim pre-tax profits to be higher as strong demand continued across its markets after the lifting of coronavirus lockdowns. It withheld guidance because of the continued uncertainty.

Group second quarter like-for-like sales to 18 July rose 21.6% as lockdown eased. For the year they declined 3.7%.

“Based on the strong sales seen to date in Q2, combined with cost reductions benefiting H1 (some of which are non-recurring), the company anticipates its half year adjusted pre-tax profit to be ahead of prior year,” the company said on Wednesday.

“While we are entering the second half with a favourable trading backdrop, second half visibility remains low given uncertainty around Covid-19 and the wider economic outlook. As such, no specific financial guidance is provided for full year 20/21.”

Stagecoach sees long term change

Stagecoach

Bus operator Stagecoach does not see passenger numbers returning to pre-COVID-19 levels for some years with permanent changes expected in travel patterns.

People working from home, online shopping, telemedicine and home education will all have a long-term impact on the number of journeys.

The company is undertaking a further review of its cost base to reduce overheads.   

Martin Griffiths, Stagecoach chief executive, said:  “We have achieved a creditable set of financial results in what has been one of the most challenging and sobering periods for citizens, communities and economies across the globe in living memory.”

Revenue from continuing operations for the year to 2 May was £1.4 billion (2019: £1.87bn).  The lower revenue reflects the end of the Virgin Trains East Coast franchise in June 2018 and the end of the East Midlands Trains franchise in August 2019.

Adjusted total operating profit from continuing operations was £119.7m (2019: £161.3m).  There is no recommended dividend.

6.30am: China rises

China stocks were buoyed by Beijing’s capital market reforms, recovering from a trough hit last week because of worries over policy tightening and foreign outflows.

The Shanghai Composite Index gained 1.2% to 3,360.78.

Today’s agenda

Royal Bank of Scotland is renamed NatWest Group, although the customer facing brands are unchanged.

Chief executive Alison Rose said: “The bank has changed fundamentally over the last decade and now is the right time to align our Group name with the brand under which the majority of our business is delivered.”

Branches and banknotes continue to carry the RBS name which will also remain on the Gogarburn headquarters.

The change was announced in February.

Catch up: Mealy-mouthed claims over RBS name change do nothing for trust

Today’s top Daily Business headlines

Firms in ‘first gear’ and retail still in ‘doldrums’

Britain likely to walk away from EU trade deal

Treasury tax receipts ‘almost back to normal’

Builders ‘frustrated’ by ongoing planning delays

Maxwell calls for test crowds as SFA faces £6m hit



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