Wednesday Update

DB Live: Wm Hill; L&G; WH Smith; FNZ stalled; Metro Bank

4.45pm: London close

Traders were encouraged by US stimulus and coronavirus vaccine hopes to push the FTSE 100 higher. The index closed up 68.72 points (1.14%) at 6,104.72.

4pm: Beirut death toll rises

The death toll in Beirut has reached 135 following the huge explosion which devastated the port area of the Lebanese capital.

President Michel Aoun said the blast was caused by 2,750 tonnes of ammonium nitrate stored unsafely in a warehouse.

He announced that the government would release 100 billion lira (£50.5m) of emergency funds but the impact of the blast on the economy is expected to be long-lasting.

1pm: New St James food hall

A new artisanal food hall featuring local produce will be launched at Edinburgh St James.

Bonnie & Wild’s new concept include fresh and packaged food and drink from a variety of specialist food suppliers.

It will occupy 16,600 sq ft on the 4th floor of the new mall and will be designed by Studio Duncalf.

Noon: Tory leader

Douglas Ross has been confirmed as the new Scottish Conservative Party leader after no further nominations were received.

10.30am: M&Co confirms store closures

Fashion company Mackays, trading as M&Co, has confirmed the closure of 47 stores in a financial restructuring that will save most jobs.

Full story here

10am: WH Smith axes 1,500 posts

WH Smith (pic WH Smith)

WH Smith is to cut 1,500 jobs as it warned that it will post a full-year loss of £75m.

The retailer said it is reviewing its store operations across its travel stationery businesses because of lower footfall and a sharp drop in travellers.

8.15am: London open

The FTSE 100 rose in early trading as US Democrats and the White House appeared to favour a new stimulus deal.

London’s blue-chip index was 61 points or 1% higher at 6,097.18.

7.50am: Insurer Hastings acquired

Motor insurer Hastings has agreed to a £1.66 billion takeover by Finland’s Sampo and South Africa’s Rand Merchant Investment.

The cash offer comprises 250 pence a share plus an interim dividend of 4.5p a share, delivering a higher premium than expected after the companies said on 29 July they were in talks on a possible offer.

Hastings has nearly three million customer policies and an 8.1% market share.

7am: Legal & General profits plunge

Insurance company Legal & General reported a plunge in profit in the half of the year as increased claims related to Covid-19 and lower interest rates weighed on performance.

For the six months ended 30 June, pre-tax profit fell 73% to £285m on-year, with the company estimating Covid-19 related events reduced operating profit by £129m.

Operating profit at its insurance business fell by 34% to £88m, reflecting increased claims experience due to COVID-19, and a fall in interest rates, which reduced the discount rate used to calculate reserves.

Legal & General investment management saw assets under management rise 4% to £1.24bn.

The interim dividend was unchanged at 4.93p per share.

The company is a big investor in Edinburgh University research into financial services and has announced a development plan for Debenhams’ Princes Street store.

FNZ stalled

The UK’s Competition and Markets Authority has provisionally blocked Edinburgh-based FNZ’s proposed takeover of rival retail investment platform GBST, concluding that it could lead to higher costs and lower quality services for Brits.

FNZ bought GBST in November 2019 for £150 million. Both firms have a significant presence in the UK, holding close to 50% of the market between them.

The CMA says that although there are differences in the business model that the companies use – with FNZ providing an integrated software and servicing solution and GBST being a software-only provider – they compete closely in a concentrated market in which there are few other significant suppliers.

Martin Coleman, chairman of the CMA inquiry group, says: “The evidence we’ve seen so far consistently points in the same direction – that FNZ and GBST are two of the leading suppliers within this market and compete closely against each other.

“That’s why we’re concerned that their merger could lead to investment platforms, and therefore indirectly millions of UK consumers who hold pensions or other investments, facing higher fees and lower quality services.”

Betting shops close, furlough repaid

Blair House, Musselburgh

Bookmaker William Hill says 119 shops will not re-open following the COVID-19 impact on the UK retail environment with minimal cost of closure.

However, the betting chain said it had experienced strong trading before COVID-19, effective cost control during lockdown and a good recovery post-lockdown.

“In light of this positive trading environment, the board feel it is appropriate to repay the Furlough Funds received, amounting to £24.5m, and we will not be claiming the Job Retention Bonus,” it said in its half-year statement.

Net revenue for the six months to the end of June was down 32%, driven by COVID-19 disruption to sporting events and temporary closure of retail activities, partially offset by favourable sports results and a resilient gaming performance.

Online net revenue increased 1%, driven by successful product launches, growth in International and a progressive resumption of sports events post-lockdown

Adjusted operating profit of £11.8m was ahead of expectations due to swift actions to control costs and deliver new online content

Statutory operating profit of £148.5m includes recognition of a £201.6m VAT refund, offset by an £81.9m non-cash intangible impairment of the UK retail estate reflecting the revised UK high street outlook.

“The business has traded well since mainstream sport resumed and our UK shops have re-opened and we are encouraged by the early indications,” said the company

Metro Bank in loss

Provisions to cover loan losses caused by the coronavirus saw Metro Bank swing to a loss.

The challenger bank, whose shares have collapsed since it disclosed an accounting scandal in January last year, reported an underlying loss of £240 million for the six months ended June from a £3.4m profit a year earlier.

On Monday the bank said it has agreed to buy peer-to-peer lender RateSetter for an initial payment of £2.5m.

Today’s agenda

* Douglas Ross, the MP for Moray, is expected to be confirmed as the new leader of the Scottish Conservative Party

* Alok Sharma, the UK Business Secretary, visits the Livingston plant of medical research firm Valneva

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