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Monday Update

DB Live: Wall St leaps; Diageo improves; Wm Hill bid firms

Traders on Wall St (pic: NYSE)

9.30pm: Wall Street leaps

Wall Street jumped as investors cheered progress in negotiations over the next coronavirus stimulus bill.

The Dow Jones Industrial Average was up 1.5%, more than 400 points, while the S&P 500 rose 1.6% and the tech-heavy Nasdaq Composite gained 1.9%.

4.30pm: London shrugs off virus concern

Friday’s rebound extended into the new week as traders cast aside worries about the virus and new movement restrictions. The FTSE 100 closed 85.26 points (1.46%) higher at 5,927.93. The FTSE 250 was up 1.9%.

The blue chip index rose despite sterling also rising to $1.2855 at the close of the LSE, up from $1.2700 at the close on Friday.  

Diageo shares rose 6.1% after the Johnnie Walker whisky maker said it has made a good start of its financial year.

William Hill sank 12% – coming off a 43% surge on Friday – after US joint-venture partner Caesars Entertainment confirmed that it has made a possible £2.9 billion offer for the bookmaker. 

1.30pm: Pizza Hut rescue

Pizza Hut’s landlords have agreed to reduce rents on its restaurants after voting through a Company Voluntary Arrangement (CVA), the company confirmed.

Landlords and creditors voted in favour of the CVA, an insolvency process which will see them take a cut on future bills to keep the company from going bust.

The deal means 29 Pizza Hut restaurants will shut, with 450 jobs at risk, while a further 215 will keep trading, saving 5,000 jobs. Takeaways are not affected.

8.15am: London opens higher

London’s blue-chip index rose on the back of Asian markets moving ahead amid signs that China’s economic recovery was gaining momentum. 

The FTSE 100 was trading 89 points higher at 5,931.73.

8am: Ball volunteers pay cut

BBC presenter Zoe Ball has asked the BBC to pay her less because she feels ‘uncomfortable’ with a £1million pay rise.

Full story here

7am: Diageo outlook improves

Drinks group Diageo said its outlook for the first half of this financial year had improved after a good start and especially in the US.

Diageo CEO Ivan Menezes

Sales improved compared to the second half of last year but sales and margins in the six months to the end of December will be lower than first half of last year.

Ivan Menezes, chief executive of the Johnnie Walker, Smirnoff and Gordon’s Gin group, said off-sales had remained robust while most on-trade outlets had now reopened.

“Our US business is performing strongly and ahead of our expectations, reflecting resilient consumer demand and the spirits category continuing to gain share within the total beverage alcohol market,” he said in a statement ahead of the FTSE 100 group’s AGM.

In August Diageo reported a near-halving of annual profit and the company took a £1.3bn impairment charge on the value of some operations.

Mears sells care business

Housing provider Mears has completed its exit from domiciliary care, with the £2m disposal of its Scotland Domiciliary Care business to Cera Care Operations, which also acquired its England and Wales Domiciliary Care business.

There is a further £0.5m of deferred consideration 12 months after completion.

For the year ended 31 December, SDC generated revenues of £21.7m and a profit contribution, after an allocation of support costs, of around £0.6m.

Bookmaker odds on to do deal

William Hill and Caesars Entertainment confirmed they are in advanced talks on a £2.9bn cash offer for the UK bookmaker.

Caesars is expected to offer 272p per William Hill share, a premium of around 57.6% to the closing price 172.55p on 1 September, the last business day before Caesars’ first approach.

LV= confirms takeover talks

LV= confirmed it is in talks with “a number of parties” for a potential transaction.

The statement by the insurer was made in response to weekend reports that Royal London could be days away from sealing a £500 million takeover of its smaller peer.

Royal London in £500m pursuit of LV=

Reach profits slide

Daily Record and Express newspapers group Reach said profits fell in the first half but the company is currently performing “materially ahead of market expectations”.

Full story here

Markets

The FTSE 100 looks set to open higher, taking its cue from Asia’s main markets which have made a strong start to the new week.

China has reported a fourth consecutive month of profits growth in its industrial sector, suggesting the world’s second-largest economy is overcoming the challenges of coronavirus.

Asia Pacific markets were mostly positive with Japan’s Nikkei 225 adding 0.64% and South Korea’s Kospi rising 1.48%

Mainland Chinese stocks lagged, with the Shanghai composite down 0.03% while Hong Kong’s Hang Seng index rose 0.98%.

Social housing report

A new report calls for government commitment to building more than 35,000 homes for social rent by 2026.

The report, titled “A new economic case for social housing” is based on economic modelling from the Scottish Policy Foundation and the Fraser of Allander Institute at the University of Strathclyde.

Commissioned by Shelter Scotland, it concludes that an investment in social housing could yield billions in return to Scotland’s economy.

Today’s top Daily Business headlines

Negative interest rate looms to help economy

Burness Paull overcomes lockdown to lift profits

Royal London in £500m pursuit of LV=



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