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Tuesday Update

DB Live: EasyJet; JD Sports; Royal Mail; retail update

4.30pm: Markets

London’s index of blue-chip shares was struggling to get back into positive territory amid speculation over the direction of the Brexit talks.

The FTSE 100 closed at 5,930.30 −7.10 (0.12%), off its low of 5,869.

The pound fell by well over a cent to $1.3049 while against the euro it was down by just under a cent at €1.1062.

1pm: Scotsman back on market

The owner of The Scotsman is to make a renewed attempt to sell the company as pressure grows on newspaper revenues.

Full story here

12.45pm: Pound falls on legal expert’s resignation

The pound fell by almost 1% after a report that one of the government’s most senior legal experts had resigned over Downing Street proposals to challenge parts of the 2019 Brexit Withdrawal Agreement.

Sir Jonathan Jones – Treasury solicitor and permanent secretary of the Government Legal Department – resigned, according to the Financial Times, after plans were put forward by prime minister Boris Johnson that would enable the UK to backtrack on parts of the Withdrawal Agreement, including the Northern Ireland protocol.

With trade talks between the UK and EU resuming today, news of Sir Jonathan’s resignation Jones’s unsettled the pound. It dropped to its lowest point against the dollar since 25 August, down 0.93% at $1.3044 at 1230 BST, while against the euro was 0.84% lower at €1.1051.

12.35pm: Daily Briefing – Hospitality call

“I don’t want to go back and close hospitality again,” says First Minister, noting the effects of “economic catastrophe”.

She advises against staying in pubs which are overcrowded, and to avoid going from one pub to the next to reduce risk of transmission.

“There is clearly a responsibility for individuals here,” she says.

11am: STATS profits fall

Pipeline technology specialist STATS (UK) said pre-tax profits for 2019 to £200,000 in the year to the end of December from £2.5 million in the previous year. Revenue was 10% lower at £39.1m from £43.4m.

It said its 2018 results were inflated by completion of a contract – its largest – for an Abu Dhabi client.

Despite the impact of the Covid-19 pandemic and the fall in the price of oil, STATS said it was confident its 2020 performance and activity levels would be broadly consistent with those of 2019.

10.45am: Arena plan for Dundee

A 4,000-seat arena is being planned for Dundee’s waterfront in a major commitment to the regeneration of the city.

Full story here

8.30am: Traders upbeat

London traders remained in positive mood as concerns over the Brexit talks were set aside amid stronger corporate earnings and optimism about a post-pandemic rebound. The FTSE 100 was 19.5 points (0.33%) higher at 5,956.90.

7am: EasyJet adjusts forecast

Edinburgh airport Easyjet

Following the latest quarantine announcement easyJet now expects to fly slightly less than the 40% of planned capacity for Q4 2020 which was highlighted at its Q3 trading update. 

“This is the result of continued schedule thinning as we continue to focus on profitable flying,” it said.

“Given the many changes to government restrictions since our Q3 update, the lack of visibility and the continued level of uncertainty, it would not be appropriate to maintain any forward looking financial guidance, for FY’20 and FY’21, at this time.”

Johan Lundgren, CEO of easyJet, said: “We again call on the Government to provide sector specific support for aviation which needs to take the form of a broad package of measures including the removal of APD for at least 12 months, the alleviation of ATC charges along with continuation of the slot rule waiver.

“These steps will support the retention of skills in the sector – all of which would support jobs and promote connectivity.”

Nucleus Financial grows assets

David Ferguson

Nucleus Financial has continued to invest and hire staff through the pandemic, with a 3.2% rise in assets under administration in the six months to end June over the same period last year. However, profits took a dive.

Full story here

JD Sports reinstates guidance

JD Sport

Leisurewear retailer JD Sports has reinstated guidance for the year after reporting profit before tax and exceptional items came in at £61.9 million (2019: £158.6 million) for the 26 weeks to 1 August.

Chairman Peter Cowgill said: “Given the unique circumstances of this trading period, we are reassured by the strength of the JD brand.

“We also believe that it is appropriate for the group to reinstate guidance for the full year.

“Assuming a prudent but realistic set of assumptions… we would presently anticipate delivering a headline profit before tax for the full year of at least £265 million.”

The group believes that the CMA “fundamentally erred in law and acted irrationally” by halting its acquisition of footasylum and its application for Judicial Review to the Competition Appeal Tribunal (‘CAT’) has been listed for 23 September.

It remains the company’s intention to retain the majority of the historic Go Outdoors store portfolio which were put into administration in June.

The loss before tax in the outdoor business, which includes Tiso, was £37.2m (2019: loss of £45.2m).

The group will not be paying an interim dividend.

High street struggles

Retail sales rose last month as shoppers spent more money online – but high streets continue to struggle, according to new figures.

The latest BRC-KMPG retail sales monitor revealed that total UK retail sales increased by 4.7% on a like-for-like basis compared to the same month a year earlier.

Sales of non-food items in shops slid by 17.8% over the three months to August.

Helen Dickinson, chief executive of the British Retail Consortium, said: “Unless businesses and government can successfully persuade office workers back into city and town centres, some high street retailers will be unable to afford their fixed costs,” she said. “Government will need to act fast or September will see more shops close and more job losses realised.”

Royal Mail

Online shoppers helped Royal Mail deliver 34% more parcels during lockdown.

However, it delivered 1.1 billion fewer letters, a 28% decline.

Revenue from letters dropped 21.5%, while parcel revenue rose 33.1%, meaning total revenue increased by £139 million.

However, the company clocked up costs of £85 million from the increased difficulties around handling more parcels.

Today’s Agenda

Michel Barnier, the EU’s chief negotiator in London for Brexit talks

IoD Scotland Director of the Year Awards

Today’s top Daily Business headlines

Lockdown easing may be halted as virus cases rise

Watt is latest SNP MSP to leave Holyrood

ClinSpec DX raises £2.4m to develop cancer test

Football: Misfiring Scots can take solace from top spot

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