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Wednesday Update

DB Live: Shell to axe up to 9,000 jobs; Boohoo profits up

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4.30pm: London closes lower

The FTSE 100 rose before dipping at the close of the session to trade at 5,866.10, down 31.40 (0.53%) despite Wall Street’s main indexes jumping after officials rekindled the idea of an imminent fiscal stimulus package.

Upbeat data suggested a domestic economic recovery was on track.

The news helped counter the gloom which descended after last night’s acrimonious US presidential candidates debate.

Housebuilders Taylor Wimpey, rose 3%, and Persimmon was 0.9% higher on Nationwide figures showing the average UK house price has hit a new record in September, pushing over £225,000 for the first time.

After rising in early trade, Royal Dutch Shell, ‘A’ and ‘B’ shares ended down 2.0% and 1.7% respectively afte the oil major said it plans to slash thousands of jobs (see below).

Topping the FTSE 250 risers was 888 Holdings, closing up 21% after revealing profit more than doubled in the first half of 2020 thanks to continued strong levels of customer acquisition and high use of online services during lockdown.

4.15pm: Prestwick Airport bidder withdraws

A preferred bidder for Prestwick Airport has pulled out, leaving questions about the future of the Ayrshire base.

Full story here

11am: M&G wealth launch

M&G, the international savings and investments business, is bringing together established operations to form a wealth management division.

Full story here

10.15am: New law practice

A former Aberdein Considine lawyer is launching his own legal practice promising “the biggest shake up in the Scottish legal scene in decades”.

Full story here

10am: TSB announces branch closures

TSB has announced 164 branch closures across the UK as part of its three-year strategy

Full story here

9.45am: Wm Hill recommends Caesars offer

Bookmaker William Hill said it has agreed to be acquired by Caesars Entertainment, in a £2.9bn deal that would give the US casino giant a huge boost in its rapidly expanding sports betting industry.

William Hill chairman Roger Devlin said: “The William Hill board believes this is the best option for William Hill at an attractive price for shareholders.”

The company said it would continue to operate “business as usual” while the deal undergoes regulatory scrutiny, and said its UK operations still has “a strong future ahead”.

Caesars, which owns the famous Caesars Palace in Las Vegas, said “the historic acquisition would bring together Caesars as one of the largest gaming-entertainment companies in the US… and William Hill as one of the world’s leading betting and gambling companies.”

Caesars’ offer of 272p per share, a 57.6% premium on its closing price at the start of the month, will be put to shareholders at a general meeting. 

9am: London markets make slow start

Markets barely moved following the first televised US presidential candidates battle. The FTSE 100 was looking for direction and was just slightly down at 5,892.38, which was 5.12 points (0.087%) lower.

Online fashion group Boohoo (see below), one of the Covid beneficiaries, announced strong growth but the figures appeared to be built into recent rises in the shares which fell 2.4%.

Shell’s decision to cut up to 9,000 jobs was seen as a positive for the company, with the shares rising 2%.

Contract caterer Compass lost 4% after warning of the potential impact of a second-wave of lockdowns on its business.

shell

7am: Shell job cuts

Royal Dutch Shell is planning to axe between 7,000 and 9,000 jobs worldwide following the collapse in global oil demand.

The cuts are scheduled to take place by the end of 2022 and include 1,500 taking voluntary redundancy from a total workforce of 83,000. The company has not specified where the job cuts will fall.

A streamlined and lower-cost organisation will focus on upstream providing strong and resilient cash generation, focused on accelerating value.

It will mean reducing the refining footprint to fewer than 10 sites, retaining those that are strategically essential in key locations, with flexibility to adapt and further integrate with the growing chemicals and trading businesses.

The oil and gas firm saw a 46% fall in first-quarter net income to $2.9bn (£2.3bn), while second-quarter income fell 82% to $638m.

It said third-quarter earnings were expected to be “at the lower end of the $800m to $875m range”.

Boohoo profits rise

Online retailer Boohoo saw a 45% leap in profits before tax to £68.1m (2019: £45.2m) for the half year to the end of August.

It said an investigation into “unacceptable working practices in our Leicester supply chain” will lead to “substantive, long-lasting and meaningful change that all stakeholders in the boohoo group will benefit from”

Markets

The FTSE 100 is expected to open around 22 points lower as investors were largely downbeat following an acrimonious first debate between US presidential candidates Donald Trump and Joe Biden.

The Dow Jones Industrial Average closed 0.48% lower while the S&P 500 dropped 0.48% and the Nasdaq fell 0.29%.

Shares in China were led higher by consumer and healthcare stock amid upbeat factory activity surveys.

The Shanghai Composite index was up 0.45% at 3,238.86 and the blue-chip CSI300 index was 0.63% higher. Hong Kong’s Hang Seng was up 1.15%

Japan’s Nikkei 225 was down 1.07%.

Today’s agenda

Day three of Scottish International Week

Dave Lewis spends last day as CEO of Tesco

Today’s top Daily Business headlines

‘Do not treat devolution as an after-thought’ – Roy

Pubs: ‘we are part of solution to Covid, not the problem’



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