Daily Business Live
Royal Mail parcels slows | Menzies Aviation| FTSE leaps
REFRESH PAGE FOR UPDATES
5pm: FTSE 100 rallies
The FTSE 100 rallied, though, was not enough to take the blue-chip index back above the 7,000 point mark, despite a strong update from Next and decent gains for oil majors.
Next gained 7.5% after raising profit guidance and resuming dividends with a special payout.
10am: GDP rises
Scotland posted a 0.9% rise in GDP during May, the fourth consecutive monthly increase and output, and is now 2.7% below its pre-pandemic level in February 2020, having increased from a low of -22.6% in April 2020.
9am: London leaps
London traders were in more positive mood this morning after Wall Street shook off recent concerns and the UK government announced that the economy continues to recover from the worst effects of the pandemic.
Government borrowing fell from £23.6bn in May to £22.8bn in June. This was the second highest level for the month since recent records began in 1993, but £5.5bn less than in June 2020.
Equity markets responded positively and the FTSE 100 was trading 103.7 points (1.51%) higher at 6,984.83.
Fashion and furnishings chain Next led the risers with a jump of 8.44% to 8011.82p as it brought forward its trading statement from 4 August to reveal sales were “materially” ahead of expectations (see below).
8am: Menzies wins WestJet deal
Menzies Aviation, the Edinburgh-based aviation logistics specialist, has been awarded a ground services contract with WestJet as the Canadian airline commences flights into Amsterdam Airport Schiphol.
The WestJet 787 Dreamliner flights between Amsterdam and Calgary International Airport will begin in August. Menzies will provide a full suite of ground services including passenger services, ramp handling, cabin cleaning and de-icing for WestJet’s three flights per week into AMS.
This win for Menzies Aviation reinforces the Group’s offering at AMS and further strengthens its long-standing partnership with WestJet.
7am: Next sees sales surge
Fashion retailer Next has raised its profit guidance after saying it had beaten its expectations for full price sales.
In an unscheduled update it said a combination of pent-up demand, warm weather, fewer overseas holidays and accumulated consumer savings had led to an 18.6% surge in full-price sales in the three months to 17 July on expectations of a 3% rise.
7am: Royal Mail
Royal Mail said the parcel market was “rebasing” as deliveries slowed in the last quarter as Covid restrictions eased.
The number of parcels sent is 35% up on 2019 levels though volumes fell 7% in the three months to the end of June compared with the first lockdown a year ago when high streets were shut.
In a pre-AGM statement, Keith Williams, chairman, said: “As expected, parcel volumes decreased and letter volumes increased compared to the exceptional period last year encompassing the UK’s first lockdown, when non-essential retailers closed for the first time.
“We are starting to see evidence that the domestic parcel market is re-basing to a higher level than pre-pandemic, as consumers continue to shop online.
“We continue to expect fluctuations in volumes as we emerge from COVID restrictions, which we will need to manage accordingly.
“Nonetheless we are encouraged by the revenue performance across Royal Mail and GLS in the first quarter, and notwithstanding the current uncertainty, remain confident about the full year.”
Group revenue in the three months to end June 2021 grew by 12.5% compared to a year ago and by 20.2% over the same period in 2019.
Forecasts for the year remain unchanged.
Retailers eke out small rise
The European football championships helped give a 1% like-for-like lift to Scottish retail sales last month compared to June 2019.
Sales of televisions as well as food and drink, and fashion categories did slightly better, driven by the return of some aspects of socialising.
David Lonsdale, director at the Scottish Retail Consortium, said: “Scottish retail sales eked out a further modest improvement in June, the second full month since all shops were permitted to re-open, recording the best monthly performance since the onset of Covid.”
US markets reversed recent losses, raising prospects of a positive start in London.
The Dow Jones Industrial Average closed 1.62% higher, while the S&P 500 was up 1.52% and the Nasdaq rose 1.57%.
Asia was more mixed this morning, with Japan’s Nikkei 225 rising 0.4% while Hong Kong’s Hang Seng fell 0.54%.