With the US presidential election heading for a nail-biting finish, it could be a good day to bury bad news. But bad news at Marks and Spencer was so well-flagged, it can’t be buried.
The retailer reported a historic pre-tax loss of £88m for the six months to late September, down from a £159m profit for the equivalent period last year. On an adjusted basis the loss wasn’t as bad as analysts had feared, however, at £17.4m rather than a company-provided consensus of £59m.
Food sales helped offset a predictable decline in M&S’s clothing and home sales. Like-for-like food sales for the half year were up 2.7 per cent. But clothing and home sales fell 41 per cent, with a decline of 62 per cent in the first quarter followed up with a 21 per cent year-on-year fall in the second.
M&S has suffered from its exposure to the high street. It warned on Wednesday that while trading had started the second half of the year at similar rates to the end of the second quarter, the second lockdown would have a further impact on clothing and home profits.
Odey Asset Management will no longer have Crispin Odey at its helm. Mr Odey, who founded the hedge fund in 1991, has stepped down to focus on managing his own funds, leaving co-CEO Timothy Pearey as the firm’s sole boss. His departure comes after Mr Odey was charged with alleged indecent assault in July, with a trial set for February. Full story from hedge funds correspondent Laurence Fletcher here.
Barclays has been ordered to repay millions of pounds in interest on timeshare loans in Malta after an intervention from the Financial Conduct Authority. Barclays Partner Finance was the banking partner for Azure Resorts, and underwrote financing agreements sold to holidaymakers. But while Azure Resorts was licensed by the watchdog to sell loans, the employees brokering the financing agreements worked for another company that wasn’t authorised by the FCA until 2016. Barclays also faces a further investigation that could force it to reimburse debt payments in full.
Pub group Shepherd Neame has published full-year results, after the government clarified second-lockdown rules to allow pubs to serve takeaway alcohol after all. It made a £12m loss for the year to June, though it’s fair to say a lot has changed since then. In the 18 weeks to the end of October, like-for-like sales at the group’s managed pubs were two-thirds of last year’s levels, though down only 13 per cent at open sites. But the Faversham-based brewer said a new lockdown would again be “extremely disruptive” with uncertainty over the important Christmas period.
Also out on Wednesday are updates from Provident Financial, Morgan Sindall and Smurfit Kappa.
Beyond the Square Mile
Alibaba shares tumbled in Hong Kong trading after regulators halted the $37bn listing of its Ant Group spin-off at the eleventh hour. China’s largest fintech, Ant had been set for a record-breaking IPO on Thursday when it was due to jointly list in Shanghai and Hong Kong. But Shanghai’s stock exchange suspended the listing on Tuesday evening after Jack Ma, the billionaire founder of Alibaba and Ant, was summoned by Chinese regulators for “supervisory interviews”. Alibaba’s Hong Kong-listed shares fell as much as 9.3 per cent on Wednesday.
A series of technology glitches at stock exchange group Euronext is feeding concerns that its efforts to build a central role in the region’s capital markets could intensify risks around a single point of failure. On Monday, trading in warrants across Euronext’s network halted for an hour, just two weeks after a chaotic day disrupted trading across equities, exchange traded funds, derivatives and other markets. Euronext, which already runs the main exchanges in Paris, Amsterdam, Brussels, Dublin and Lisbon, plans to add Oslo Bors in the next few weeks and could add Borsa Italiana too.
Chinese companies are waiting twice as long for clients to settle bills as in 2015, suggesting that the country’s economic recovery is weak. Official data show it took an average of 54 days for Chinese private manufacturers to get paid in the first three quarters of this year. That is up from 45 days in 2019 and 27 days five years ago. Private companies, an important employer, are trimming their growth plans for fear of late payments.
Essential comment before you go
Much remains uncertain for business, the economy, domestic politics and international relations. But our veteran columnist lays out ten ways the coronavirus crisis will shape the world in the long term.
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