Drama across the Atlantic might make it a good day to bury bad news. J Sainsbury is taking the opposite approach.
Britain’s second biggest supermarket raised its full-year profit target in an unscheduled trading update. Underlying earnings are now expected to be £330m, approximately £60m above its previous guidance, following a 9.3 per cent jump in sales over the festive season. Demand for groceries, general merchandise and clothing had all been stronger than expected while online sales more than doubled in the weeks before Christmas, Sainsbury said.
B&M, the discount retailer whose £5.3bn market value is double that of Marks & Spencer, posted a 22.5 per cent jump in revenue for its December quarter but cut profit guidance to reflect its repayment of UK business rates relief. UK like-for-like sales grew 21.1 per cent in the quarter as B&M’s classification as an essential retailer allowed it to keep trading. The company said it would be returning a further £200m to shareholders via a 20p per share special dividend, its third in less than 12 months.
Pub owner Mitchells & Butlers said it is considering an equity raise to help weather the latest lockdown measures, though no decision had been made yet on timing, size or terms. The All Bar One owner reported a 67.1 per cent slump in sales for the 14 weeks ended January 2.
Ladbrokes owner Entain, which said on Monday that it had rejected a takeover offer from MGM Resorts, is buying Enlabs of Sweden for around £250m. Entain said it had agreed a recommended cash offer for Enlabs at a price of SKr40 per share, a premium of just 1.1 per cent to where the stock closed on Wednesday. The deal, which Entain said had been accepted by Enlabs shareholders holding 42.2 per cent of the equity, put a value on the Baltics- and Nordics-focused online casino operator of SKr2.8bn. Entain also revealed that its 2020 earnings would beat consensus forecasts.
Ryanair cut its annual traffic forecast by around 5m passengers, with the airline saying new Covid-19 restrictions had forced significant cuts to its flight schedules. Lockdowns “will result in few, if any, flights being operated to/from Ireland or the UK from the end of Jan until such time as these draconian travel restrictions are removed," Ryanair said.
Beyond the Square Mile
US drug wholesaler AmerisourceBergen has agreed to buy the distribution business of Walgreens Boots Alliance for about $6.5bn as it pushes further into Europe. Stefano Pessina, chief executive of Walgreens Boots Alliance, told the Financial Times that he would use proceeds from the sale to pay down debt and to help fund acquisitions, adding that the company had identified a number of targets.
The New York Stock Exchange on Wednesday said it would go ahead with a plan to delist three Chinese telecommunications companies next week, after an earlier decision to keep the businesses trading on the Big Board drew criticism from Steven Mnuchin, the Treasury secretary. NYSE said it would drop the shares of China Telecom, China Mobile and China Unicom from the exchange on January 11 to comply with an executive order signed by President Donald Trump last year.
A mere three bidders, including a state agency, put forward offers for controversial oil leases in an ecologically sensitive area of Alaska during an auction that the Trump administration rushed to conduct in its final days. The first-ever sale of drilling rights in the Arctic National Wildlife Refuge elicited minimal interest on Wednesday, with the Alaska Industrial Development and Export Authority, the agency responsible for driving the state’s economic growth, accounting for the bulk of the bids.
Essential comment before you go
The UK market has suffered pariah status for years now, chalking up big outflows since 2016. But the “do not touch with a barge pole” status of the UK looks increasingly hard to justify for a number of reasons, writes an investment director at Fidelity International.
How you think about Greggs’ future really depends on whether you believe 2022 will be remotely like 2019. Its business should be fine but how big will the pasty market be once we’re allowed to venture out into the world again?
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