Online fashion retailer Asos has spelt out just how big a boost it received from Covid-19, which drove shoppers online in their masses. The retailer’s pre-tax profits for the year to August more than quadrupled, from £33m to £142m. Almost a third of the profits for the year — £45m — were thanks to behaviour changes due to the pandemic, with extra costs from operating with social distancing, for example, offset by lower returns rates.
As one of the pandemic’s corporate success stories, Asos said it was nonetheless cautious about the year ahead as disruption for its 20-something customer base continued, with the young hit particularly hard by job losses. With no return to the normal social whirl, Asos said that while it was confident of increasing global market share, it was conscious of pressures on its customers’ disposable income.
Still, a recovery in the underlying business seems to have bedded down after mis-steps in 2018. Asos said that it expected to deliver further improvement in underlying profits — excluding the Covid-19 tailwind — in the year ahead.
Pearson reported a 10 per cent fall in sales for the third quarter of the year, less severe than in the previous three months but still leaving the publishing group’s sales down 14 per cent for the first nine months of 2020. An increase in online learning sales as universities have shifted teaching online hasn’t offset declines in revenues from testing centres, Pearson’s North American courseware unit and its international business. It is boss John Fallon’s last set of results; expensive ex-Disney executive Andy Bird takes over on Monday.
Housebuilder Barratt provides the latest evidence of the post-lockdown property market boom. It completed on 24 per cent more homes between July and mid-October compared to the same period last year.
Another type of boom is on display at Just Eat Takeaway, the home food delivery ordering service. The Anglo-Dutch group said third quarter orders were up by almost 50 per cent, an increase in the pace of growth compared with the previous quarter.
Also out on Wednesday are updates from outsourcer G4S, which is attempting to fend off a hostile takeover, FTSE 100 stalwart Bunzl, emerging markets asset manager Ashmore and recruiter PageGroup.
Beyond the Square Mile
Apple introduced a redesigned line-up of iPhones enabled for 5G network speeds on Tuesday ahead of the holiday quarter when it is expected to sell upwards of 80m phones. But Apple’s stock, which rallied 6 per cent on Monday, fell after the presentation on Tuesday as the company failed to introduce long-rumoured accessories including over-the-ear “Studio AirPods” and lost-items tracking tags. The only major hardware product Apple revealed beyond the iPhone was the HomePod Mini, a smaller, oval-shaped home speaker equipped with Siri, which it will sell for $99.
JPMorgan Chase and Citigroup both enjoyed a rapid rebound in profitability in the third quarter as loan loss charges at both banks plummeted from record levels and trading revenues surged. Jamie Dimon, JPMorgan chief executive, noted that its customers “are holding up well” as their savings had built up against manageable household debt. But he stressed there was a lot of uncertainty, especially as protracted talks over another US economic support package dragged on.
Safety concerns prompted two big US pharmaceutical companies to halt trials of experimental Covid-19 drugs, dealing a blow to hopes for a medical intervention to stop the pandemic. Eli Lilly on Tuesday said it was halting enrolment for its antibody treatment, similar to one taken by US President Donald Trump this month. Johnson & Johnson said it was pausing all trials of its experimental Covid-19 vaccine on Monday after one participant developed an “adverse reaction”.
Essential comment before you go
Lombard Is it last orders for the UK’s listed national pub groups Marston’s, JD Wetherspoon and M&B? All three groups are loaded with debt and earnings will barely cover interest bills this year.
Sarah O’Connor For new labour laws governing abuse in clothes retailers’ supply chains to be effective the tick-box approach will have to end. Companies shouldn’t be liable for every bad apple on the far reaches of their supply chain, but they should know that their defence in court will rest on the seriousness of their due diligence, not the glossiness of whatever they wrote on their website.
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