Greggs said that it will swing into a loss this year and does not expect profits to return to pre-Covid levels until 2022 at the earliest.
The bakery chain operator posted total sales for 2020 of £811m, down more than 30 per cent year on year. For the fourth quarter, revenue fell 14.8 per cent to £293m as “variable trading conditions across the UK” meant like-for-like sales averaged 81.1 per cent of the 2019 level.
“Throughout this crisis government support has been essential in order to minimise the number of job losses caused by lower levels of demand and to contain losses in the business, which we now believe are likely to be up to £15m before taxation for the year as a whole,” Greggs said. That compares with a £108.3m pre-tax profit in 2019, though is better than analysts’ consensus expectations for a £67m loss.
Greggs said it had extended revolving credit facilities having repaid a Bank of England emergency loan under the Covid Corporate Financing Facility, which reduced its net cash position to £37m at the year end.
Topps Tiles has warned of a hit to sales from new UK lockdown measures. Though Topps is classed as an essential retailer, the company said it had been advised to close tile aisles in stores to prevent browsing. Sales will probably suffer as a result, with delivery costs also dragging on margins as a greater proportion of sales switch to online. The company posted a 19.9 per cent improvement in retail like-for-like sales for the 13 weeks to late December.
Auto Trader said that while demand for car buying remained strong between October and December, lockdown is likely to hit sales volumes in January and February. The classifieds website said it will therefore provide advertising packages for free during February, repeating a December offer. The free listings offers come at a cost of £5m and £7m per month, Auto Trader said.
Informa, the publishing and events group, said trading has been no worse than already flagged at half-year results in September. It cited strong performances from its subscription-led businesses and a postponement programme that has meant 90 per cent of physical events ex-China are scheduled from June 2021.
Hedge fund group Winton has suffered a nearly 80 per cent drop in its assets over the past five years, with poor returns and client withdrawals accelerating in a tough 2020. Investor assets at the London-based firm tumbled from $33.7bn at the end of 2015 to $7.3bn by late 2020, according to an investor letter seen by the FT. Much of the decline came in last year’s market turmoil, when assets fell by around $12.5bn.
Aggreko, the generator hire specialist, said it had rejigged a contract with The Tokyo Organising Committee of the Olympic and Paralympic Games “to reflect both scope changes and the impact of the delay of the Games into this year.” The total revenue value to the group is now expected to be around $315m, Aggreko said. Its original deal agreed in 2018 had a reported value of $200m.
Retail freight specialist Clipper Logistics said in a trading update that it “has experienced unprecedented levels of activity in its logistics operations in both the UK and continental Europe over the Black Friday and Christmas periods.”
Beyond the Square Mile
Gary Cohn, a former Goldman Sachs president and head of the National Economic Council under Donald Trump, has joined IBM as vice-chairman as the fading computing giant seeks to inject fresh energy into an attempted overhaul that has failed to revive confidence on Wall Street. The appointment marks a rare injection of heavyweight talent into IBM’s top ranks from the outside, and is the first time in two decades that Big Blue has named a vice-chairman.
US president Donald Trump moved to ban transactions with Chinese payment applications including Alipay, WeChat Pay and Tencent’s QQ Wallet on Tuesday. The executive order is the latest in a series of late moves by the Trump administration to crack down on Beijing before Joe Biden is inaugurated on January 20.
App developers are exploring surreptitious new forms of user tracking to evade Apple’s new privacy rules, which threaten to upend the mobile advertising industry in the coming months. An upcoming iPhone update will prevent apps from using advertising identifiers known as IDFA without obtaining each user’s explicit consent for targeting.
Essential comment before you go
The FT View
It would be fanciful to think that the City of London has only sunlit uplands ahead yet there is room for optimism, writes our editorial board. Green finance and liberating the country’s vast private pension system provide potent opportunities.
Online has been the growth engine at Wm Morrison by exploiting its last-mover status among the Big Four grocers. Though picking post-lockdown sector winners won’t be a piece of cake, Morrisons looks to have the right ingredients.
Thanks for reading. Feel free to forward this email to friends and colleagues, who can sign-up here.
Get alerts on UK companies when a new story is published