BUSINESS LIVE: Metro Bank deposits dip; TRG bidder pulls out; Persimmon lifts build target


The FTSE 100 closed down 7.72 points at 7410.04. Among the companies with reports and trading updates today are Metro Bank, The Restaurant Group, Persimmon, Vistry. Direct Line and Foxtons. Read the Tuesday 7 November Business Live blog below.

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FTSE 100 closes down 7.72 points at 7410.04

Watches of Switzerland Group shares climb 13%

Shares in the luxury retailer, which sells iconic timepiece brands like Rolex, Breitling and Tag Heuer, climbed 13 per cent to 586.5p just before markets closed, making it the top riser on the FTSE 100 Index.

Scottish Mortgage manager: We will have periods when we underperform

Scottish Mortgage has stuck by its guns as the investment trust’s manager said there would be times when its bold investments ‘underperform’.

Middle class shoppers make up over HALF of Aldi and Lidl customers

Affluent families now make up 54 per cent of shoppers at Aldi and Lidl as the entire nation trades down ahead of Christmas to save cash.

The German-owned budget chains beat mainstream supermarkets on price despite the fact they have seen some of the steepest increases in the past year, according to Which? research.

Grocery price inflation slows below 10% for first time since July 2022

A supermarket price war is breaking out as grocery inflation slows and the UK’s major players ‘up the ante’ on promotions, fresh industry data suggests..

For the first time in a decade, 2023 has seen all of the UK’s top grocers increase their proportion of sales completed through deals when compared to last year, market researcher Kantar said.

Coca-Cola and Nestle accused of greenwashing over bottle recycling claims

(PA) – Coca-Cola, Danone and Nestle have been accused of greenwashing over claims about their plastic bottles being “100% recycled”.

The European Consumer Organisation (BEUC), backed by environmental groups Client Earth and Environmental Coalition on Standards (Ecos), has issued a legal complaint to the European Commission.

It focusses on the firms’ claims that the single-use, plastic water bottles they supply are either 100% recycled or 100% recyclable bottles.

But BEUC argues that this is misleading as the bottles are never made entirely of recycled materials.

It said the lids cannot be made from recycled materials under EU law, labels are rarely made from recycled material and adding non-recycled plastic to the body is common practice.

The organisation added that the use of green imagery or branding for many water bottles across Europe is also misleading to consumers.

It also said the term “100% recyclable” is ambiguous as since recyclability depends on many factors like available infrastructure to collect material; the effectiveness of the sorting process; or appropriate recycling processes.

BEUC filed the complaint to the Commission as well as the network of consumer protection authorities (CPC), calling on them to launch an investigation.

Ursula Pachl, deputy director general of BEUC, said: “Be it about buying new clothes, opening a bank account or buying water bottles, consumers increasingly want to make the most sustainable choice and seek reliable information to do so.

Bank fraudbuster says beware Facebook Marketplace: LUNCH MONEY

Beware Facebook Marketplace! That’s the warning sounded by a bank fraudbuster ahead of Britain’s Christmas buying and selling spree.

TSB’s director of fraud, Paul Davis, sounded the alarm on social media fraud but why did he single out Facebook Marketplace above others?

Ministers plot crackdown on budget airline drip pricing’

Airlines like Ryanair and easyJet will be banned from hammering families with sneaky hidden costs after luring them into flying with low cost tickets under plans unveiled in the King’s Speech.

Rishi Sunak is to take action against ‘drip pricing’, where firms advertise a service for a price before adding on extra charges.

Vistry Group agrees £819m deal to build almost 3,000 homes

Vistry Group has signed an £819million deal with two businesses to provide nearly 3,000 mixed-tenure properties.

The Kent-based housebuilder revealed Leaf Living and Sage Homes, both backed by private equity giant Blackstone and property investor Regis Group, have agreed to buy 2,915 units between them.

How to invest for income and five fund ideas to profit from dividends

When it comes to stock market investing, dividends matter.

Some investors use these regular payments from companies to investors to supplement income, while others prefer to reinvest them to benefit from the long-term power of compounded returns.

Naked Wines shares nosedive as boss leaves ‘with immediate effect’

Naked Wines shares fell over 30 per cent on Tuesday after the group cut its annual forecasts and announced its chief executive was leaving the business.

Chief executive Nick Devlin has agreed to step down ‘with immediate effect’, with founder and chairman Rowan Gormley taking on the role of executive chairman on an interim basis until a successor is found.

Primark sales balloon to £9bn despite ‘selective’ price hikes

Primark owner Associated British Foods has credited a jump in profits and sales to collaborations with celebrities like Rita Ora.

AB Foods group’s total revenue increased by 16 per cent to £19.7billion in the year to September as Primark sales soared by 15 per cent to £9billion, with 11 per cent growth in the UK.

Post Office ends exclusive relationship with Royal Mail

Post offices will allow people to send parcels with outside couriers, rather than using Royal Mail, for the first time in their 360 year history.

The organisation has signed a deal to allow customers to choose to send items with Royal Mail’s foreign-owned and cheaper rivals – Evri of Germany and DPD of France.

Metro Bank deposit outflows return to ‘more normal ranges’

Metro Bank saw deposits fall by 5 per cent in the third quarter, but it has told investors outflows have normalised after October’s emergency rescue deal.

The troubled lender revealed deposits totalled £15.6billion at the end of September, compared to £16.4billion at the equivalent time last year.

Persimmon ups build forecast but warns of ‘highly uncertain’ 2024

Persimmon is set to build more homes than previously forecast this year, but the group has warned of lingering challenges across the housing market.

The group now expects 9,500 deliveries in 2023, compared to ‘at least 9,000’ forecast over the summer.

Klarna posts first quarterly profit in four years amid boom in demand

Klarna has posted its first quarterly profit in four years amid a boom in demand from shoppers ahead of the Christmas period.

The Swedish buy-now-pay-later (BNPL) giant, once Europe’s most valuable start-up, reported a profit of £9.6million for the third quarter of 2023 having made a loss of £156million a year earlier.

Pizza Express owner won’t make an offer for The Restaurant Group

Wheel Topco, the owner of Pizza Express, has confirmed it will not be making an offer for The Restaurant Group ‘due to market conditions’.

TRG said last month it had received a request for due diligence from Wheel Topco, which was mulling a potential surprise bid for the group. However, no bid was formally submitted.

‘Persimmon is performing well in the face of housing market headwinds’

Anthony Codling, head of European housing and building materials research, RBC Capital Markets:

‘Persimmon is performing well in the face of housing market headwinds and is on track to deliver full year results in-line with expectations.

‘The Group is doing a good job managing prices and incentive levels, with incentive levels lower than we had anticipated. However, those headwinds are likely to remain in 2024.

‘Volumes may increase next year as more outlets are opened, but pricing and ongoing build cost inflation are likely to keep margins flat. Over the tone of today’s trading statement as neutral, which in this market we see as a good result.’

ABF navigates ‘shaky customer demand’

Mark Crouch, analyst at eToro:

‘This is a very strong update from Associated British Foods, which has navigated the inflationary environment and shaky customer demand well over the past year.

‘ABF’s agriculture division has struggled due to falling demand for pork in China and disease affecting the pig and poultry sectors in Europe, but its other divisions are flying.

‘The one everyone always wants to know about is Primark, the jewel in the ABF crown. Carefully selected price increases allowed the budget clothing retailer to significantly boost revenues without putting off customers, while successful collaborations with the likes of Stacey Soloman and Rita Ora have gone down well with shoppers.

‘Looking at group financials, it’s a case of strength across the board. Net debt has risen considerably, but much of this has been invested back into the business to fund ABF’s rapid expansion, particularly in retail.

‘ABF’s decision to increase its dividend by 37% will also go down well and will most likely draw investor attention to its shares, which are already up nearly 49% over the past 12 months before today’s results.’

WeWork faces bankruptcy as shares are suspended in New York

Grocery price inflation falls below 10% for the first time since July 2022

British grocery inflation has fallen below 10 per cent for the first time since July 2022, according to fresh data that will provide some relief for consumers as they enter the key Christmas shopping period.

Market researcher Kantar said annual grocery inflation was 9.7 per cent in the four weeks to 29 October, down from 11 per cent in last month’s report.

‘While the drop … is positive news and something of a watershed, consumers will still be feeling the pinch,’ Fraser McKevitt, head of retail and consumer insight at Kantar, said.

‘We’re only seeing year on year price falls in a limited number of major categories including butter, dried pasta and milk.’

ABF eyes ‘meaningful improvement’ in 2024

Associated British Foods has forecast ‘meaningful progress’ in its new financial year, driven by a strong recovery in the margin of its Primark fashion business thanks to lower material and freight costs, and a big improvement in its sugar business.

The group, which reported profit growth of 5 per cent for 2022/23, anticipates further growth in Primark’s sales in the 2023/24 year, driven by some 1 million square feet of new retail space and ‘modest’ levels of like-for-like sales growth.

It said lower material and freight costs should result in a ‘substantial recovery’ in Primark’s gross margin and overall it expects Primark’s adjusted operating profit margin to recover strongly from the 8.2 per cent made in 2022/23.

‘At this early stage we believe that the adjusted operating profit margin will be above 10 per cent with further improvement dependent on levels of consumer demand,’ it said.

Changes show Unilever is on track, declares star fund boss Nick Train

One of Unilever’s biggest backers has welcomed the shake-up at the consumer goods giant under its new boss.

Last month chief executive Hein Schumacher told investors the company would be dialling down its woke agenda to focus on the bottom line after years of under-performance.

Housebuilding falls for 11th month in a row amid slump in demand for new homes

Persimmon lifts build target

Persimmon is set to build more homes this year than previously forecast, even as elevated mortgage costs and a prolonged cost-of-living squeeze keep buyers away.

The FTSE 250 firm now expects to build 9,500 homes in 2023, above its August forecast of 9,000 units, as it pointed to improved sales since the start of October.;

Dean Finch, chief executive, said

‘While the near term is likely to remain challenging and we remain disciplined on costs, we continue to position the business for growth when the market recovers, as demonstrated by our further progress on planning in the period.

‘The Group’s national network of outlets providing a high-quality product at a range of attractive prices is a crucial strength in this market.’

TRG bidder pulls out

The owner of PizzaExpress Wheel Topco will not make an offer for The Restaurant Group, citing current market conditions.

‘Wheel Topco confirms that, due to market conditions, it does not intend to make an offer for TRG,’ the company said in a statement.

Watchdog apologises to former NatWest boss Rose over Farage debacle

Metro Bank deposits dip 5%

Metro Bank deposits shrank another 5 per cent in the third quarter, but the troubled lender told investors the increase in outflows prior to last month’s capital raise had now returned to ‘more normal ranges’.

The bank revealed a £325miliion capital raise in October and a £600million debt refinancing, after urgent talks to bolster its balance sheet.

Deposits as at 30 September stood at £15.61billion, down from £16.37billion a year earlier.


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