- Delta surge smashes business confidence in Germany
- FTSE 100 rises as Paddy Power owner Flutter surges as much as 10pc
- Ex-Goldman bankers take a big bet on gourmet dog food
- Kate Andrews : Don't be surprised if working from home costs you a pay cut or a promotion
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T hat is all from us today. Here are some of our top stories:
- Delta surge smashes business confidence in Germany
- Staff who keep working from home put career progression at risk, warns City boss
- Flutter says Murdoch spat will not stop US domination
- London bitcoin miner hit by attack from short-seller Boatman Capital
- Google to let parents delete online photos of their children
Thank you for following along!
AmEx delays the return to office
C redit card giant American Express has joined the pack and postponed the full return of workers to its offices until at least October 11.
Chief executive Steve Squeri said: "We have been watching with increasing concern the resurgence of Covid-19 cases across the US due to the rapid spread of the delta variant.
"We are now at the point where the data indicates that the most prudent course of action is to delay the full opening of our US offices."
He added he would be prepared to postpone the return again if the situation got worse.
In June AmEx said it would begin inviting more staff back on September 13, with plans to fully adopt a new hybrid schedule the week of October 4.
New York-based AmEx’s office will still be open for those who want to come in or can’t work effectively at home.
A round up of some company updates from today:
- Marshall Motor
Pre-tax profits at car dealer Marshall Motor hit a record £39.5m in the first six months of 2021, compared to a £10.7m loss last year. The rise was due to the £4.7m saved from the Gov’s business rates holiday, strong trading amid the third lockdown and “exceptionally strong used car performance”. It warned the second half is likely to be less favourable.
Software business Gamesys reported a 21pc rise in pre-tax profit in the first half as it overcame a 29pc drop in Europe amid tougher regulations on gambling in Germany, Scandinavia and Spain. It grew by 30pc in Asia and a fifth in the UK, a record performance helped by Virgin Games, Monopoly Casino and Rainbow Riches Casino.
Online estate agent Purplebricks will stop using self-employed on-the-ground agents and bring the workers in house. It said that a model of employing staff can ensure it is able to scale up quickly to meet customer demand. It already has 100 agents ready to join “as opportunities arise”. The firm said the new model would create one-off costs of around £3m to £4m this financial year, and £1m more in administration costs each year after.
Vectura auction off as Carlyle refuses to beat Philip Morris bid
U S private equity giant Carlyle has said it won’t raise its bid for UK-listed inhaler firm Vectura, calling its last 155p pence per share offer “full and fair”.
It said in a statement: “Carlyle Bidco has decided that the financial terms of its offer will not be increased and are now final. As a result, the proposed auction procedures will not be implemented”.
The firm has been battling cigarette producer Philip Morris for control of the asthma drug maker. Carlyle’s improved offer – 5p higher than the bid by Philip Morris that beat the private equity firm’s original approach – would have valued Vectura at £958m.
Carlyle said its own lower bid offers "wider benefits to Vectura and its broader stakeholders," a reference to the backlash the drugmaker has faced over the potential sale of the business to a cigarette maker.
On Monday, the Takeover Panel – which oversees UK mergers and acquisitions – that an auction would start on Wednesday and run until August 17 at the latest.
US senate passes Biden’s $1 trillion infrastructure bill
T he US Senate has passed President Biden’s $1 trillion infrastructure with a 69-30 vote, which will be seen as a victory for the White House and the bipartisan group of senators who spent months negotiating it.
The bill would represent the biggest burst of spending on US public works in decades and a significant victory for Joe Biden's economic agenda.
Senator Chuck Schumer said before the vote: "It's been a long and winding road but we have persisted and now we have arrived”.
The spending in the legislation will "strengthen every major category of our country's physical infrastructure”, he said.
Boom in cargo and cost cutting helps Etihad halves losses in first half
A bu Dhabi-based airline Etihad Airways shrunk its losses by 50pc in the first half as a surging cargo business and cost cutting helped offset a slower-than-expected travel recovery.
The Gulf carrier posted a $400m (£289m) loss in the first six months of 2021, half the size of the same period last year.
Operating costs fell by 27pc to $1.4bn as Etihad aggressively reduced costs and operated fewer planes in a bid to survive a turbulent pandemic which has kept people glued to home turf. It carried just 1m passengers in the first half, down from 3.5m in the same period last year, with planes a quarter full on average.
New virus variants have caused a slower travel recovery than hoped. Etihad's passenger revenue dropped 70pc to $300m compared to the first half of 2020. Some domestic and short-haul travel has, however, sprung back.
Etihad's cargo business has, however, been the most prominent tailwind as demand for air freight boomed amid a growing e-commerce sector and shipping delays. Revenue in the unit surged 56pc year-on-year to $800m.
The airline had been one of several that turned the Gulf into a long-haul stopover destination, which now forms the backbone of its business and the area hardest hit by Covid.
Expert reaction: FTSE buoyed by betting stocks
J oshua Mahony, Senior Market Analyst at IG, comments:
Gambling stocks are a big outperformer today as Flutter Entertainment earnings shone a light on the potential benefits that come with US expansion.
ITV takes stake in price comparison site IsMyBillFair.com
I TV has seized a £1.25m stake in ismybillfair.com, the start-up attempting to slash the cost of energy bills, reports Ben Woods.
The Love Island broadcaster has struck a deal where it dishes out advertising space across its TV channels and catch-up service in exchange for equity.
Ismybillfair.com aims to prevent the hassle of switching suppliers by securing customers a better deal with their existing energy provider. It plans to expand its service into the broadband market.
Nineteen21, the parent company behind ismybillfair.com, reported a net loss of £400,000 for the year to February 2020.
Alex Perrin, the chief executive and co-founder of ismybillfair.com, said: “Our aim is to become the leading household brand for saving without switching.
“ITV reaches more households than any other commercial TV group in the UK and, combined with its near-perfect match with ismybillfair's audience, we've found our ideal partner to fuel our growth."
ITV followed in the footsteps of Channel 4 in March by launching the media-for-equity fund AdVentures Invest, spearheaded by fund manager Niko Waesche.
It has already taken a £3m stake in what3words, a London-based digital mapping firm that has carved up the planet into 3m squares carrying three words to identify them.
Mr Wasesche said ismybillfair.com was an “extremely useful service for British consumers” and ITV was “looking forward to bringing it to a mass audience”.
Staff who keep working from home put promotions at risk, warns City boss
T he boss of investment company abrdn has said young workers stand a better chance of progressing their careers in the office as he defended its widely derided name change, reports my colleague Simon Foy .
Stephen Bird, who took over as chief executive of the former Aberdeen Standard Life last September, said he agreed with Rishi Sunak's assessment that young workers risk missing out on vital lessons if they stay at home permanently.
FTSE and oil rise
T he FTSE 100 has recovered its losses from earlier in the day, now up 0.3pc while oil also continues its rebound.
Oil slumped to three week lows yesterday, on concern that new lockdowns in China and rising cases of the delta coronavirus variant would curb demand.
However today, concern among investors is easing with the price of Brent per barrel up 2.9pc at $71.04.
The FTSE 100 bluechip index has been pushed to its highest price in a month by Paddy Power owner Flutter, which is surging more than 10pc after reporting strong results.
Robinhood acquires investor relations platform
R etail investor platform Robinhood announced today it plans to acquire retail investor relations platform Say Technologies in a $140m (£101m) all-cash deal.
Startup, Say, has created an online platform where retail investors can interact with the companies where they are shareholders. Its Q&A platform, for example, allows investors to ask and "upvote" questions.
"Say was built on the belief that everyone should have the same access to the financial markets as Wall Street insiders," Robinhood's chief product officer, Aparna Chennapragrada, said.
"We share a common goal of eliminating the barriers that keep people from participating in our financial system."
US markets climb as Europe records new high
M eanwhile European stocks have hit a new record high on the back of strong earnings.
The Euro Stoxx 600 rose 0.45pc to 472.82 points, with UK stock Flutter up close to 10pc after it reported strong appetite for sports betting in the US drove revenue beyond expectations.
While the FTSE 100 remains flat, US markets have now climbed higher despite ongoing concerns about rising delta infections and fears the Federal reserve could taper stimulus. All three indices rose 0.2pc in the first half hour of trading.
"Risks remain," said Mark Haefele, chief investment officer at UBS Global Wealth Management. "While inflation data has so far not been a major market mover, Wednesday's July consumer price index release has the potential to cause volatility, especially given expectations that inflation has passed the peak."
Wall Street inches higher
U S markets opened marginally in the green this afternoon as traders await a Senate decision on President Joe Biden’s $1.2 trillion infrastructure bill.
The S&P 500 eked out a 0.07pc rise, while the Dow and Nasdaq posted micro-rises of 0.09pc and 0.08pc respectively.
The Senate vote is due at 3pm on the bipartisan infrastructure bill before debating an extra $3.5 trillion in additional cash to unlock investments such as road and bridge-building projects over the next five years.
Analysts see the vote as indicative of appetite for financial backing for the US economy’s recovery from Covid as delta variant cases soar in the country.
“We are sort of in a holding pattern. The Delta variant is sort of causing investors to sit on their hands and not really do anything with their portfolios at this point,” said Sam Stovall, chief investment strategist at CFRA.
O n the subject of Deliveroo, here’s a chart that shows how close it is to recovering from its disastrous debut plunge back in April.
The food delivery firm floated at 390p per share but shed a quarter of that instantly on its first day of trading. It has been clawing back the lost value ever since, but the arrival of an Amazon executive and yesterday’s purchase by German rival Delivery Hero of a 5pc stake have accelerated the recovery – it is currently trading at 364.4p per share.
‘Letting Australia’s ‘Vampire Kangaroo’ control Southern Water is a disaster’
Y ou may have seen that Australian investment bank Macquarie has returned to the UK’s utility sector with a £1bn rescue of struggling supplier Southern Water.
City commentator Ben Marlow argues the takeover will prove disastrous for consumers and the environment, after Macquarie’s previous ownership of Thames Water saw it pour raw sewage into British rivers as it funnelled billions in dividends to directors at the expense of investment.
It's bad enough that Macquarie, dubbed "the Vampire Kangaroo" by critics for its skill at maximising profits, would be allowed anywhere near the sector again. But the idea that it is best suited to turn around the industry's current worst performer, and its most financially challenged operator, is almost beyond parody. It's like asking an arsonist to put out a burning fire.
Deliveroo keeps rising after poaching Amazon executive
D eliveroo has poached a leading technology executive from its own investor, Amazon, as its shares rose closer to their float price, reports Matthew Field .
The food delivery company, which went public earlier this year and endured a first day rout as shares fell by a quarter, has hired Devesh Mishra as its chief product and technology officer.
H ere’s the daily round-up from The Telegraph’s Money team:
- Women face £27,000 pension black hole due to pandemic: Women have been disproportionately affected by lockdowns
- The most in demand property hotspots in cities: Smaller cities and outer London boroughs are newly in vogue
- 'Seriously incompetent' adviser fined £1.3m after pension transfer failures: Adviser Geoffrey Armin pocketed millions after failing to warn savers about pension transfer risks
SoftBank profits slide as tech rally cools
T he world’s biggest tech investor, SoftBank Group, posted lower profits today as the pandemic tech rally cooled.
Known for its $100bn Vision Fund, the Japanese group said net profit was ¥761.5bn (£5bn) for the quarter ending in June – a 39pc drop from ¥1.26 trillion in the same period last year.
The group reported Japan’s biggest ever annual net profit in 2020-21, fuelled by tech-share rallies as people moved their lives online during the coronavirus pandemic.
A huge income boost was also provided by an April 2020 merger of US telecoms operators Sprint – which was controlled by SoftBank Group – and T-Mobile.
“It is a significant drop in profit, but if we deduct Sprint and T-Mobile-linked temporary income from both years, the results were not that bad,” chief executive Masayoshi Son said.
However despite losing around £4.3bn on nine holdings including Korean e-commerce company Coupang, investment gains were still at £1.9bn the last quarter.
FTSE 250 inches higher
W hile the FTSE 100 is down 0.04pc, the FTSE 250 has lifted 0.4pc to 23545.55, buoyed by today’s corporate results.
Among the top risers was Watches of Switzerland (up 4.9pc), after the Rolex-seller said wealthy customers were spending their lockdown savings on luxury watches.
WeWork rival IWG was also boosted by its interim results, after it noted a modest recovery in its finances as demand for hybrid working pushed its occupancy numbers back 69pc of pre-pandemic levels.
Google employees working remotely face pay cuts depending on where they live
T wo Google employees from the same office could face drastically different pay cuts if they switch to working from home permanently, depending on where they live.
According to a company pay calculator seen by Reuters, pay cuts for remote work will be calculated according to the area where employees plan to be based.
Screenshots of Google’s internal salary calculator show that an employee living in Stamford, Connecticut – an hour from New York City by train – would be paid 15pc less if she worked from home, while a colleague from the same office living in New York City would see no cut.
One Google employee, who asked not to be identified, typically commutes to the Seattle office from a nearby county and would likely see their pay cut by about 10pc if they decided to work from home full-time.
Interviews by Reuters with other Google employees indicate pay cuts as high as 25pc for remote work if they left San Francisco for other areas of the state such as Lake Tahoe.
“Our compensation packages have always been determined by location, and we always pay at the top of the local market based on where an employee works from,” a Google spokesperson said, adding that pay will differ from city to city and state to state.
Facebook and Twitter also cut pay for remote employees who move to less expensive areas, while smaller companies including Reddit and Zillow have shifted to location-agnostic pay models, citing advantages when it comes to hiring, retention and diversity.
US small business optimism also drops
S mall business owners in the US are also losing confidence in the economic recovery, according to a new survey released today.
The National Federation of Independent Business (NFIB) Optimism Index dropped 2.8 points to 99.7 in July- almost erasing gains the index made in June.
“Small business owners are losing confidence in the strength of the economy and expect a slowdown in job creation,” said NFIB’s chief economist, Bill Dunkelberg.
The quality of labour businesses were able to recruit ranked as businesses “single most important problem,” with 26pc of respondents selecting it from among 10 issues.
“As owners look for qualified workers, they are also reporting that supply chain disruptions are having an impact on their businesses,” Dunkelberg added.
More on Germany’s reemerging Covid concerns
I nvestor confidence in Germany's recovery dropped to the lowest level since late last year after a rise in infection rates stoked concerns over a possible tightening of pandemic curbs.
Although more than half of Germany's population is fully vaccinated, coronavirus infections in Europe's largest economy have risen to 3,000 cases per day in the past five days.
The government has already tightened some travel rules and is set to discuss additional steps during a summit on Tuesday.
Tesla’s China sales drop sharply
T esla shipments of Chinese-made cars to the local market dropped sharply last month, in the aftermath of negative publicity that ended in a recall of 285,000 cars in June.
Tesla reported domestic China shipments of just 8,621 units in July, a 69pc plunge compared to June when Tesla's Shanghai factory delivered 28,138 cars to the local market.
Exports however leapt to 24,347 versus 5,017, with most of those vehicles destined for Europe.
Tesla was initially welcomed in China and the company was the only foreign automaker allowed to wholly own its local operation. However this year relations have soured after a series of protests, crashes and regulatory concerns over safety and customer service.
At the same time, Tesla is facing fiercer competition from local EV startups like Nio, Xpeng and Li Auto.
Li Auto delivered 8,589 cars in July, while Xpeng sold 8,040 vehicles last month. Nio delivered 7,931. It's the first month that domestic upstarts have recorded similar deliveries to Elon Musk’s electric car giant.
Lockdown savings boost Watches of Switzerland
W ealthy households are spending their lockdown savings on expensive watches, according to the boss of the UK’s biggest Rolex seller.
Watches of Switzerland said today that its luxury watch sales in the 13 weeks to August 1 were up 97.1pc to £259.3m, with luxury jewellery sales also 98.9pc higher than the same period last year when stores were shut during lockdowns.
Boss Brian Duffy executive told the PA news agency: “In the UK and US there is accumulated disposable income and we are an attractive category in that sense.”
Although the number of customers fell as a result of the pandemic, the value of each sale was higher, he added.
“There is a willingness for people to trade up and indulge a bit more, maybe buying gold when they were thinking of buying a mix of gold and steel,” he said.
The jump in sales on a two-year basis was 46pc, despite the tourist market remaining weak due to Covid-19 – Mr Duffy said foreign visitors previously made up 30pc of sales.
“It sounds very clever to have pivoted the business to the domestic market but, to be honest, the demand was there,” he said.
Shares lifted 3.7pc on Tuesday.
F TSE 100 has now edged 0.1pc lower as losses by stocks including Abrdn (down 2.2pc) InterContinental (down 2.7pc) and M&G (down 3pc) outweigh gains made by Paddy power owner Flutter (up 7.9pc).
Demand returning for London office space says Derwent
P roperty group Derwent London says demand for London office space is rebounding, with rent collection nearing pre-Covid levels.
The FTSE 250 listed company said business confidence in the capital was stronger than expected in the first six months of the year, boosted by the vaccine programme.
“In our sector this has been reflected in increased property activity levels and the tightening of property yields,” the company said. “We expect these trends to strengthen further in the second half now that most lockdown restrictions have been lifted.”
Derwent added its investment portfolio had increased 1.4pc to £5.4bn in the first six months of the year, offsetting some of the pandemic’s losses. For the most recent payment date, the company said it had collected 95pc of rent owed.
The developer issued an interim dividend of 23p per share, a 4.5pc increase.
Bellway order book rises to record
T he order book for housebuilder Bellway has grown to record levels even as the number of houses it built still lag behind pre-pandemic numbers.
Bellway’s order book reached more than 7,000 homes, an all-time record, and more than 2,200 higher than 2019.
The business said it completed 10,138 homes in the 12 months to the end of July – a third more than in the same period a year earlier but still below the 10,892 homes completed in the year ending July 2019.
Revenue from the past 12 months rose to £3.1bn – 41pc higher than 2020 but 2.5pc lower than 2019.
“Bellway has been one of the most prolific land investors in recent years and this stepped up post the first lockdown and should position the group well to recover strongly from the Covid hit,” said Numis analyst Chris Millington.
Shares rose 0.3pc.
Has Germany's recovery reached an inflection point?
F actory and confidence data from recent days has pointed to a clear slowing in the recovery in Europe's biggest economy, writes Tom Rees .
On Friday industrial production suffered a shock fall for a third consecutive month, putting Germany's vital manufacturing base on its worst run since 2018.
"Whatever the driver, the fall in expectations represents an important shift for markets having priced-in an accelerating recovery since the latter part of 2020," says Claus Vistesen, eurozone economist at Pantheon Macro.
He adds: "The now-clear reversal in the expectations gauge suggests that momentum is peaking. It's possible that this is due to fears that new, and vaccine-resistant, variants will prompt a return of restrictions, but to be clear, growth had to slow at some point."
Business confidence in Germany slumps to nine month low
C onfidence in Germany has slumped to its lowest level this year as fears of a wave of Delta cases grip the region and factories struggle to cope with severe global shortages, reports my colleague Tom Rees.
The closely-watched ZEW Economic Sentiment gauge dropped from 63.3 points to 40.4 in August, the third consecutive fall. It pushed down the investor confidence indicator to a nine-month low.
"This points to increasing risks for the German economy, such as from a possible fourth Covid-19 wave starting in autumn or a slowdown in growth in China," said ZEW president Achim Wambach.
"The clear improvement in the assessment of the economic situation, which has been ongoing for months, shows that expectations are also weakening due to the higher growth already achieved."
B rent has bounced back from the three week lows it slumped to yesterday, on bets that the global demand recovery will remain intact despite the fast-spreading delta virus variant.
Prices have risen 1.7pc today to $70.19.
Deltas spread has sparked concern the pandemic recovery will be derailed. China has re-imposed lockdowns while new coronavirus cases in the US surged to their highest weekly level since early February and deaths increased the most since December.
"What we are experiencing right now is a pause in the recovery," Loreen Gilbert, WealthWise Financial chief executive officer, said on Bloomberg Television.
Philip Morris pivots to a takeover offer in Vectura fight
P hilip Morris has changed its bid for Britain’s Vectura Group to a takeover offer, meaning the maker of Marlboro cigarettes will need a lower level of shareholder support to win the battle for the UK asthma drug maker.
Philip Morris was previously attempting to acquire Vectura via a scheme of arrangement in order, which requires 75pc shareholder acceptances. However now it is instead shifting its bid to a takeover offer, which only needs more than 50pc of investors to vote in favour under UK takeover rules.
Philip Morris is locked in a takeover battle with private-equity firm Carlyle. An auction procedure is due to kick off today that will determine how much each company is willing to pay for Vectura. However the highest bidder isn't necessarily the winner as shareholders will have the final say.
The change in bid could help increase Philip Morris's chances of crossing the necessary threshold to succeed with its bid. Concerns have been raised in recent weeks by a host of respiratory medicine bodies and health charities about the ethical implications of a big tobacco company owning a pharmaceutical company making drugs that treat many illnesses caused by cigarettes.
All parties have agreed to the terms of the auction which will last as many as five business days or until the day neither company makes a revised offer.
Takeover auctions are rare in the UK. The most recent example was earlier in the year during the bidding war for security firm G4S between suitors Allied Universal Security Services and Garda World Security.
Vectura shares rose as much as 1.2pc to 175p in early Tuesday trading.
M&G shares drop 2pc
S hares of M&G fell more than 2pc this morning, after the investment manager reported assets under management were 1.5pc behind consensus expectations of £375.8bn.
Shore Capital analyst Abid Hussain said in a note this was due to a miss at the run off annuity business Heritage.
However the company said half-year pre-tax operating profits came in at £327m, a 6pc rise compared to the same period in 2020.
FTSE risers and fallers
O nline gambling companies are the top risers on the FTSE 100 this morning, after Paddy Power owner Flutter said today that its half-year revenue exceeded £3bn – above the £2.7bn expected by analysts.
Flutter was up 6.4pc while rival Entain , which owns Coral and Ladbrokes, lifted 2.1pc.
However gains were not able to boost the blue-chip index much above yesterday’s closing price and it is currently treading water at around 7,133 points.
At the other end of the index, HSBC shed 1pc while investment M&G was down 1.5pc.
On the FTSE 250, Frasers Group was leading gains, up 3.6pc, while TI Fluid Systems fell 2.9c.
London bitcoin miner hit by attack from short-seller Boatman Capital
A London-listed bitcoin miner linked with potential investment by Elon Musk is facing accusations that it purchased a strip of land in Texas for up to 100 times its actual value, reports my colleague Oliver Gill.
Low-profile research outfit Boatman Capital claims that Argo Blockchain's deal to spend up to $17.5m on land that is allegedly worth just $168,000 raises "serious governance questions about why this deal was done and who benefited".
Flutter shares surge 5.2pc
F lutter shares are surging 5pc after the Paddy Power owner reported revenues in the US had jumped 159pc.
Since online sports betting was permitted by the US Supreme Court in 2018, the market there has boomed as individual states adopt online gambling legislation.
States including New York have legalised the pastime in the past year in an effort to generate taxes and plug pandemic-related budget black holes.
However Flutter has been investing heavily to establish itself in the US, with this spending pushing down its first-half earnings falling by 12pc on a pro-forma basis.
The company said it was spending an average of $291 on acquiring each customer with 1.2 times return on investment.
ABRDN profit jumps as outflows continue
F resh from its much mocked re-brand , asset manager ABRDN has posted a 77pc surge in half year profits, boosted by a rise in fees.
Formerly known as Standard Life Aberdeen, the company said today that adjusted pre-tax profit rose to £163m.
Assets under management and administration dipped slightly to £532bn compared to £535bn at the end of 2020. The company said the drop was due to “flows and corporate actions”.
The interim dividend was kept the same as last year, at 7.3p.
Stephen Bird, chief executive officer, said: “Low interest rates and central bank interventions have created supportive market conditions from which we have benefited. Market volatility is expected to continue due to COVID-19 and its unequal effects in different parts of the world.”
FTSE 100 opens flat
T he FTSE 100 has opened flat, up 0.02pc at 7,133.86.
The FTSE 250 has edged 0.2pc higher, to 23,500.83.
InterContinental Hotels returns to profit
T he InterContinental Hotel Group has swung back to profit in the first six months of the year, reporting a net profit of $48m (£34.6m) compared to a $210m (£151.6m) loss a year earlier.
“Trading improved significantly during the first half of 2021, with travel demand returning strongly as vaccines roll out, restrictions ease, and economic activity rebuilds,” said chief executive Kevin Barr.
“Essential business travel was a key element of our resilience throughout the pandemic, and we are now seeing more group activity and corporate bookings start to come back. These trends and the momentum in the business have continued in recent weeks, including in EMEAA where a lifting of travel restrictions in some markets is also now driving improvements in demand.”
Barr added occupancy had continued to improve, with nearly 50pc of the company’s hotels achieving revenue per available room above 2019 levels in July
However overall, revenue per room was still 43pc below 2019 levels and the Holiday Inn owner said it would not pay an interim dividend.
“Trading has improved significantly during the first half of the year leading to profitability rebounding, and the Board is confident that the proven highly cash generative nature of our business model will allow resumption of dividend payments in due course,” it said.
Flutter results exceed expectations
P addy Power owner Flutter Entertainment said today that revenue exceeded £3bn in the six months to June, exceeding the £2.7bn expected by analysts.
Earnings before interest, taxes, depreciation and amortisation hit £597m, more than £100m ahead of consensus expectations.
The company credited its US business with the rise in revenue, adding revenue in the country had grown by 159pc.
Freetrade analyst Gemma Boothroyd said: “While promising to the naked eye, that growth is driven by six additional states legalising sports betting. Naturally, the market is expanding and opening up in Flutter’s favour and, as it does, it’s vital the entertainment group be at the forefront in capturing pent up demand.”
“The first half of 2021 exceeded our expectations as we made substantial progress against our operational and strategic objectives while maintaining excellent momentum in growing our player base,” said chief executive Peter Jackson.
“Our global sports businesses benefited from further enhancements to our products and the return to more normalised sporting calendars while we sustained our strong performance in gaming despite the challenging comparatives set last year.”
Flutter shares have risen 3.8pc over the past week, as speculation builds that London-listed betting firms could become targets of US takeovers if they post impressive results.
Consumer spending loses steam in July
H ere’s more from my colleague Louis Ashworth on the drop in retail sales:
A post-lockdown shopping boom began to lose steam in July as abysmal weather later in the month was blamed for dampening retail spending.
Total sales rose by 6.4pc over the month compared with July 2020 according to the British Retail Consortium and KPMG, marking a slowdown from June's 10.4pc year-on-year reading despite the continued re-opening.
Helen Dickinson, chief executive of the BRC, said: "July continued to see strong sales, although growth has started to slow. The lifting of restrictions did not bring the anticipated in-store boost, with the wet weather leaving consumers reluctant to visit shopping destinations."
Paul Martin, head of retail at KPMG, warned waning momentum could turn into a drop in shopping spending over the coming months.
"Staffing pressures, increases in commodity and component costs, rising inflation eating into households' spending power and stalling consumer confidence could lead to a slowdown in retail sector growth as we head into autumn," he said.
It came as Barclaycard data showed entertainment spending rose for the first time since the onset of the pandemic, with easing restrictions and the attraction of a 'summer of sport' leading Britons to head out to theatres, cinemas and beer gardens.
Fuel spending hit the highest level since the onset of Covid-19 in the UK, pushed by an increase in staycations and leisure travel, the reopening of offices and higher prices at the pumps.
Pubs, bars and clubs had a strong month, with spending at such locations up by almost a third.
Raheel Ahmed, Barclaycard's head of consumer products, said: "While some sectors took a small step back as the post-lockdown 'honeymoon' period cooled, July was a positive month overall. However, with inflation expected to rise, it will be interesting to see how this impacts consumer spending behaviour over the coming months."
The latest cash tracker data from the Post Office showed further signs that different kinds of activity picked up as the summer got into swing.
Britons made a record £665m in cash withdrawals during July, the highest ever recorded for a month outside of the traditional December peak.
FTSE to slide as bad weather hurts retail sales
G ood morning. The FTSE 100 is set to slip in early trading as rising virus fears prompt traders to proceed with caution. London’s main index is due to start the day 0.13pc lower at 7,066 points, reversing yesterday’s slight gains following a weak performance in US stocks and Asian stocks following big drops in commodity prices.
It came as an industry survey showed consumer spending slowed in the UK’s retail sector in July despite the lifting of restrictions last month. Like for like sales rose 4.7pc last month, down from June’s 6.7pc, despite spending on the theatre, cinema and sporting events climbing. Analysts blamed the rain for curbing spending.
5 things to start your day
1) Deliveroo shares soar as German rival sparks takeover speculation : Delivery Hero takes 5pc stake in London-listed rival following a disastrous float earlier this year, amid hopes of consolidation in sector.
2) Hargreaves Lansdown shares plunge as pandemic trading boom wanes : FTSE 100 investment platform almost lost a tenth of its value, wiping more than £200m off its founders’ fortunes.
3) Ex-Goldman bankers take a big bet on gourmet dog food : David Nolan and Kevin Glynn’s Butternut Box raises another £40m to capitalise on huge rise in pet ownership during the pandemic.
4) London bitcoin miner hit by attack from short-seller Boatman Capital : Argo Blockchain says claims made by Boatman about a deal worth up to $17m to buy land in Texas are “unfounded”.
5) Civil servants could face pay cut if don't head back to the office : Mandarins may be stripped of 'London weighting' – a salary top-up worth £4,000 to offset high costs of living in the capital.
What happened overnight
Asian stocks started off on a weak footing on Tuesday after a largely soft performance on Wall Street and as persistent concerns over the spread of the delta variant of the coronavirus dented sentiment and triggered falls in metals and oil prices.
MSCI’s broadest index of Asia-Pacific shares outside Japan declined 0.4pc in early trading, with Korea’s KOSPI index down 0.56pc while China’s blue chip index CSI300 shed 0.33pc.
Japan’s Nikkei was up 0.9pc while Australia’s benchmark S&P/ASX200 was 0.2pc higher on the back of strong earnings results.
Coming up today
- Corporate : Derwent London, InterContinental Hotels, Flutter Entertainment, abrdn, Gamesys, IWG, Just Eat, Marshall Motor (Interim); Watches of Switzerland, Bellway (Trading update)
- Economics: sentiment survey (EU), smaller companies’ sentiment survey (US), foreign direct investment (China)
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