Half of Evans Cycles stores to close, 440 jobs at risk
Sports Direct (LON: SPD) has bought Evans Cycles out of administration, in a deal which will close half of the retailer’s stores.
Mike Ashley, the Sports Direct boss, also bought House of Fraser earlier this year after the department store fell into administration.
“We are pleased to have rescued the Evans Cycles brand. However, in order to save the business, we only believe we will be able to keep 50% of stores open in the future. Unfortunately, some stores will have to close,” said Ashley.
The cycling retailer employs 1,300 people across 62 UK stores.
Evans Cycles struggled amid the difficult high street conditions, which also led to the collapse of Toys R Us and Maplins.
In the year to October 2017, the group recorded a loss of £2.5 million. The company found itself almost £6 million into the red in 2016 after sales only rose 2% to £138 million.
Matt Callaghan, who is a joint administrator and PwC partner, said: “Evans is a longstanding, well known and trusted brand with nearly 100 years of heritage in the cycling market.”
“To have managed to preserve the business and transfer all staff to the purchaser is particularly pleasing; 2018 has been a very difficult trading year for the business, in part due to the impact of the extended winter weather in the early part of the year and a lack of cash to invest in stores and develop the online platform. A combination of losses, the capital expenditure requirements and tightening credit has led to a liquidity crunch.”
Standard Chartered net profit up 35% in Q3
Financial services provider Standard Chartered (LON:STAN) announced Q3 on-year profit growth of 35%, with income spiking and charges for sour loans falling.
The firm is based in London but focuses its operations in Asia, Africa and the Middle East. Standard Chartered employ 87,000 personnel over 1,200 branches in 70 countries.
Its profits for the third quarter through September stood at $752 million, up from $557 million for Q3 2017. As part of this growth, net interest income grew 8% and credit impairments dipped 67% in the third quarter. As a measure of the bank’s performance in this period, its interest margin rose to 1.58%, up from 1.53% on-year. For the first three quarters of the financial year, Standard Chartered net profits were up 33% on-year, to $2.35 billion.
Company Chief Executive Bill Winters said, “The results for the first nine months of the year reflect our focus on significantly improving profitability, balance sheet quality, conduct and financial returns,”
“Income growth year-on-year was slightly lower in the third quarter impacted by Africa and the Middle East and we remain alert to broader geopolitical uncertainties that have affected sentiment in some of our markets.”
“But growth fundamentals remain solid across our markets and we are cautiously optimistic on global economic growth.”
The corporate and institutional banking division continues to reign supreme within Standard Chartered ranks. The division saw a slight growth in on-year income for Q3, eventually finishing at $1.65 billion. The modest growth was attributed to low deal and client activity due to flat market performance.
In spite of its recent success, the bank could suffer a fine of $1.5 from US authorities, with allegations that it allowed customers to breach Iran sanctions.
“The Group continues to cooperate with authorities in the U.S. regarding an investigation into historical violations of U.S. sanctions laws and regulations,” the bank said in a statement, adding that “in the U.S., the vast majority of the issues pre-date 2012 and none occurred after 2014.”
There is also an investigation by UK regulators into Standard Chartered’s financial crime controls.
“The Group is engaged with relevant authorities to resolve these investigations as soon as practicable. Concluding these historical matters, which could have a substantial financial impact, remains a focus of the Group,” Standard Chartered said.
The firm’s shares are currently trading up 4.15% or 22.1p as of 13:00 GMT, at 554.7p. UBS Analysts have kept their ‘Neutral’ stance unchanged, while Shore Capital have reiterated their ‘Buy’ stance on Standard Capital stock.
eBay rallies with strong Q3 and Q4 forecast
American e-commerce group eBay (NASDAQ:EBAY) have seen their shares rally following strong performance in third quarter trading, and a promising forecast for the fourth quarter. The news comes just after the online commerce giant filed a law suit against its rival Amazon (NASDAQ:AMZN), and Amazon announcing a disappointing third quarter.
The firm’s shares jumped 6% in the last window of trading, with the company announcing net profits of £567 million, which represents a 38.6% on-year increase.
Similarly, the eBay’s revenues jumped 6% on-year for the third quarter and matched analyst expectations at £2.07 billion, with revenues for the next quarter being expected to exceed expectations and peak as high as £2.26 billion.
The retailer attributed much of its recent success to major investments in product developments, brand marketing and simplifying its payment process and boosting its number of active buyers up from 175 to 177 million between the second and third quarters.
“This quarter we continued to make foundational investments to improve the long-term competitiveness of our marketplace while setting the stage for significant growth opportunities,” said eBay president and chief executive Devin Wenig.
“We will continue to innovate the customer experience while executing our growth initiatives in payments and advertising to position Ebay for future success.”
As of 09:30 GMT, eBay shares are trading up 6.35% or $1.74.
William Hill launch £242m bid gambling group Mr Green
William Hill have launched a £242 million bid for Swedish gambling group Mr Green.
The deal will potentially secure an international hub for the business outside of the UK and Gibraltar, as it looks to hedge its business against Brexit.
Currently, Mr Green holds remote gambling licenses in Denmark, Italy, Latvia, Malta, the UK and Ireland.
It is also set to acquire licensing in Sweden by the end of the year.
Thus far, the deal has been recommended to be approved by Mr Green’s board.
‘This proposed acquisition accelerates the diversification of William Hill – immediately making us a more digital and more international business,’ the company chief executive Philip Bowcock said.
‘Mr Green will provide William Hill with an international hub in Malta with market entry expertise and strong growth momentum in a number of European countries.’
‘William Hill will move from a single brand to a suite of brands that can maximise growth opportunities moving forward in new and existing markets.’.
Shares in the UK-based betting company (LON:WMH) are trading +3.85% as of 12.26PM (GMT).
Crawshaws collapse could put 600 jobs to the knife
Meat retailer (LON:CRAW) Crawshaws Group Plc has gone into administration after it failed to raise funds from investors. This news coming just days after another UK food retailer narrowly avoids the chop.
The group were founded in Yorkshire in 1954, and today have 54 stores across Northern England and the Midlands. Following disappointing results for 2018 and its fundraiser flop, Crawshaws are in the process of appointing its administrators, who will seek a buyer for the company.
The firm reported pre-tax losses of £1.7 million for the first half through July, and despite extensive discussions with existing and prospective investors, the company said that they had “not been successful in raising sufficient capital”. As a result of these factors,
“The company does not have sufficient cash resources to effect the required restructuring of the business”.
The statement from the company’s board also added that Crawshaws had, “taken the decision to place the company into administration and intends to appoint administrators shortly with the purpose of seeking buyers for the group’s business and assets on a going concern basis.”
Following the news, the firm’s shares on the London Stock Exchange’s junior AIM market were suspended.
Jaguar Land Rover sales fall 13%
Jaguar Land Rover (JLR) reported a loss for the three months to September, with sales falling 13.2%.
The UK car-maker posted pre-tax losses of £90 million as a result of the fall in sales during the third quarter.
The company reported revenues of £5.6 billion, down 10.9% year-on-year, alongside EBITDA of £511 million.
Pre-tax losses stood at £90 million for the period, which it attributed to weaker sales in China, alongside continued uncertainty regarding diesel and Brexit in Europe.
Jaguar Land Rover, which is owned by Tata Steel, said it was imitating plans to improve profitability.
Prof. Dr. Ralf Speth, Jaguar Land Rover Chief Executive, said:
“In the latest quarterly period, we continued to see more challenging market conditions. Our results were undermined by slowing demand in China, along with continued uncertainty in Europe over diesel, Brexit and the WLTP changeover.
“Given these challenges, Jaguar Land Rover has launched far-reaching programmes to deliver cost and cashflow improvements. Together with our ongoing product offensive and calibrated investment plans, these efforts will lay the foundations for long-term sustainable, profitable growth.”
Back in September, JLR warned that “tens of thousands” of jobs may be at risk if the government fails to reach a Brexit deal.
Shares in Tata Steel (NSE:TATASTEEL) are currently trading -11.50AM (GMT).
Next shares fall as Q3 growth slows
Next (LON:NXT) shares fell on Wednesday morning after the company reported a slowdown in sales growth for the quarter.
Sales for the third quarter were down 8% year on year, and 6.3% compared with the previous year.
However, online sales lifted profits, up 12.7% in the three months to October end.
Despite the somewhat disappointing results, the high-street retailer maintained its full-year guidance.
Back in September, Next reported a rise in sales after a better-than-expected summer trading period.
However, the latest figures suggest the business is still grappling to cope with the shift from in-store to online shopping, with many consumers taking to the ease of the Internet to buy their clothing.
Indeed, Next is one of many retailers that have been struggling as of late.
At the beginning of the year, both Maplins and Toys R Us fell into administration after racking up substantial debts.
Over the course of the year, various other brands have announced store closures as they look to adapt to increasingly tough trading conditions.
Store chains such as Marks and Spencers (LON:MKS), New Look and Waitrose all announced closures in a bid to streamline costs.
Laith Khalaf, senior analyst at Hargreaves Lansdown, commented on the latest figures: “‘Another trading statement from a high street retailer, another clear example of clicks hammering bricks. Like much of the sector, Next is doing the splits as digital and physical sales head in opposite directions.
“As Next rightly points out, clicks and bricks can be complementary, as physical outlets give customers a convenient place to collect and return items. The scale of Next’s finance division business is significant, with £1.1bn of outstanding consumer debt, which is expected to contribute 17 per cent of Next’s profits this year.”
Retailers may be in for some relief in the upcoming months however, after the government announced a £1.5 billion high-street regeneration plan on Monday.
During his highly anticipated budget speech, the Chancellor Philip Hammond announced the initiative, which will fund the creation of board of experts to help local officials develop “innovative strategies to help high streets evolve”.
Shares in Next are currently down -3.24% as of 10.42AM (GMT).
Facebook reports missed revenues & slowing user growth
The latest Facebook (NASDAQ: FB) results have revealed the group to have missed revenues and reveal slowed user growth.
According to the latest results, the number of people who use Facebook on a daily basis was 1.49 billion, less than the expected 1.51 billion.
Sales also fell short of expectations and totalled $13.7 billion (£10.7 billion), a rise of 33%. This is short of last year’s 42% rise.
Mark Zuckerberg said that Facebook “may be close to saturated in developed countries.”
“Our community and business continue to grow quickly, and now more than 2 billion people use at least one of our services every day,” said the Facebook CEO in a statement.
“We’re building the best services for private messaging and stories, and there are huge opportunities ahead in video and commerce as well.”
The social media giant had the strongest user growth in India, Indonesia and the Philippines.
Following the Cambridge Analytica scandal, the group has said there will be big changes to the platform.
“We have a responsibility to protect your data, and if we can’t then we don’t deserve to serve you,” said Zuckerburg.
“We also made mistakes, there’s more to do, and we need to step up and do it.”
Earlier this month, Fthe tech group also announced the launch of a new “war room,” designed to mitigate the spread of misinformation.
“We work closely with the US government, and we have been in contact with law enforcement, both with the foreign influence taskforce at the FBI and the Department of Homeland Security.”
The new team had detected and deleted 82 pages, groups, and accounts last week.
General Electric reveals loss, shares plunge 8%
Shares in General Electric plunged 8% after the group reported worse than expected third-quarter results.
As well as poor results, the conglomerate revealed that it’s accounting was being investigated by the US civil and criminal authorities.
Larry Culp, GE’s new chief executive, was confident in the group and said that the aviation and healthcare divisions remained strong.
“We know what we need to do. Now is the time to execute,” he said.
“It’s going to take some time, but I’m hopeful that we can build that credibility, deliver that performance over time.”
“My priorities in my first 100 days are positioning our businesses to win, starting with Power, and accelerating deleveraging,” he said in a statement.
Culp replaced former chief executive, John Flannery, earlier this month. Flannery had been in the role less than two years but had been ousted after he failed to rebuild investor confidence.
After the group was forced to take a $22 billion write-down on its power division, it missed forecasts and posted a loss of $22.8 billion in the third quarter.
Shares fell to their lowest since 2009.
On the investigation, chief financial officer Jamie Miller said: “We are cooperating with the SEC and DoJ as they continue their work on these matters.”
General Electric was founded in 1892.
In June, France threatened to fine the group if it failed to create the number of jobs it promised.
“Sanctions must set an example. €50,000 should be applied by the end of the year if GE does not stick to its commitments,” said government spokesperson, Benjamin Griveaux.
Shares in the group (NYSE: GE) are trading down 8.29% in pre-market trading.
No-deal Brexit will trigger recession, warns S&P
A new analysis by Standard & Poor’s has said that a no-deal Brexit will tip the UK into recession.
The credit rating agency has warned that falling employment and lower incomes will trigger a recession and a deal must be reached before March.
Although Brexit negotiations have stalled over arrangements for the Irish border, the S&P has said it expects an agreement to be reached before the UK is due to leave the EU.
However, the chance of a no-deal was on the rise and this is something that cannot be ignored by investors.
In the event of a no-deal Brexit, the report has warned of rising unemployment, a 10% fall in house prices, lower incomes and higher inflation.
“Our base-case scenario is that the UK and the EU will agree and ratify a Brexit deal, leading to a transition phase lasting through 2020, followed by a free trade agreement,” said S&P Global Ratings credit analyst Paul Watters.
“But we believe the risk of no deal has increased sufficiently to become a relevant rating consideration. This reflects the inability thus far of the UK and EU to reach agreement on the Northern Irish border issue, the critical outstanding component of the proposed withdrawal treaty.”
“By 2021, economic output would still be 5.5% less than what would have been achieved in a scenario with an orderly exit and transition period for the UK,” the report added.
Whilst Theresa May has ensured that Bexit negotiations are 95% complete, crucial talking points such as the Irish border remain unresolved.
Michel Barnier from the EU has called for a backstop that would keep the Irish border open to trade, creating a border in the Irish sea. This has been rejected by May.