FTSE LIVE: Germany avoids recession with surprise return to growth

Luxury retailer Burberry has seen its sales in Hong Kong drop sharply in the first six months of the year, amid ongoing political protests.

Back in Britain, Young’s pub chain has blamed ‘poor and unpredictable weather’ for a fall in profit in its latest half-year results today, but still raised its interim dividend to book its  twenty-third consecutive rise.

Bucking expectations, Germany has narrowly avoided a widely-feared recession, but growth remains fragile. The German economy grew by 0.1 per cent in the third quarter, driven by strong consumer spending. Analysts had expected a 0.1 per cent contraction.

London’s top index joined markets worldwide in the red as worrying Chinese economic data and fears over the US-China trade war dented investor sentiment.

The latest figures from China signalled slowing industrial production and retail sales growth in October, raising jitters over the world’s second-largest economy.

Disappointing data from the UK economy failed to knock the pound, despite official figures revealing an unexpected 0.1 per cent drop in retail sales in October.

Luxury fashion house Burberry enjoyed solid share gains as it shrugged off woes in Hong Kong to hike half-year adjusted operating profit by 14 per cent to £203million, while revenues grew 5 per cent to £1.3billion.

The group saw shares lift 3 per cent or 69p to 2129p despite revealing that Hong Kong sales declined by double digits in the first six months of the year due to anti-government protests.

FirstGroup in the FTSE 250 index lost nearly a fifth of its stock market value, plunging 18 per cent or 23.9p to 105.4p.

The bus and rail firm said it sank to a £187.1million pre-tax loss in the six months to September 30 due to ongoing problems in its US Greyhound coach business, which it is offloading.

Back in the FTSE 100, oil giants Royal Dutch Shell and BP were among the list of share fallers as the cost of crude came under pressure.

3i fell 5 per cent or 51.5p at 1073.5p, amid fears the sale of a stake held by the group in discount retailer Action is set to hit its full-year net asset value.

Miners also dragged the FTSE 100 lower, with silver miner Fresnillo leading the sector’s declines – off 19.4p to 636.4p.

Elsewhere, retailer Card Factory shrugged off earlier declines to finish 2 per cent higher, up 3.7p at 158.7p, even though it posted a 0.4 per cent drop in like-for-like store sales over the three months to October 31.

The FTSE 100 biggest risers were Burberry, up 69p at 2129p, Hiscox, ahead 33p at 1282p, Coca-Cola HBC, 53p stronger at 2556p, and Ocado, 23.5p higher at 1157p.

The FTSE 100 biggest fallers were 3i, down 51.5p at 1073.5p, Vodafone, off 5.5p at 159.6p, DCC, 226p lower at 6654p, and Fresnillo, 19.4p weaker at 636.4p.

The Government’s new smart meter roll-out timetable for a device in 85 per cent of homes by 2024 cannot be met, the energy industry has warned.

Trade body Energy UK, which represents suppliers across the country, said its members are being set up for failure and could face massive fines under the deadline.

It took a swipe at the Government’s new proposed timetable in what is the latest in a long line of alterations to the scheme’s targets.

In currency markets, sterling is up 0.07 per cent against the US dollar to $1.2859, while against the euro it is up 0.07 per cent to €1.1686.

Standard Life Aberdeen hailed progress in talks with shareholders after an investor rebellion over executive pay in May.

The investment giant said it could bring forward its plans for a new remuneration policy, after 42 per cent of voting shareholders objected to its pay policy report at its annual general meeting.

Jonathan Asquith was appointed as the firm’s new remuneration committee chairman in September and has had meetings with shareholders since.

The company said he has held 11 meeting with investors so far and discussions in the consultations have proved ‘valuable and positive’.

Findings from the meetings will be brought to the company remuneration committee early next month. Shares in the company were up 0.5 per cent at 310p.

More bus passengers paid with contactless and mobile apps rather than cash on FirstGroup’s local bus routes for the first time in its history, the company has revealed.

According to bosses, 43 per cent of payments were made by cash, with 45 per cent made through non-cash methods, in the latest push towards a cashless society.

Asda bosses have blamed ‘customer concerns over Brexit’ after the supermarket suffered sliding sales over the past three months.

The UK supermarket chain reported a 0.5 per cent decline in like-for-like sales in the quarter to September 30, as it dipped from 0.5 per cent growth in the previous quarter.

Doug McMillon, the boss of Asda owner Walmart, said that Brexit fears ‘continue to negatively affect customer spending patterns’ for the chain.

Asda chief executive and president Roger Burnley added that customers have had ‘little respite’ from political and economic uncertainty in recent months, which has influenced spending.

Retail sales grew at their slowest pace since April 2018 in the three months to October, new official data shows.

The hard-hitting reality of Britain’s High Streets is stark, with shops shutting, big-names going under and the sustained popularity of online shopping hitting bricks-and-mortar based retailers.

In the last three months, British retailers saw sales rise by 0.2 per cent on the previous three months, the Office for National Statistics’ latest figures show.

Month-on-month, sales fell by 0.1 per cent in October, while City analysts had been penciling in a 0.2 per cent rise.

Shares in Portmeirion Group, which sells pottery brands including Royal Worcester, are down 17.65 per cent or 150.00p to 700.00p this morning, after the company issued a profit warning.

In a trading update, the company said: ‘Sales into the South Korean market, specifically for the Portmeirion Botanic Garden ranges, continue to be weaker than expected.

‘It is clear that the significant historic demand in South Korea for our classic Botanic Garden ranges has led to other geographical markets re-shipping into South Korea, resulting in overstocking in this market.’

The group added: ‘Whilst we are confident that the strategic investments outlined above will result in improved manufacturing efficiencies and sales growth in 2020, these will inevitably impact 2019.

‘As such, we now expect that the profit for 2019 will be materially behind current market expectations.’

Estate agents are facing an uphill struggle to flog homes up for sale over the £1million mark, with nearly 70 per cent in the sector admitting they end up selling them for below asking price.

While homes up for sale for £500,000 or less are typically selling closer to asking price, across all types of property, sales remain hampered by ongoing political and economic uncertainty, the Royal Institution of Chartered Surveyors said.

New sales instructions fell for the fourth consecutive month in October, but ‘less severely’ than in September when they tumbled at the fastest pace since Britain voted to leave the EU in a referendum in 2016.

The ongoing political drive to encourage motorists to switch to the latest low-emitting electric and hybrid cars is pushing more drivers to buy second-hand vehicles which are likely to be more polluting, new figures suggest.

The used car market grew almost one per cent in the third quarter of 2019 in the shadow of plummeting new vehicle registrations, data from the Society of Motor Manufacturers and Traders shows.

It is the first time in 27 months used car sales have risen as drivers are potentially spooked as to whether new motors will be hit by clean air zones and the fast depreciation of new cars when driven off the forecourt.

Across the UK, 1,330 properties mortgaged by homeowners were repossessed in the third quarter of this year, up by nearly a fifth, or 19 per cent, on the previous year.

Some 800 buy-to-let mortgaged properties were repossessed in the third quarter, marking a 40 per cent increase on the same period of 2018.

Trade association UK Finance, which released the figures, said the increase was partly driven by a backlog of older cases being processed in line with regulatory requirements.

Hitherto resilient #UK #consumers have recently shown more signs of caution amid myriad of #economic, #political & #Brexit uncertainties. And consumer fundamentals likely peaked around July. Employment is off record high & earnings has dipped from 11-year high. But inflation low https://t.co/j7r0KzLVL7

The Government’s new smart meter rollout timetable for a device in 85 per cent of homes by 2024 cannot be met, the energy industry has warned.

Trade body Energy UK, which represents suppliers across the country, said its members are being set up for failure and could face massive fines under the deadline.

It took a swipe at the new plan after officials were forced earlier this year to abandon their original target of a smart meter in every home by 2020.

‘At best only 68%’ of homes will have a smart meter by the deadline, research commissioned by Energy UK shows.

In a letter to the Department for Business, Energy and Industrial Strategy, seen by the PA news agency, the trade body said it ‘will not be possible’ to reach the 85 per cent target.

Rural households could end up paying more for their energy as many don’t have access to the same smart meter technology, new research claims.

Only 34 per cent of rural homes have a smart meter installed compared to 43 per cent of city homes, according to a study by BoilerJuice, a supplier of heating oil.

This can lead to those in rural areas, in some pockets of Britain, paying up to £320 more a year for their energy, data suggests.

Ed Monk, associate director for Personal Investing at Fidelity International, said: ‘With many of the UK’s largest retailers unveiling their festive adverts this week, the countdown to Christmas is well and truly on.

‘However, this morning’s retail sales figures – which once again show households cautious in their spending – suggest it could be a long, hard winter. The sales periods around Black Friday and Christmas will, once again, prove crucial.

‘While a first winter election since 1923 is likely to prompt further caution amongst spenders, whether this detracts from the usual Christmas sales spree awaits to be seen.

‘With the end of the year drawing close, stalling wage growth and a slowing rate of inflation highlight the strain the economy is under. The coming weeks will be key in helping to decide the sort of saving and spending resolutions households around the UK make as we enter the New Year.’

Motorola has revived its popular Razr flip mobile phone as a modern smartphone with a foldable screen.

Unveiled in the US, the reinvented Razr has a 6.2-inch screen which folds in half to shut in the same way as older ‘clamshell’ handsets.

Flip phones such as the original Razr were popular in the early 2000s, when the screen and physical keyboard were separated by a hinge which folded the device closed to fit easily into a pocket.

The updated Motorola device has replaced the physical keyboard with a foldable screen which fills the entire inside of the phone.

When closed, Motorola said the new Razr also has a 2.7-inch Quick View Display on which users can view and respond to notifications.

It will first go on sale in the US in December for $1,500 dollars (£1,168), but a UK release date and price are still to be confirmed.

In the three months to October 2019, the quantity bought in retail sales increased by 0.2% when compared with the previous three months.This is the lowest growth since April 2018 https://t.co/syp0WSqHE8 pic.twitter.com/07gp14VyNf

Samantha Seaton, CEO of Moneyhub, said: ’It’s astonishing that in 2019 equal pay is still an issue that we need to discuss.

‘However, the reality is that women are still paid less than men in many job roles and this can have knock on effects across their life.

‘If you earn less, than it follows that you will also save less for the future. Research from the Pensions Policy Institute found that women are saving only a third of the amount men do for their retirement meaning they could be left with £100,000 less at the point of retirement.

‘Given that women generally have longer life expectancies than men, this could leave women woefully underprepared for retirement.

‘While we may not be able to fix the gender pay gap over night, it’s important that women are taking steps to improve their future financial health.’

Russ Mould, investment director at AJ Bell, said: ‘The launch of John Lewis’ festive TV advert is seen as the start of the Christmas season for many people, getting them in the mood to start shopping for gifts and cards.

‘Retailers such as Card Factory will no doubt be hoping that the sight of Edgar the dragon on the nation’s screens will put a festive spark among the public and encourage them to open their wallets.

‘The tradition of sending Christmas cards by post seems to be in decline so Card Factory will have to push ancillary items more, such as wrapping paper, sticky tape and gift boxes, in order to keep driving up sales.

‘It needs all the help it can get, given that like-for-like sales for the nine months to 31 October were only up by a mere 0.9%. Higher staff and storage costs are putting pressure on margins, meaning that Card Factory has to find ways to mitigate these rising costs elsewhere.’

Young’s pub chain blamed ‘poor and unpredictable weather’ for a fall in profit in its latest half-year results today, but still raised its interim dividend to book its 23rd consecutive rise.

Pre-tax profit fell 6.4 per cent year on year to £24.3million in the six months to the end of September.

That fall came despite a 7.3 per cent increase in revenue to £168.2million, compared to the same period a year ago.

More bus passengers paid with contactless and mobile apps rather than cash on FirstGroup’s local bus routes for the first time in its history, the company has revealed.

According to bosses, 43 per cent of payments were made by cash, with 45 per cent made through non-cash methods, in the latest push towards a cashless society.

The detail came as FirstGroup said it sank to a £187.1million pretax loss in the six months to September 30 due to ongoing problems in its US Greyhound coach business.

On the company’s preferred underlying basis, which excludes one-off costs, it recorded a pretax profit of £28.7million.

Burberry said it is renegotiating leases with landlords in Hong Kong after ongoing protests led to a massive drop in sales in the city.

The British fashion house said sales in the region declined by double digits in the first six months of the year, and warned that more was yet to come.

‘We … expect sales in Hong Kong to remain under pressure,’ the company said in a statement to the markets today.

The figure dropped to 5 per cent in the most recent quarter, chief financial officer Julie Brown said on a call with reporters.

She said the group had been forced to close some stores to keep staff safe but none had been damaged.

She did not reveal any plans to close stores permanently; however, she said the group is trying to renegotiate leases with landlords.

Yet, despite these pressures, and against what some analysts were expecting, the company still managed to increase adjusted operating profit by 14 per cent over the period to £203million.

In the last six months, Germany’s economy has grown by 0.1 per cent. Analysts had been expecting economic growth to fall.

On the year, gross domestic product in Europe’s largest economy expanded by 0.5 per cent from July through September after a 0.3 per cent expansion from April through June, seasonally adjusted figures from the Federal Statistics Office showed.

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Post time: Nov-25-2019
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