(Alliance News) - UK clothing and homewares retailer Next on Thursday remained as dour as ever on Thursday, even while boosting its full-year profit guidance following a strong first quarter.
Investors were more positive. Next shares were up 1.9% in early trade.
Next said full price sales were down 1.5% in the 13 weeks to May 1 on two years ago, before the Covid-19 pandemic, which the company said was a more "meaningful" comparison.
The FTSE 100 constituent said it had assumed full-price sales during period would be down 10%, but beat this forecast by GBP75 million. Next raised its central guidance for full-year pretax profit by GBP20 million to GBP720 million.
Next explained the profit upgrade accounts for the GBP75 million sales beat in the first quarter. It has not raised sales growth guidance for the rest of the year, which remains at 3% higher against two years ago.
Next said first-quarter online full-price sales were up 65% from the same time in 2019, while Retail sales in the UK & Ireland were down 76%. That left total product sales down 0.6%, while finance interest income was down 12%.
Looking ahead, Next said it expects the recent post-lockdown sales surge to be short lived - based on the experience of last year - with sales to settle back toward guidance levels within the next few weeks.
Here is what you need to know at the London market open:
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MARKETS
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FTSE 100: up 0.3% at 7,059.20
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Hang Seng: up 0.7% at 28,628.24
Nikkei 225: closed up 1.8% at 29,331.37
DJIA: closed up 0.3% at 34,230.34
S&P 500: closed up 0.1% at 4,167.59
Nasdaq Composite: closed down 0.4% at 13,582.42
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EUR: up at USD1.2015 (USD1.2000)
GBP: soft at USD1.3905 (USD1.3910)
USD: firm at JPY109.30 (JPY109.26)
Gold: down at USD1,974.30 per ounce (USD1,781.79)
Oil (Brent): down at USD69.18 a barrel (USD69.89)
(changes since previous London equities close)
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ECONOMICS AND GENERAL
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Thursday's Key Economic Events still to come
UK local government elections
0930 BST UK CIPS-Markit services purchasing manager's index
1100 BST Ireland unemployment
1200 BST UK Bank of England interest rate decision
1200 BST UK Bank of England quarterly Monetary Policy Report
1300 BST UK BoE Governor Andrew Bailey press conference
1100 CEST EU retail trade
0730 EDT US challenger job-cut report
0830 EDT US weekly jobless claims
0830 EDT US preliminary productivity & costs
1030 EDT US EIA weekly natural gas storage report
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Polling stations have opened for voters to cast their ballots in a set of elections which could shake up British politics and have profound implications for the future of the UK. On what has been dubbed Super Thursday, polling stations opened at 7am across Great Britain in the largest test of political opinion outside a general election, with the future of the Labour Party and the state of the Union among the issues at play. Scottish National Party leader Nicola Sturgeon's push for a second independence referendum means the stakes are high in the Holyrood contest. In England, as well as local council and mayoral contests, the Hartlepool parliamentary by-election will indicate what progress – if any – Labour has made in regaining votes in its former northern heartlands.
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Prominent travel industry figures have lashed out at the UK government over its plans to make travellers take coronavirus tests even when they have been fully vaccinated. In a joint article in The Daily Telegraph, the chief executives of BA - part of International Consolidated Airlines Group - Heathrow Airport, easyJet, Manchester Airport Group and Jet2 have criticised the UK government for an "overabundance of caution". The group says it is illogical to require fully vaccinated British holidaymakers to pay GBP60 per person to take a PCR test when coming home from a country on the UK's safe "green" list, adding the move would jeopardise the holiday plans of millions of people. "Instead of taking advantage of the success of the vaccine programme the government risks closing the UK off from the rest of the world," they wrote.
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BROKER RATING CHANGES
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BERENBERG RAISES NATIONAL GRID TO 'BUY' (HOLD) - PRICE TARGET 1100 (930) PENCE
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RBC CUTS BOOHOO PRICE TARGET TO 380 (420) PENCE - 'SECTOR PERFORM'
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RBC RAISES RATHBONE BROS PRICE TARGET TO 2020 (1975) PENCE - 'OUTPERFORM'
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COMPANIES - FTSE 100
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Housebuilder Barratt Developments said it has performed well since the start of the calendar year reflecting underlying market strength and strong customer demand for "high-quality sustainable new homes". For the period from January 1 to this past Sunday, total forward sales were GBP3.7 billion, up 31% from GBP2.83 billion at the same time in 2020 and delivered 4,481 home completions, up 28% from 3,504. The increase in completions in the period reflected the delivery of customers' homes in line with the UK government's original Help to Buy scheme and the stamp duty holiday deadlines, Barratt said. Looking ahead, the UK's largest housebuilder by volume said it is in a strong position with substantial net cash, a well-capitalised balance sheet and a healthy forward sales position. Barratt said it expects wholly owned completions for financial 2021 to be between 16,000 and 16,250 homes and to deliver around 650 joint-venture home completions. As a result, it now expects an outturn for the full-year modestly above previous expectations.
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Melrose Industries said in the four months to April 30, trading was modestly ahead of expectations. Melrose said the momentum seen in the second half of 2020 has continued into 2021, with sales in the period being 8% higher than in the same period in 2020. Excluding Nortek Air Management, group sales grew by 4%. Further, Melrose said operating margins achieved in the first quarter of the year continued to improve faster than expected, and cash generation has been encouraging, with Melrose "being cash neutral in the first quarter, in what is traditionally a cash outflow period". Melrose expects the improvements in trading to continue, but noted the growth rate will be hindered to a degree by the well publicised supply issues on semi-conductors in the global automotive supply chain. "We are pleased with our start to the year and hopefully will see this momentum continue for the rest of the year. We are encouraged by the significant improvements made to the GKN businesses being reflected in their financial performance. We are confident that GKN will be as successful as previous acquisitions, a track record illustrated recently by the announced sale of Nortek Air Management," Chief Executive Officer Simon Peckham said.
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COMPANIES - FTSE 250
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Aston Martin Lagonda Global Holdings narrowed its pretax loss in the first quarter of 2021 to GBP42.2 million from GBP110.1 million a year before. Wholesale volumes and revenue both more than doubled to 1,353 vehicles from 578 and to GBP224.4 million from GBP88.8 million, respectively. That allowed the luxury sports car maker to cut net debt to GBP722.9 million from GBP956.1 million. "I am delighted with the great progress we are making as demonstrated by the results we are reporting today, which mark the first steps towards achieving our medium-term targets," commented Executive Chair Lawrence Stroll.
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Rathbone Brothers said total funds under management and administration rose 2.0% in the first quarter of 2021 to GBP55.8 billion on March 31 from GBP54.7 billion on December 31. Total net inflows were GBP700 million, representing an annualised net growth rate of 5.1%.
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Ticket sales app Trainline revealed that the pandemic sent it slumping to a hefty annual loss, but cheered signs that demand for rail travel is returning as lockdown lifts. The group saw its pretax loss widen to GBP106.8 million for the financial year that ended February 28 from GBP80.2 million the previous year after net ticket sales plummeted 79%. It said the first quarter of its new financial year has seen the "first signs of recovery" as net ticket sales have risen with the return of non-essential travel across the UK. Trainline said it is optimistic for demand after seeing a strong pick-up during the summer months last year when restrictions were eased.
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COMPANIES - GLOBAL
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Anheuser-Busch InBev reported a rise in profit in the first quarter and named a new chief executive, as Carlos Brito steps down after 32 years at the company. AB InBev is a Leuven, Belgium-based drink and brewing company which owns brands such as Corona and Budweiser. In the first quarter, underlying profit increased 7.8% to USD1.10 billion from USD1.02 billion a year prior. Revenue rose 17% to USD12.3 billion from USD11.00 billion in the same period of 2020. Total volumes grew by 13% to 135.6 million hectolitres from 119.7 million hectolitres a year before. AB InBev additionally announced the promotion of North America Zone President Michel Doukeris to CEO, effective July 1. Doukeris will succeed Brito, who has served as CEO for 15 years, and has been at the company for 32.
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German carmaker Volkswagen reported a jump in first quarter profits Thursday but warned that a global shortage of semiconductors that has hurt production would have a "more significant impact" in the coming months. The auto giant reported net profits of EUR3.4 billion, up from EUR517 million over the January-March period in 2020 when the first wave of the pandemic closed showrooms and factories. Revenues for the 12-brand group, which includes the Audi, Porsche and Skoda marques, climbed 13% to EUR62.4 billion, it said in a statement. The hike was driven by a rebound in car sales especially in China, the world's largest auto market, and robust global demand for high-profit luxury models, VW said.
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Thursday's Shareholder Meetings
AIB Group PLC - AGM
Amiad Water Systems Ltd - EGM re appointment of non-executive directors
Avast PLC - AGM
Aviva PLC - AGM
BAE Systems PLC - AGM
Costain Group PLC - AGM
Eleco PLC - AGM
Genel Energy PLC - AGM
GetBusy PLC - AGM
Glanbia PLC - AGM
Howden Joinery Group PLC - AGM
IMI PLC - AGM
Indivior PLC - AGM
Jardine Matheson Holdings Ltd - AGM
John Laing Group PLC - AGM
Jupiter Fund Management PLC - AGM
Jupiter US Smaller Cos PLC - GM re name change to Brown Advisory US Smaller Cos
Melrose Industries PLC - GM re disposal of Nortek Air Management
Mincon Group PLC - AGM
Mondi PLC - AGM
Morgan Advanced Materials PLC - AGM
Morgan Sindall Group PLC - AGM
Quixant PLC - AGM
Rathbone Brothers PLC - AGM
Raven Property Group Ltd - AGM
Reach PLC - AGM
Rio Tinto PLC - AGM in Perth, Western Australia
TransGlobe Energy Corp - AGM
Vitec Group PLC - AGM
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By Tom Waite; thomaslwaite@alliancenews.com
Copyright 2021 Alliance News Limited. All Rights Reserved.
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