The Telegraph Citybriefing - June 12, 2014-,

The Telegraph
 
Citybriefing 
LOUISE ARMITSTEADCHIEF BUSINESS CORRESPONDENTFollow Louise on TwitterLOUISE ARMITSTEAD
TOP OF THE AGENDA
A shabby set of results from Mulberry whose annus horribilis has been laced with a 46pc plunge in annual profits. The luxury handbag maker, which this year has issued two profit warnings and lost both its chief executive and its creative director, has reported £14m of pre-tax profits, down from £26m last year. Total retail sales were flat - £163.5m, from £165.1m last year. But worse still is the update for recent trading: like-for-like sales fell an eye-watering 15pc during the 10 weeks to June 7. The company has blamed the costs of opening new stores over the past two years, but the bigger problem has been mis-pricing. Julie Palmer, retail analyst at BTG,  told Radio 5 this morning that Mulberry's mistake was to "double prices across two seasons." She argued that customers would pay £500 for a handbag but not £1000. Today Mulberry has finally agreed. "We have listened to our customers," it has said, "And are introducing attractive new products in the key £500-£800 price range." It has also made efforts at "creating desirable new product". Will it be enough to calm angry shareholders? We'll have the updates on our website shortly.
 
There's better news from Home Retail Group which has reported a 4.9pc jump in first quarter like-for-like sales at Argos and a 7.9pc rise in like-for-likes at Homebase. John Walden, chief executive, has credited the "better weather" and a boost in electrical products at Argos and "big ticket products" at Homebase. A mixed update from Laura Ashley which has reported a 0.9pc drop in total sales in the past 19 weeks but a 0.76pc rise in like for like sales.

Maiden results for two of London's recent stockmarket listings: Britain's biggest pet retailer, Pets at Home, has reported a 11.1pc rise in annual revenues but a drop in pre-tax profits to £22.5m from £26.5m a year ago. Like-for-like sales grew by 2.4pc and underlying earnings rose 12.4pc to £110.7m. Meanwhile,Boohoo.com has shrugged off the concerns raised by Asos's profit warning and reported £10.8m of pre-tax profits, up 237pc from last year. Revenues are up 63pc to £109.8m. Joint chief executives Mahmud Kamani and Carol Kane have said the "past year has been an exciting one."

It's been a bumper year for Network Rail, the owner and operator of Britain's railway infrastructure, which has reported pre-tax profits of £1.04bn, up fro £747m last year. The company says it invested a record £7bn in the network infrastructure last year. Atkins has reported a 16.5pc rise in annual pre-tax profits to £114.2m on the back of a 2.6pc rise in revenues to £1.8bn. AndBalfour Beatty has been selected as the preferred bidder for the £745m Aberdeen Western / Balmedie Project.

Aer Lingus has issued a profit warning. The Irish carrier has warned that profits will be between 10pc and 20pc lower due to a drop in bookings. It has blamed the recent strike threats for driving away customers.
 
Housing is top of the economics agenda, with the RICS Residential Market Survey at last finding signs of the property market cooling. RICS has said members see houseprices growing at 3.6pc over the next 12 months, still double the rate of wage growth but slower than recent figures. In London, prices are expected to rise by 5pc rather than 9pc they thought in March. The CML Monthly Lending trends report is due at 930am. The FT reports today that the IMF has said the "world must act to contain the risk of another devastating housing crash."
 
The big ticket event today is the annual Mansion House dinner tonight with speeches from George Osborne and Mark Carney. In recent years, the Chancellor has used the high profile speech to announce radical bank reforms: last year, it was discussion of the sale of taxpayer stakes in Lloyds and RBS; in 2012, in the midst of the eurozone debt crisis, the £140bn Funding for Lending Scheme was unveiled; in 2011 it was the sale of Northern Rock. This time round, the mop-up from the financial crisis is still on the agenda - Osborne will announce a probe into rigging on the foreign exchange markets, including jail for those who rig markets. But he will also address the fresh concern of the housing bubble.

The Policy Exchange has called for the Government to allow foreign companies to bid for UK energy subsidies to bring down electricity bills. In a report today, the think tank say that by tapping into cheaper European makrets, British consumers could save up to £1bn a year. Meanwhile theCentre for European Policy Studies is holding a conference in Brussels today on "How to organise the electricity market by 2020." 
 
And the FIFA World Cup gets underway tonight with the opening game of Brazil vs Croatia in San Paulo. 
QUOTE OF THE DAY
Juston King, the outgoing boss of J Sainsbury, comments on a 1.1pc decline in quarterly like-for-like sales:
I would prefer sales to be growing, but I don’t think I am leaving on a low. I think if my tenure were to be judged on one quarter that would be a little sad.
FIGURE OF THE DAY
20pc
The drop in Quindell shares after its move to the premium list was blocked
IN THIS MORNING'S TELEGRAPH
Jeremy Warner believes Britain's "boomless boom" has baffled the experts.

Andrew Critchlow reports that an Iraq oil shock would kill the global economic recovery.

Camila Turner writes that Wedgwood is to sell off part of its historic 281-acre Staffordshire site to housing developers.
BEST OF THE REST
The Financial Times (£): The world must act to contain the risk of another devastating housing crash, the International Monetary Fund warned.
The Guardian: Wayne Rooney, Frank Lampard and Steven Gerrard all appear in a ranking of the richest 10 players taking part in thje World Cup, compiled by Wealth-X.
The Mail: Around six-in-10 workers will miss out on the full £155-a-week new flat-rate state pension when it is introduced in 2016.
THE EQUITY MARKETS
The FTSE 100 slid 34.68 points to 6,838.87.
In the US, the Dow Jones Industrial Average fell 102.04 points to 16,843.88, while the S&P 500 dropped 6.90 points to 1,943.89.
BEST OF THE BROKER NOTES
Barclays reckoned Friends Life's recent name change was significant:
We believe Friends Life has taken significant steps over the past 18 months to simplify its corporate structure, and the renaming of the group from Resolution to Friends Life is the culmination of these efforts
COMMODITIES
Brent crude oil rose 0.39pc to $109.95 a barrel. Gold climbed 0.2pc to $1,262 an ounce. More here.
THE MONEY MARKETS
Sterling rose 0.32 cents against the euro to €1.2406 and climbed 0.27 cents against the dollar to $1.6789. More here.

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