Here are the top business, market, and economic stories you should be watching today in the UK, Europe, and abroad:
Serco upgrades profit forecasts
Shares in outsourcing giant Serco (SRP.L) popped on Friday after the company upgraded its profit forecasts.
Serco said in an unscheduled update: “All of our regions worldwide are performing better than we expected and have increased their forecasts for 2020. In both Group and in the divisions, effective cost control and the ability of our systems to respond efficiently to increased demand has helped increase margins.”
Serco works on everything from the NHS’s Test & Trace programme to housing for asylum seekers on behalf of the Home Office.
The company said recent contract extensions — including a renewal of the work on the Test & Trace programme — mean revenue and profit was set to be ahead of prior guidance. Serco upgraded revenue forecasts by £200m ($155m) to £3.9bn and added £15m to the top end of its pre-tax profit forecasts, taking the range to £160m to £165m.
Shares rose almost 14%.
JD Wetherspoon (JDW.L) has revealed a slump in sales and profits over the last year.
Sales fell 30% to £1.26bn in the 12 months to the 26 July, the company said on Friday. The company fell to a pre-tax loss of £34.1m in the period, down from a profit of £102.5m in 2019.
The performance marks the first per-tax loss for the business since 1984.
When exceptional costs are factored in, JD Wetherspoon lost £94.8m. The pub chain faced exceptional costs of £29.1m linked to COVID-19. Costs include investment in safety measures at its pubs and wasted food and drink while sites were closed.
Shares in the company slumped over 12%.
Superdry waves off CFO
Superdry (SDRY.L) has announced that its chief financial officer is leaving with immediate effect.
The company said Nick Gresham would be leaving, without giving a reason. Gresham joined the company in June of last year.
“Nick joined Superdry at a time of significant change and challenge in the business,” Superdry chief executive Julian Dunkerton said in a statement.
“He has played an important role in putting the Company in a stronger position than it was before he joined and helped to steer Superdry through the impact of the COVID pandemic. I would like to personally thank Nick for all his efforts in supporting me, the Company and all our stakeholders. I wish him all the best for the future."
Shares in Superdry fell 3%.
John Lewis has set out a five-year plan to move “beyond retail,” including building homes for rent and offering new savings and insurance products.
The leading department store announced it would invest £400m in new areas, and aim to make 40% of its profits from them by 2030. It is aiming for profits to reach £200m a year within the next two years, according to the plan published by John Lewis on Friday.
“Our plan means the John Lewis Partnership will thrive for the next century, as it has the last,” said Sharon White, new chairman of the company, in a statement on its website.
UK prime minister Boris Johnson will on Friday make a crunch decision on whether to stick at Brexit trade negotiations or walk away with no-deal.
The prime minister is due to make a statement on the future path of Brexit negotiations later today, according to the UK’s chief Brexit negotiator Lord David Frost. Analysts said he was likely to call off trade talks with the EU.
Johnson’s planned statement comes after the passing of his self-imposed deadline of 15 October. The prime minister said at the start of September that the UK must reach a deal with the EU on future trading relations by mid-October, or would walk away from talks.
Negotiations between the two sides appear to have lost momentum in recent days. Lord Frost tweeted on Thursday evening that he was “surprised” and “disappointed” that the EU had moved away from plans for intense, daily negotiations agreed at the start of the month. The EU has said that “all future moves must come from UK,” Lord Frost said.
European stock markets rallied on Friday, as investors went bargain hunting following Thursday’s sell-off.
Equity markets across Europe had tanked on Thursday, as countries ramped up restrictions to tackle the rising COVID-19 second wave.
However, all three were still trading below levels seen on Wednesday evening prior to yesterday’s sell-off.
Analysts said investors were still cautious as a result of uncertainty around Brexit and US stimulus. Rising COVID-19 cases and increased restrictions around the world were another factor weighing on sentiment.
“There is no scarcity of bad news in the market,” said Naeem Aslam, chief market analyst at Avatrade.
“It doesn't matter if one is looking at the potential coronavirus vaccine's performance or the current earnings season. It is pretty much a dark mood everywhere among investors.”
Additional reporting by Tom Belger
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