BUSINESS LIVE: Sainsbury’s plots banking withdrawal; IDS revenues soar; Watches of Switzerland slashes guidance

TSB has issued an urgent scam warning, after the bank found that a third of ads on Facebook Marketplace could be fake.

The bank is urging consumers to avoid making online purchases on Facebook Marketplace so they don’t fall victim.

The surge came despite fourth-quarter revenues in the US, where it has been expanding its presence, coming in below guidance after shelling out over £270million on customer-friendly sporting results.

In the UK and Ireland, Flutter’s revenue jumped 15 per cent to £2.46billion year-on-year, with sports betting and gaming revenues climbing 12 per cent and 17 per cent respectively in constant currency. This region also saw a 5 per cent rise in average monthly players to 3.9million.

Royal Mail’s parent company achieved its best Christmas for fours years in 2023, but its boss has warned the postal service is not sustainable in its current form.

Martin Seidenberg, the chief executive of International Distributions Services, said it was ‘simply not sustainable’ for the Royal Mail to run a delivery network built to handle 20 billion letters when it currently only delivers 7 billion letters.

Watches of Switzerland shares fell sharply on Thursday after the group became the latest luxury retailer to sound the alarm and issue a profit warning.

The London-listed group slashed its annual revenue forecast, as shoppers rein in splurging on luxury items and economic headwinds prevail.

Watches of Switzerland shares slumped over 30 per cent or 172.4p to 414.6p on Thursday, having fallen over 57 per cent in the last year.

Jeremy Hunt will ‘bang the drum’ for investment in Britain as he seeks to woo business leaders in Davos.

The Chancellor is arriving at the annual meeting of the World Economic Forum in the wake of his Labour rival Rachel Reeves, who has been on a charm offensive since earlier in the week.

The new boss of BP has doubled down on the oil giant’s green strategy despite pressure to close the gap with rival Shell.

Murray Auchincloss was yesterday appointed permanent chief executive – a role he has held on an interim basis since Bernard Looney was forced to quit in disgrace last year.

London-listed stocks are treading water in early trading following a three-day slump, driven by concerns about interest rate cuts coming later than expected.

The exporter-heavy FTSE 100 hovers near a seven-week low after being hit in the previous session, when a slew of economic data and hawkish comments from central bank policymakers dampened the mood.

Watches of Switzerland has tumbled 28.1 per cent, by the most on record, after the retailer of luxury watches slashed its annual revenue forecast as economic headwinds prompted consumers to rein in spending.

Its stock was the biggest decliner among FTSE 250 constituents.

Flutter has climbed 9.4 per cent after the online betting giant posted a 15 per cent rise in fourth-quarter revenue.

Sainsbury is plotting a ‘phased withdrawal’ from its banking operations as the retailer continues to pursue its ‘Food First’ strategy.

Financial products will be offered through ‘dedicated financial services providers’ through a distributed model. Sainsbury’s already does this with its insurance policies.

Currys has forecast full year profit ahead of market expectations after stable gross margins and cost savings offset a fall in underlying sales over the Christmas trading period.

The seller of cookers, fridges, washing machines, TVs, computers and mobile phones said it now expected a full year 2023/24 adjusted profit before tax of £105million to £115million.

Prior to the update, analysts were on average forecasting £104million, down from the £119million made the previous year.

Currys said like-for-like revenue in the UK & Ireland business fell 3 per cent in the 10 weeks to 6 January, with strong sales in mobile, offset by weaker trends in TVs and computing.

‘We’re in a healthy financial position, and our strategy is delivering a consistently improving customer proposition,’ CEO Alex Baldock said.

‘As consumer confidence improves, we’ll be well placed to build on these strong foundations.’

Luxury watches retailer Watches of Switzerland has slashed its annual revenue guidance, as consumers continue to rein in spending and move away from splurging on luxury items.

For full-year 2024 revenue is now expected to be between £1.53billion and £1.55billion, compared with its earlier forecast range of £1.65billion to £1.7billion.

‘The festive period was particularly volatile this year for the luxury sector, with consumers allocating spend to other categories such as fashion, beauty, hospitality and travel. Whilst we are disappointed with this trend, we are encouraged by our market share gains in both the US and UK.

‘I would like to thank our colleagues for continuing to provide high quality service and support to our clients against this challenging backdrop.

‘We remain confident in the markets in which we operate, our model and the delivery of our Long Range Plan announced to the market in November 2023.’

Matt Britzman, equity analyst, Hargreaves Lansdown:

‘With strikes in the rear-view mirror, Royal Mail is starting to deliver the goods once more. That’s welcome news for investors in its parent company, IDS, but we’re far from calling this turnaround a job well done. Royal Mail is fundamentally stuck in the past, and to some extent, that’s out of its own hands.

‘As the UK’s designated postal service, it must deliver letters six days a week – among other things. Given the letter business is in structural decline, with no real hopes of a recovery, that puts Royal Mail in a tricky spot when competitors are free to focus investment on more lucrative areas.

‘Royal Mail must drive top-line growth if it wants to return to profit, and a large part of that needs to come from winning back customers lost while industrial actions wreaked havoc. Early signs are positive, but there’s a long way to go.

‘For now, the chance of breakeven profit for IDS at the group level is entirely propped up by the international business, GLS, which continues to perform well.’

Shares in the owner of William Hill fell after the bookmaker warned plans to increase spending on artificial intelligence (AI) and marketing will hit profits.

With tighter regulations also taking their toll in the UK, gambling giant 888 expects its annual profit to come in towards the lower end of the £340m and £397m range pencilled in by analysts.

Shares sank 1.5pc, or 1.25p, to 79.75p, taking losses for the year to 17pc. The profit warning – its second since September – came as it said cost-cutting has freed up to £30m for AI and marketing.

Royal Mail-owner International Distributions Services achieved its best Christmas in four years in 2023, with revenues rising nearly 10 per cent during the festive quarter.

Royal Mail has suffered several setbacks over the past couple of years, including strikes by postal workers, a cyber security incident, a fine from regulator Ofcom for missed delivery targets and the loss of its 360-year monopoly to deliver parcels from post office branches.

Its turnaround plan has, however, progressed under the leadership of Martin Seidenberg, while customers it lost during the strikes in late 2022 have returned to the postal and parcels company.

IDS, which also operates GLS internationally, reported group revenue of £3.59billion for the three months to December-end, up 9.8 per cent year-on-year.

Boss Martin Seidenberg hailed a ‘marked improvement in both trading and operational performance for Royal Mail over Christmas’, adding that the group has ‘continued to win-back customers’.

He added: We need to build on this momentum. With Ofcom due to publish options for the future of the Universal Service imminently, now is the time for urgent action.

‘We are doing all we can to transform, but it is simply not sustainable to maintain a delivery network built for 20 billion letters when we are now only delivering seven billion.’

Sainsbury’s is planning a ‘phased withdrawal’ from its core banking business, with financial products and services sold by the group set to be provided by third-party firms in the future.

Chief executive Simon Roberts said:

‘We have been clear since we launched our Food First strategy in 2020 that we would concentrate our efforts on our core retail businesses and today’s announcement reflects that strategic focus.

‘It’s business as usual for now at Sainsbury’s Bank and there will be no immediate changes to products and services as a result of today’s announcement.

‘We will of course communicate directly to customers well in advance of any changes to their products and services.’