BUSINESS LIVE: Boohoo sales slump; AstraZeneca to pay $435m settlement; Greggs revenues soar

Safestyle shares sustained their downward spiral after the firm warned it would be unable to pay its debts should expected losses come to fruition.

Britain’s largest doors and windows seller said it was compliant with the covenants of a £7.5million borrowing facility, which it intends to utilise in the coming months to uphold ‘working capital and liquidity requirements.’

Just before close, the FTSE 100 was 0.47% lower at 7,475.48.

Meanwhile, the FTSE 250 was 1.42% lower at 17,721.35.

Households could soon have to pay up to 44 per cent more for water, with some paying almost £200 extra a year.

Proposed bill increases over the next five years will pay for £96billion of improvements to the UK’s water network – including building 10 new reservoirs and cutting leaking pipes by 25 per cent.

Britons ripped off in the Payment Protection Insurance scandal have launched fresh legal action worth up to £18billion aiming to end PPI claims ‘once and for all’.

While the first set of PPI claims was based around mis-selling, this new action alleges banks and credit card companies secretly took huge commissions of up to 95 per cent from customers who signed up to the insurance product.

British baker and fast food chain Greggs is considering an overseas trial of its products next year, its chief executive has said.

Greggs, which also reported strong sales growth on Tuesday, abandoned an attempt to sell baguettes in Belgium 15 years ago after it failed to prove profitable.

Clothing brand Abercrombie and Fitch has said that it has recruited an ‘outside law firm’ in order to investigated the shocking allegations of grooming and other sex crimes allegedly perpetrated by former CEO Mike Jeffries.

The allegations were made in a BBC documentary that aired in the UK on Monday night. The film accused Jeffries and his partner Matthew Smith holding sex events around the world in which young men were forced into intimate acts.

Petrofac has won another bumper contract from the UAE’s state-owned oil giant to provide equipment for a major Middle Eastern carbon capture scheme.

Abu Dhabi National Oil Company (ADNOC) has awarded the London-based energy services business a $600million (£497million) deal to supply carbon capture units, pipeline infrastructure and several sequestration wells.

The investment grade wine market has lost some of its fizz in 2023, with prices slumping and fewer bottles trading hands.

Industry insiders believe investment grade wine now offers an attractive entry point for new investors, with analysts tipping the market to maintain its strong trajectory of recent years.

British Gas has extended its offer of half price electricity every Sunday, meaning customers will be able to save over the festive period.

The energy supplier introduced its PeakSave Sundays offer over the summer, in a bid to get its customers to use power outside of peak hours.

Sharon White’s decision to step down as chair of John Lewis follows a disastrous three-year reign that saw the retailer to Middle England lurch from one crisis to another.

Dame Sharon informed the board of the department store and Waitrose owner yesterday that she would not seek a second term – meaning she will finally leave the role in February 2025.

EasyJet parent company EasyGroup has taken legal action against East Midlands-based musicians Easy Life, labelling the bandmates ‘brand thieves’.

Easy Life, a band which boasts roughly a million monthly listeners on Spotify, told fans on Twitter on Tuesday that ‘EasyJet are suing us for being called Easy Life’ and ‘forcing us to change our name’.

AstraZeneca will pay a $425million (£351million) settlement to bring an end to claims in US courts regarding its heartburn drugs Nexium and Prilosec.

Reports suggest the settlement comes in the wake of claims the pharma giant failed to warn patients about potential risks associated with the drugs.

Britain’s information watchdog has warned companies that employee monitoring must be ‘necessary’ and ‘proportionate’, with those overstepping the mark facing potential legal action

The Information Commissioner’s Office said on Tuesday that employers must ‘respect the rights and freedoms of workers,’ who must be told ‘the nature, extent and the reasons’ for monitoring in a way they can easily understand.

The Prime Minister’s decision last month to delay the ban on sales of new petrol and diesel cars by five years to 2035 sparked a mixed response.

While many motorists welcomed the extended stay of execution for internal combustion engine (ICE) models, manufacturers and industry bodies criticised Rishi Sunak’s moving of the goalposts having already invested billions of pounds in electric vehicle (EV) projects to meet the original deadline of 2030.

Boohoo has cut its annual turnover and profit expectations following a weak rebound in sales volumes.

The online fashion retailer now forecasts adjusted underlying earnings to decline to between £58million and £70million for the year ending February 2024, having initially guided for £69million to £78million.

BP’s acting boss insisted that the oil giant’s green drive is on track following his disgraced predecessor Bernard Looney’s exit.

Murray Auchincloss, who was the energy group’s finance chief before stepping up to be interim chief executive, said ‘one person leaving does not change the strategy’.

One of the longest strikes in Hollywood history came to an end last week after the writers’ union and studios reached a deal about the future of artificial intelligence.

Over 10,000 writers had taken to the picket line in a 148-day-long strike about the technology and how it could be used to undercut their work.

Mamta Valechha, equity research analyst at Quilter Cheviot:

‘Greggs delivered a strong trading update with total sales up more than 20% in the quarter. The company has managed to find areas of growth in a difficult market and as such continues to gain market share, driven by increased customer visits, and the ongoing development of the evening trade and trading across the Greggs App.

‘Greggs has been really successful in recent years are diversifying its revenues streams and it is now seeing these efforts come to fruition. Evening trading is gaining further traction, with post-4pm sales now making up 8.8% of total transactions. Additionally, transactions made on its app have also accelerated to 13.1%, which should drive higher purchase frequencies through the Greggs loyalty scheme.

‘It is now moving further into the delivery space following a successful trial with Uber Eats, who will sit alongside existing partner Just Eat. Greggs expects to have around 500 shops live by the end of October, and more to come in 2024. It is also continuing to roll out its store openings, with 82 net new shops opened this year. With work going on in the background with logistics and supply chains, Greggs is positioning itself really well for when this inflationary period subsides and consumer confidence returns to more normal levels.

‘Indeed, Greggs is already seeing inflation pressures easing and given its compelling proposition we continue to think Greggs offers investors good value.’

Rolls-Royce was one of six firms shortlisted by the Government yesterday to develop factory-made small nuclear power plants as part of the drive for cleaner energy.

The aim is to build a fleet of small modular reactors (SMRs) which can be set up more quickly and cheaply than larger more conventional reactors.

Oil services firm Petrofac has received an over $600million contract from ADNOC Gas for Habshan carbon capture and storage project as the Abu Dhabi-based company steps up its decarbonisation plan.

The contract involves delivery of carbon capture units, associated pipeline infrastructure and a network of wells for carbon dioxide recovery and injection, the London-listed company said in a statement.

Petrofac shares are up 1.6 per cent in early trading

Food prices fell last month for the first time in two years, bringing slight relief to the budgets of struggling shoppers.

Prices were down 0.1pc month-on-month in September, according to data from the British Retail Consortium (BRC).

However, prices were still 9.9pc higher than in September last year, though the rate of year-on-year inflation was slower than the 11.5pc rise seen in August.

The decline was driven by fresh food inflation, which fell to 9.6pc in September from 11.6pc in August, its lowest level in 14 months. The drop came as overall shop price inflation slowed to 6.2pc year-on-year from 6.9pc, the lowest reading since September 2022.

The BRC said ‘fierce’ competition between retailers, helped by easing cost pressures, had helped with the month-on-month decline in food prices.

Mark Crouch, analyst at trading and investment platform eToro:

‘Greggs has cooked up another robust update for investors, with a major uptick in sales in the third quarter. A significant driver of that increase is down to the development of evening trading, which now makes up nearly a tenth of all sales. The nation’s favourite baker’s app, too, is proving a hit with customers.

‘The outlook for growth looks strong, too. Greggs expects a 135-145 net new store openings this year, which would be a record. Add to that the major expansion of its delivery service, which will see 500 of its shops live on the Uber Eats platform by the end of the month, and there is the potential for serious growth.

‘Let’s not forget, too, that the economic outlook is still fairly bleak and many people are still struggling, even if inflation is easing slightly. It’s those sorts of conditions that allow companies that focus on value, such as Greggs, to thrive.’

London-listed stocks are trading lower this morning, weighed down by energy and mining companies as prices of most commodities fell due to a stronger dollar, while Boohoo shares have slumped after the fashion retailer flagged a decline in annual revenue.

Industrial metal miners have slipped 0.4 per cent, while precious metal miners shed 1.1 per cent, tracking prices of metals, including copper and gold.

The dollar has reached fresh 11-month highs against major peers after the US government avoided a partial shutdown while the manufacturing data fuelled expectations the Federal Reserve will keep rates higher for longer.

Boohoo has pummeted 10 per cent as the online fashion retailer said its revenue fell 17% in the six months to August and warned of a similar decline for the full year due to a slower-than-expected recovery in sales volumes.

Josh Warner, market analyst, City Index:

‘That will be a hard update to swallow for investors as it ultimately means it will take longer for Boohoo to turn around its fortunes than previously hoped.

‘The company did well to clear inventory, but sales are now set to drop by double-digits over the full year and it has signalled that Ebitda is also at risk of falling too – having previously signalled that both measures would grow.

‘That suggests Boohoo is in a similar position to its rival ASOS, which revealed last month that it also shifted more inventory than expected but also cut its guidance as sales remain under pressure.

‘Investors may be fearful that the challenging economic outlook could cause more trouble for the pair going forward, with signs of a pullback in consumer spending already having hit the pair’s guidance.’

Matt Britzman, equity analyst at Hargreaves Lansdown:

‘The beloved bakery chain continues to delight. Greggs is starting to build quite the reputation for delivering strong results, and today’s update certainly hasn’t bucked that trend.

‘Once heralded for its sausage rolls, Greggs has worked hard to expand the menu whilst retaining its core value offering. All the while, the expanding delivery service (like the new partnership with Uber Eats), click & collect options, and later opening times make it easier than ever to get your bakery fix.

‘Inflated costs are starting to ease, which gives more wiggle room on pricing over the second half. Don’t be surprised to see a slight cooling effect on like-for-like sales from here, as it laps periods last year when prices moved higher.

‘It’s a win in the long run though, less pressure on costs makes it easier to keep prices in check and retain that coveted value offering.

‘Bears will argue the valuation doesn’t leave a whole lot of room for error, and they’d be right. But with great food comes with even greater expectations and Gregg’s broadening shoulders look strong enough to carry that weight.’

Greggs has maintained its full-year outlook after underlying sales rose in the third quarter and it won market share, demonstrating the resilience of the baker’s value offer in a cost of living crisis now into a second year.

Greggs also said on Tuesday the rate of cost inflation had eased as it annualised the significant commodity-led increases it saw in 2022.

The group’s sausage rolls, steak bakes, vegan snacks and sweet treats have chimed with Britons whose income has been dented by high inflation. Its shares are up 45 per cent over the last year.

Greggs’ like-for-like sales in company-managed shops rose 14.2 per cent year-on-year over the 13 weeks to 30 September, its fiscal third quarter, having been up 16 per cent in the first half. Total sales rose 20.8 per cent.

AstraZeneca will pay $425million to settle product liability litigations against prescription-only acid-reflux medicine Nexium and heartburn drug Prilosec in the US, the drugs giant said on Tuesday.

The agreements effectively resolve all pending claims filed against the company for failing to warn patients about the risk of contracting chronic kidney disease and related issues, except for one in Louisiana, AstraZeneca said – the trial for which is scheduled in April next year.

The company added that it has taken a provision for the settlement payment.

Embattled online fashion retailer Boohoo has warned full-year revenues could fall by as much as 17 per cent on 2022 levels after a slower recovery in sales volumes.

The group reported pre-tax losses widening to £26.4million in the six months to the end of August from £15.2million a year ago.

On an underlying basis, it swung to a pre-tax loss of £9.1million from profits of £6.2million a year earlier.

John Lyttle, group CEO, said:

‘Over the first half we have made substantial progress across key projects and initiatives, including the launch of our US distribution centre.

‘We have seen significant improvements in sourcing lead times and invested in pricing to reinforce our value credentials.

‘We have identified more than £125 million of annualised cost savings that support our investment programme.

‘Our confidence in the medium-term prospects for the Group remains unchanged as we execute on our key priorities where we see a clear path to improved profitability and getting back to growth.’