The FTSE 100 will open at 8am. Among the companies with reports and trading updates today are Hargreaves Lansdown, Pennon, CVS Group and Halfords. Read the Wednesday 29 November Business Live blog below.
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Rolls-Royce boss targets profits boom: Share price hit four-year high
Rolls-Royce shares hit a four-year high as it looks to more than quadruple profits in five years.
Chief executive Tufan Erginbilgic, who took over at the engineering giant in January, vowed to deliver profits of up to £2.8billion by 2027.
New City minister Bim Afolami urges watchdog to loosen grip on City
The new City minister has fired a warning shot at regulators to loosen their grip on the UK’s financial services sector, saying there was ‘no point having the safest graveyard’.
Two weeks after he was promoted by Rishi Sunak, Bim Afolami said the industry’s ‘animal spirits’ must be unleashed at a time when some fear that subdued risk appetite is holding back growth.
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Halfords narrows profit forecast range as Britons cut back
Halfords Group has narrowed its annual profit forecast range, lowering the upper end of its expectations by £5million as Britons cut down on discretionary spending.
Soaring prices of everything from energy to food are forcing consumers to curtail non-essential spending, as they try to make ends meet, while businesses are looking to rein in costs and stay afloat by wooing customers with offers and discounts.
Halfords, which has been shifting focus to steadier revenue streams such as motoring services, said it would accelerate investment in that operating model in 10 towns in the rest of its financial year.
CEO Graham Stapleton said:
‘Despite the challenging and volatile trading environment and slower than expected recovery in some of our markets, we have made a good start to the year, with substantial sales and profit growth, and increased market share across the business. At the same time, we supported our customers through the ongoing cost of living crisis by delivering great value – when they need it most.
‘In the face of continuing economic uncertainty, we remain fully focused on optimising every element of the business, and I’m particularly pleased with the very strong performance of Autocentres, where we are delivering significantly improved returns. In light of this, we are accelerating capital investment in the garage services operating model and customer experience in ten towns in the balance of this financial year.
‘It goes without saying that we simply could not deliver this performance without the hard work and dedication of our fantastic colleagues across the business. I am immensely grateful for their continued support through these very challenging times.’
CMA finds some grocery firms hiked prices beyond cost pressures
Britain’s competition watchdog has found that around three-quarters of branded grocery suppliers hiked prices beyond inflationary cost pressures over the last two years, thereby boosting profits.
The Competition and Markets Authority did say, however, that shoppers could find cheaper alternatives in most cases.
It did find one area of concern, however, with the CMA saying ineffective competition in the baby formula market could be leading to parents paying higher prices.
The CMA said: ‘In all but one of the relevant product categories the CMA looked at, as food prices have risen, many consumers have switched away from brands towards own label alternatives, or reduced their consumption, leading to a decline in brands’ market shares and profits. This switching is positive for competition and allows those able to switch, to lessen the impact of high food price inflation.’
Warren Buffett’s sidekick Charlie Munger dies at the age of 99
One of the world’s most legendary investors has died at the age of 99. Charlie Munger was Warren Buffett’s right-hand man as vice-chairman of Berkshire Hathaway.
Munger died yesterday at a California hospital, the US investment group announced.
In a statement, Buffett, 93, said: ‘Berkshire Hathaway could not have been built to its present status without Charlie’s inspiration, wisdom and participation.’ Buffett once said: ‘We think so much alike that it’s spooky.’
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Water group profits slump
Pennon profits slumped in the first half as the water group was drained by higher input costs, but pricier consumer bills lifted revenues.
The parent firm of South West Water posted an adjusted pre-tax profit of £9.1million pounds for the six-month period ended 30 September, compared with £22.5million last year.
Bristol Water, which was bought by South West Water earlier this year, saw pre-tax profits slump from £400,000 last year to a loss of around £100,000.
Susan Davy, Pennon group chief executive, said:
‘Pennon has continued to make progress in the last six months on delivering for customers and shareholders, improving operational resilience across the group through an 87% step up in investment, supported by a healthy balance sheet.
‘We are executing on our twin track strategy of organic and acquisitive growth in UK water, creating long term value and making progress on what matters most to those across our regions.
I’ am very clear that if we serve our customers well, we serve our shareholders well, which is why we are focused on improving environmental performance, keeping bills as low as possible, developing new water resources, and investing in renewable energy generation.
‘This has helped us deliver a 100% bathing water quality assessment for the third year running and reduce serious pollution incidents this year, but we know there is more to do.
‘Our twin track strategy of both organic and acquisitive growth in UK water ensures we continue to drive long term value, with the Bristol acquisition benefits on track, alongside a growing portfolio of complementary services delivered through our business to business retailers and growing renewable energy business.’
Chinese fast fashion giant Shein eyes £70bn US flotation
A Chinese fast fashion giant is closing in on a stock market listing in New York.
Shein – a staple for many British young women, with tops and dresses from £5 – has filed papers for an initial public offering (IPO), according to Reuters.
Goldman Sachs, JP Morgan Chase and Morgan Stanley have been hired as lead underwriters.
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Hargreaves Lansdown chair to exit
Deanna Oppenheimer will step down as chair of Hargreaves Lansdown after six years in the role, following investor pressure on the investment platform’s performance during her tenure, and will be replaced by Dechra’s Alison Platt.
It follows intense investor pressure from the likes of HL co-founder Peter Hagreaves and reports that shareholders were preparing to vote against Oppenheimer’s reelection at the group’s next AGM.
She said: ‘I’m honoured to have overseen the Board during a period of significant change for the industry and for HL. HL is in a strong position for growth and has skilled leadership which will ensure the company’s future success.
‘Over the last six years our client numbers have doubled to 1.8 million and our share of the direct-to-consumer market has grown significantly from 35% to 42%.
‘I’m delighted to hand over to Alison, whose broad and relevant experience across different sectors will be of great benefit and support to the HL team as they move forward.
‘I would also like to thank Roger for his service and dedication to HL and for staying on over these last few months to support the Chair selection process.’