BUSINESS LIVE: Shell names renewables boss as CEO; THG losses surge – This is Money

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The FTSE 100 closed up 4.77 points at 7282.07. Among UK companies with reports and updates are Shell, THG, Trainline, MJ Gleeson, DFS and Wickes. Read the Thursday 15 September Business Live blog below.
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Michael Hewson of CMC Markets UK sums up the main movers across the FTSE 100 today:

It’s been a mixed and subdued session for markets in Europe today, with the FTSE100 modestly outperforming due to some modest M&A interest in the telecoms space, and outperformance from financials on the back of rising yields, with Lloyds, HSBC and NatWest all higher.
Vodafone shares are higher along with those of Vantage Towers shares are higher, on reports that private equity firms KKR and Global Infrastructure Partners are looking to take a stake in the $13bn Vantage Towers business, of which Vodafone has an 82% stake.
Having slumped sharply over the past couple of days to four-year lows, Ocado shares have enjoyed a modest rebound today with some evidence of bargain hunting taking place given the shares are already down over 60% year to date.
The pain has continued for shareholders of THG this morning after the company issued another profits warning, in the wake of today’s H1 numbers. 
Just before close, the FTSE 100 was only 6.06 points up at 7,283.36.
Meanwhile, the FTSE 250 was just 14.13 points higher at 18,863.33.
Retailers Wickes and DFS have both seen profits take a hit after inflationary pressures prompted a slowdown in the home improvement market.
Both companies still reported modest revenue growth in their latest trading updates against strong prior year comparatives, with Wickes achieving a record turnover of £822.3million.
Russia largest oil company has reported a rise in profits despite being sanctioned over the war in Ukraine. 
Rosneft said its half-year net profits had risen 13.1 per cent to $7.2billion despite ‘adverse external factors’ such as Russia’s tanking economy.
Microsoft’s £50billion mega-deal with Call of Duty video game maker Activision Blizzard has been referred for an in-depth probe by the UK competition regulator.
The Competition Markets Authority has launched a ‘phase-two’ investigation after the tech giant failed to offer remedies to address competition concerns.
Earlier this month, the CMA said the merger could ‘substantially lessen competition’ in the gaming market if Microsoft refused access to some of Activision’s major titles to its rivals.
MJ Gleeson has posted bumper profits after seeing demand for its ‘affordable’ homes expand beyond the first-time buyer demographic. 
The firm told investors on Thursday it is increasingly taking business from customers who would have normally gone for more expensive properties, as they scale back their aspirations amid the cost of living crisis. 
While first-time buyer demand has remained strong since the start of its new financial year in July, the housebuilder and land investor said it has started to see interest from ‘value-driven’ customers. 
Budget airline Wizz Air said it will order another 75 passenger planes from Airbus as it accelerates its expansion plans. 
The company said Airbus had granted it ‘purchase rights’ for the additional jets, with delivery ‘subject to agreement’.
Chief executive József Váradi said:
The combination of Wizz Air’s ultra-low cost operation and the market-leading Airbus A321neo aircraft together create a strong platform for Wizz Air’s future growth in the coming decade as we further strengthen our position as one of the world’s most sustainable airlines.
LVMH, the luxury giant behind Luis Vuitton, Marc Jacobs and Christian Dior, plans to turn off the lights at its stores earlier at night to save energy. 
It said it will start in France in October, turning lights off between 10pm and 7am, with plans to deploy the energy-saving measure in other parts of the world at a later stage.
Its office will go dark at 9pm, and it will also lower temperature settings at industrial sites by 1 degree Celsius in winter and raise them by 1 degree in summer.
The company said the two measures will allow it to cut its energy usage by 10 per cent.
Savings rates are rising rapidly and have reached levels not seen in many years.
The best easy access savings rate has breached 2 per cent – a 2.1 per cent deal from Al Rayan Bank – and the top one-year fixed rate from BLME now pays 3.4 per cent.
JD Wetherspoon has announced it will keep all of its central London locations, railway station and airport pubs open during the Queen‘s funeral.  
While many businesses are closing on Monday as a mark of respect during the sombre occasion, the pub giant has announced it will keep all of its central London locations open.
(AP) – Americans picked up their spending a bit in August from July even as surging inflation on household necessities like rent and food took a toll on family budgets.
U.S. retail sales rose an unexpected 0.3% last month after falling 0.4% in July, the Commerce Department said Thursday. Excluding business at gas stations, sales rose 0.8%.
Sales at grocery stores rose 0.5% , helped by rising prices in food
There was, however, weakening in some areas of discretionary spending with Americans fully aware of inflation’s bite. Business at restaurants ticked up 1.1%, but the pace has slowed. Sales at furniture stores fell 1.3%. Online sales fell 0.7% last month after Amazon’s Prime Day boosted e-commerce sales in July.
“Retailers would probably like to be growing more, especially relative to inflation, but I´m not sure they could realistically hope for much more,” said Ted Rossman, senior industry analyst at Bankrate.com. “Consumer spending habits are changing as the pandemic continues to recede and inflation remains high.”
Microsoft’s £50billion mega-deal with Call of Duty video game maker Activision Blizzard faces an in-depth probe by the UK competition regulator.
The Competition Markets Authority has launched a ‘phase-two’ investigation after the tech giant failed to offer remedies to soothe competition concerns.
Earlier this month, the CMA said the merger could ‘substantially lessen competition’ in the gaming market if Microsoft refused access to some of Activision’s major titles to its rivals.
Microsoft makes the Xbox range of video game consoles and for years has been locked in a battle for supremacy with Japanese giant Sony, the creator of the PlayStation. 
The CMA said merging Activision with Microsoft could allow the tech giant to use games to ‘damage’ competition in the growing market for cloud gaming, which allows consumers to stream games to their devices in a manner similar to what Netflix offers for movies and TV shows. 
Responding to the news that new chancellor Kwasi Kwarteng is actively considering scrapping the cap on bankers’ bonuses, union Unite said the plans were a grave insult to workers.
Unite general secretary, Sharon Graham, said:
Workers will be appalled and angry at these plans. When millions are struggling to feed their families and keep the lights on, the government’s priority appears to be boosting the telephone number salaries of their friends in the city.

Britain’s economy is now dominated by rampant profiteering. Removing the cap on banker’s bonuses will make that worse.
Last year Britain’s banks made £45.6billion of profits. So the Chancellor’s signal to the city is ‘let it rip’ further and further, while the Bank of England lectures workers about pay restraint.
You could not make it up.
Kwasi Kwarteng could ditch the cap on bankers’ bonuses in the emergency budget next week, it was revealed today.
The Chancellor is weighing up dropping the rules – which mean bonuses cannot be more than twice salaries – to boost the City.
Chancellor Kwasi Kwarteng will deliver an emergency ‘mini-budget’ on Friday 23 September to lay out further support to help ease the cost-of-living crisis, according to the Guardian.
More to follow… 
The Bank of England never supported a cap on bankers’ bonuses and thinks there are more effective ways to ensure banks have strong risk management, a spokesperson has said.
It comes as Chancellor Kwasi Kwarteng is reportedly seeking to scrap the limit on bonuses in order to boost Britain’s competitiveness.
‘The Senior Managers Regime, the remuneration rules on deferral, clawback and malus are more effective tools for ensuring bankers take proper account of risks,’ a spokesperson for the BoE said.
No sooner than we announce a new best buy cash Isa it seems another jumps up the our savings rates league table to claim top spot.
Santander has this time seized the limelight in the tax free savings space by launching a new easy-access cash Isa paying 1.85 per cent interest. 
The billionaire founder of outdoor apparel brand Patagonia is giving away the company to a trust that will use its profit to fight the climate crisis.
Yvon Chouinard, 83, said on Wednesday that instead of selling the company or taking it public, he would transfer his family’s ownership to the trust and a non-profit organization.
John Lewis has warned staff they may have to forego their annual bonus unless trading improves substantially in the coming months. 
The employee-owned retail giant, which also owns Waitrose, slumped to a £99million loss in the first half as the cost of living crisis weighed on consumer spending and its costs soared. 
However, it has decided to help staff with the rising cost of living by announcing a £500 one-off payment to full-time workers, with a pro-rata amount for those working part-time. 
– FTSE 100 is up 0.3% to 7,297.89
– FTSE 250 is up 0.2% to 18,878.09
THG has downgraded its annual forecasts after increasing commodity prices and economic uncertainty caused expanding consumer demand to slow down. 
The online commerce group now expects adjusted core earnings of £100million to £130million in 2022, rather than matching last year’s £161million as predicted in previous guidance. 
Hilton Food shares tumbled 30 per cent on Thursday after the food packing business warned profits would be lower this year.
The company, which supplies Tesco’s lamb and beef, said sales volumes have come under pressure as customers are becoming more cost-conscious amid the cost of living crisis.
Demand across its seafood business, a recent addition, was particularly impacted due to an ‘unprecedented’ rise in fish prices.
Hundreds of workers at an Amazon warehouse in Coventry are to vote on potential strike action in a dispute over pay, trade union GMB has confirmed. 
The ballot will close on 19 October, with any industrial action likely to take place in November.
Trainline sales soared to £2.2billion in the first half after a strong rebound in US customers using the platform to buy train tickets to travel across Europe. 
Group net sales in the six months to the end of August were 17 per cent higher than the same period pre-pandemic, boosted by its international division posting growth of 81 per cent to £452million. 
The group said it also attracted ‘record levels’ of new customers in France and Italy, driven by a ‘notable resurgence’ of customers from the US.
Terry Smith has shocked the investment industry by announcing plans to close his emerging markets fund.
The popular stockpicker, who founded the firm Fundsmith in 2010, is to shut the £325million Fundsmith Emerging Equities Trust (FEET) as its performance was not living up to expectations. The move stunned the City, with one analyst saying Smith had ‘fired’ himself from a fund still earning him healthy fees.
Fundsmith currently runs four funds. Its flagship Fundsmith Equity vehicle looks after £23.5billion of savers’ money.  But while an investor who ploughed their savings into Fundsmith Equity in 2010 would now be sitting on six times their money, those in FEET are not so lucky.
The taxpayer could fund £1.6billion in profits for energy firms under Liz Truss‘s bills freeze.
The PM unveiled the huge policy on the day the Queen died, with typical household costs limited to £2,500 for the next two years.
The cost of living crisis is being felt by DFS too.
The sofa retailer said sales had softened markedly in the last three months after the pandemic boom and warned rising inflation could see its customers rein in spending.
Sales volumes across the industry could slump by 15 per cent in the current financial year compared with pre-pandemic levels, according to its worst-case scenario projections.
That would slash its profit to as little as around £20million, even as the business said that its revenue would continue to grow.
DFS pre-tax profit dropped 43 per cent to £58.5million in the financial year that ended in June.
DFS shares are down 13.6 per cent to 117.40p.
Chief executive Tim Stacey said:
This has been the most operationally challenging year that we can remember, with industry-wide Covid-related supply chain issues, double-digit cost inflation on raw materials and ongoing colleague absence and skill shortages.
Looking forward, the UK furniture market continues to be challenging and the outlook for the sector remains uncertain given the macroeconomic environment.
Food packaging group Hilton Food has warned profits will be lower than expected this year as the cost of living crisis is hitting demand.
The company derives most of its sales from preparing red meat for big UK supermarket chains, but recently it also branched out into other countries and other products, like vegan food and fish.
It said pretax profit declined by 9.7 per cent to £19.6million in the 28 weeks to July 17, with margins shrinking and costs rising.
Revenue, however, was 19 per cent higher at £2billion, driven by volume growth and raw material price inflation.
But it said volumes have come under pressure as customers are becoming more cost-conscious and warned profit will be lower.
FTSE 250 listed Hilton Food shares are currently down 30.7 per cent to 652p.
It told investors:
While we benefit from the strength of our diversified business model and continue to grow volumes internationally, Hilton has not been immune from the impact of macroeconomic headwinds.
Across our markets, we have seen volumes come under pressure with the cost of living increasing and consumers becoming ever more cost-conscious. In our Seafood business these trends have been exacerbated with world events leading to unprecedented raw material price increases.
Given these factors, and combined with the impact of start-up costs and rising interest rates, the Board now anticipates that profitability for the year will be below expectations.
Wall Street giant Citigroup has opened a hub in Malaga to offer its staff a better work-life balance.
The US firm chose 27 analysts from more than 3,000 applications across the world for the programme which was launched yesterday.
Ben van Beurden will step down as chief execuitve of Shell at the end of the year after almost a decade in the job, the oil giant confirmed today.
He will be replaced by Wael Sawan, director of the group’s integrated gas and renewables division. 
Sawan, 48, joined Shell 25 years ago and has held various roles at the FTSE 100 group during this time. 
Head of investment at interactive investor Victoria Scholar:
‘THG reported a 60% slide in first half core earnings to £32.3 million on revenues up 12.3% to £1.1 billion. Its gross profit margin also fell from 46.5% in H1 2021 to 42.1% in the same period this year. The e-commerce group said it expects a challenging outlook for consumers ahead and downgraded its full-year sales and profit expectations.
‘It has been a rollercoaster ride for THG shares this year with series of potential takeover bids which ultimately fell through. THG has also been caught up in the broader tech sell-off as rising inflation and interest rates obliterated demand for high growth tech stocks.
‘It was once seen as one of Britain’s most exciting tech hopes, soaring 30% on its first day of trading on the public markets in 2020. However, investors have had a torrid time with the stock lately; shares are down by more than 90% over the past year and down double digits this morning.’
Model train maker Hornby said the hobby industry can ride out the economic storm as it gears up for a bumper Christmas.
The firm, best known for its train sets, also makes Scalextric cars and Airfix model planes, and said its ‘outstanding order book is very strong’ – even better than last year.
London-listed stocks have edged higher this morning, with the FTSE 100 led by gains in banking and mining stocks, while Shell has ticked higher after naming renewables boss Wael Sawan as its new chief executive.
The FTSE 100 is up 0.5 per cent after two sessions of sharp losses following hot US inflation reading that raised bets for more aggressive monetary policy tightening in the world’s largest economy and sparked a global equities sell-off.
Rate-sensitive banks have gained 1 per cent in early trade, while mining stocks have advanced 0.9 per cent as worries about supply disruptions due to Europe’s ongoing power crisis kept metal prices elevated.

Shell is up 0.4 per cent on naming Wael Sawan, its head of integrated gas and renewables division, as chief executive to replace Ben van Beurden, who will step down at the end of this year. 
Older homeowners have seen the value of their properties increase by more than £10,000 on average since the start of the year, as house prices have remained buoyant despite interest rate rises and the cost of living crisis.
So far this year the total property wealth owned outright by over-65s has increased by £101.5billion to almost £3trillion, research from later in life lender Key shows.
Analyst at Third Bridge Lara Martinez:
‘The biggest challenge facing the home improvement sector is the impact of inflation on the cost of raw materials and basic trade products. Our experts expect a growth slowdown in 2022 and then resumed 2.5-3% CAGR growth over the next 12-18 months.”
‘The most urgent task for Wickes is to try to protect their margins. Supply chain disruptions may have eased but raw material costs remain elevated.
;Wickes’s DIY segment is likely to struggle during an economic downturn as low-confidence consumers postpone big-ticket purchases. The Wickes trade division should be resilient and our experts say the business is poised to pivot in this direction.’
Shares in London tumbled after Wall Street suffered its worst performance since the depths of the pandemic.
After a heavy sell-off in New York on Tuesday, the FTSE 100 fell 1.5 per cent, or 108.56 points, to 7277.30 and the FTSE 250 fell 1.7 per cent, or 318.01 points, to 18849.20.
The losses were mirrored across Europe as the main benchmark in Germany sank 1.2 per cent while France’s Cac slid 0.4 per cent.
Shell has named its current head of integrated gas and renewables division Wael Sawan as the oil giant’s next chief executive officer, replacing Ben van Beurden, who will be stepping down at the end of this year.
Wael will take on the role from 1 January 2023, while van Beurden will continue to work as an adviser to the board until June-end after which he will leave the group.
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