(Alliance News) – The following is a summary of top news stories Monday.
Online fashion retailer ASOS said Chief Executive Nick Beighton is stepping down, as it warned on profit in the year ahead due to cost pressures and the falling away of Covid-19-related benefits. Revenue for the financial year to August 31 jumped 20% to GBP3.91 billion as retail sales grew 19% to GBP3.78 billion, while pretax profit rose 25% to GBP177.1 million. However, sales growth in the year ahead is expected to be in the range of 10% to 15%, with interim revenue growth in “mid-single digits”. This reflects tougher comparables and industry-wide supply chain pressures. The company expects sales to accelerate in the second half of the year and has laid out plans to generate GBP7 billion of annual revenue over the medium-term. Adjusted pretax profit for the 2022 financial year is expected around GBP110 million to GBP140 million. This would be well below the GBP193.6 million registered for the financial year just ended. ASOS shook up its board to “underpin delivery of the next phase of its global growth strategy”. CEO Beighton is stepping down after 12 years with ASOS, including six as CEO, and a search is underway for his replacement. CFO Dunn has added the COO role and will run day-to-day operations, effective immediately. Katy Mecklenburgh, currently director of group finance, has become interim CFO. Chair Adam Crozier, whose decision to step down was previously announced, will be succeeded by Senior Independent Non-Executive Director Ian Dyson.
AstraZeneca said its long-acting antibody combination reduced severe Covid-19 or death in patients with mild-to-moderate symptoms. The trial met its primary endpoint, with a dose of AZD7442 cutting the risk of developing severe Covid or death by 50% compared to placebo in outpatients who had been symptomatic for seven days or less. A total of 90% of the participants enrolled for the Tackle phase three study were from populations at high risk of progression to severe Covid-19, including those with co-morbidities. AstraZeneca said it will be discussing the data with health authorities, having last week announced the submission of a request to the US Food & Drug Administration for emergency use authorisation for AZD7442.
Credit Suisse’s report into its own failings around the collapse of Greensill Capital has been delayed, the Financial Times reported. The bank had hoped to release findings from the investigation it commissioned – carried out by Deloitte and Swiss law firm Walder Wyss – at its third-quarter results in November, the FT reported, citing people briefed on the plans, but that deadline will now be missed. The newspaper explained that the delays were caused by a raid on Credit Suisse’s headquarters by Swiss police. Documents were seized two weeks ago in connection with the Zurich public prosecutor’s criminal investigation into Greensill’s activities and the way in which Credit Suisse funds that financed the British company’s contentious lending schemes were managed and marketed. While the Swiss criminal investigation is not currently directed against Credit Suisse, the FT said, there is a fear among some senior staff at the bank that its remit could be extended.
The UK division of fast-food chain Burger King is planning an initial public offering on the London Stock Exchange next year, the Times reported on Saturday. Burger King UK, which holds the master franchise for the UK from New York-listed Restaurant Brands International Inc, was bought by private equity firm Bridgepoint in 2017. It is in talks with investment bankers Investec and Numis Corp for the float, according to the newspaper. The Times noted that Burger King UK had sales of GBP117 million in 2020 from 530 restaurants.
Shoppers should expect to see higher food prices, according to the Kraft Heinz chief. Miguel Patricio said the firm is “raising prices, where necessary, around the world” of products including ketchup and baked beans. Patricio said this was because of a lack of truck drivers in the UK and labour shortages and an increase in logistics costs in the US. He told the BBC consumers will need to get used to paying more for food due to the world’s rising population and a lack of land to grow produce. But he also said firms would have to take on the cost rises, adding: “I think it’s up to us and to the industry and to the other companies to try to minimise these price increases.”
Boeing late Friday said it has been awarded a USD1.1 billion contract to extend seeker production for the US Army’s PAC-3 missile into 2026. Under the contract, the Chicago-based aerospace firm said it will produce 1,500 additional seekers in Huntsville, Alabama, as a subcontractor to Lockheed Martin beginning in 2023. The Boeing-built seeker provides guidance data to the PAC-3 interceptor.
European markets were mostly lower Monday, amid continued concerns about tight energy supplies and the effect this is having on inflation. London’s FTSE 100 index was outperforming, up slightly, supported by its cadre of mining and oil stocks, including Rio Tinto, BP and Royal Dutch Shell, up 3.5%, 1.8% and 1.6%, respectively. Brent oil was trading above USD84 a barrel for the first time in three years. Wall Street was called lower, though US market activity will be restricted by the closure of US government debt markets for the Columbus Day holiday. Later this week, on Wednesday, a US consumer price index reading is due.
CAC 40: down 0.3% at 6,541.66
DAX 40: down 0.2% at 15,172.16
FTSE 100: up 0.2% at 7,109.30
Hang Seng: closed up 2.0% at 25,325.09
Nikkei 225: closed up 1.6% at 28,498.20
S&P/ASX 200: closed down 0.3% at 7,299.80
DJIA: called down 0.3%
S&P 500: called down 0.5%
Nasdaq Composite: called down 0.9%
EUR: down at USD1.1566 (USD1.1578)
GBP: soft at USD1.3640 (USD1.3645)
USD: up at JPY112.92 (JPY112.03)
GOLD: down at USD1,753.85 per ounce (USD1,759.55)
OIL (Brent): up at USD84.18 a barrel (USD83.15)
(currency and commodities changes since previous London equities close)
ECONOMICS AND GENERAL
US Treasury Secretary Janet Yellen said Sunday she was “confident” Congress would pass legislation to implement a global tax agreement in the US enacting a minimum international tax on big corporations. The OECD-brokered deal, which sets a global tax of 15%, is aimed at stopping international corporations from slashing tax bills by registering in nations with low rates. “I am confident that what we need to do to come into compliance with the minimum tax will be included in a reconciliation package,” Yellen told ABC’s “This Week,” referring to the federal budget bill currently being debated in Congress. The multi-trillion dollar spending package is the cornerstone of President Joe Biden’s economic agenda.
The US Department of State said that discussions during the first-ever face-to-face meeting between the Taliban and US officials since the militant group’s takeover of Afghanistan were “candid and professional.” A US delegation which travelled to Doha to meet with senior Taliban representatives on Saturday and Sunday “focused on security and terrorism concerns and safe passage for US citizens, other foreign nationals and our Afghan partners, as well as on human rights,” State Department spokesperson Ned Price said in a statement. Price said that the two side also discussed Washington’s “provision of robust humanitarian assistance, directly to the Afghan people.”
Exploratory talks between the three parties hoping to form Germany’s next government resumed in Berlin on Monday, two weeks after the Social Democrats defeated Chancellor Angela Merkel’s conservatives in the country’s federal election. Representatives of the Social Democrats (SPD), the Greens and the business-friendly Free Democrats will continue to discuss areas of agreement and potential conflict. The aim is the formation of a so-called ‘traffic-light’ coalition, named for the colours used in Germany to represent the three parties, with the SPD’s Olaf Scholz as chancellor. The FDP has been reiterating its fundamental positions ahead of the talks. The director of the FDP’s parliamentary group, Marco Buschmann, told Der Spiegel the party’s “red lines” include tax increases and the softening of Germany’s balanced budget rules.
In a National Day address on Sunday, President Tsai Ing-wen stressed Taiwan’s commitment to resist annexation or encroachment upon its sovereignty, warning of China’s growing threat. China and Taiwan “should not be subordinate to each other,” Tsai said in a ceremony down-sized due to anti-coronavirus measures. “We hope for an easing of cross-strait relations and will not act rashly, but there should be absolutely no illusions that the Taiwanese people will bow to pressure,” Tsai said. Tsai’s comments came one day after Chinese leader Xi Jinping reiterated his goal of unifying Taiwan.
Elated Sydneysiders celebrated the end of almost four months of coronavirus lockdown on Monday, putting behind them a period of “blood, sweat and no beers” in Australia’s largest city. Sydney’s more than five million residents were subjected to a 106-day lockdown, designed to limit the march of the highly transmissible Delta variant. With new infections now falling â€“ New South Wales state recorded 496 cases on Monday â€“ and more than 70% of over-16s fully vaccinated, the city is dusting off the cobwebs. From midnight pubs, restaurants and cafes began throwing open their doors to anyone who could prove they were vaccinated.
Travel between the UK and dozens of long-haul destinations such as Mexico and South Africa has opened up. Forty-seven countries were removed from the red list at 4am on Monday, meaning arrivals from those locations will no longer need to spend 11 nights in a quarantine hotel. Meanwhile the Foreign, Commonwealth & Development Office lifted its advice against non-essential travel to a further 42 countries and territories due to the coronavirus pandemic. This follows the removal of travel advisories to 41 locations last week. The changes make it easier for people to obtain travel insurance for trips to those destinations.
Ireland’s foreign affairs minister has accused the UK government of dismissing EU solutions to the Northern Ireland Protocol before they are published. Simon Coveney also accused the British government of “shifting the playing field” away from solving issues around the controversial protocol. He made the comments in response to the Brexit minister’s demand to drop the role of the European Court of Justice from the Northern Ireland Protocol. David Frost is to give a speech on Tuesday, in which he will make removing the role of the ECJ in Northern Ireland a red-line issue. Coveney said European Commission Vice President Maros Sefcovic and his negotiating team have spent months preparing a package to resolve ongoing issues, which they will publish on Wednesday.
Staff shortages and disruption to companies that supply goods and services across industry are restricting prospects for UK economic recovery, according to a new report. Business advisory firm BDO LLP said its research suggested that growth had slowed for five months in a row. The decline has hit manufacturers and services firms, with many businesses having problems recruiting staff. Kaley Crossthwaite of BDO LLP said: “While a gradual deceleration in the pace of growth is to be expected as economies normalise after the pandemic, it is clear that acute labour shortages and supply chain disruption are weighing heavily on productivity.
The International Monetary Fund said it still hasn’t reached a decision on whether its embattled chief Kristalina Georgieva will keep her job. The lack of clarity over her future comes with the IMF and the World Bank set to begin their fall meetings on Monday. An investigation by a law firm has concluded that Georgieva manipulated data in favor of China while in a senior role at the World Bank. The IMF board met again with representatives of the firm, WilmerHale, and with Georgieva over the weekend. The board said in a statement published late Sunday that it made “further significant progress today in its assessment with a view to very soon concluding its consideration of the matter.”
By Tom Waite; firstname.lastname@example.org
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