FTSE 100 Live: Borrowing for the month of March is the second highest since recordings began; Ocado shuts down the Hatfield site

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Public borrowing numbers could pave the way for tax cuts

The latest UK public borrowing figures could give way to tax cuts or higher spending in the fall, according to Ruth Gregory, deputy UK chief economist at Capital Economics.

“The news that total borrowing in 2022/23 was £13.2bn lower than the Office for Budget Responsibility predicted just a month earlier offers the Chancellor more room to maneuver to cut taxes/raise spending before the next general election, which is due by January 2025. “.

“With the next election fast approaching, we wouldn’t be at all surprised to see further fiscal easing in the autumn statement, on top of the £21.9 billion (0.8% of GDP) donation in 2023/24 announced in the spring.”

However, she added, any easing would only be in the short term, as there would be pressure for policy tightening in the future.

However, both parties will likely stick to existing plans to reduce public debt as a share of GDP, and significant fiscal tightening will still be needed after the election, whoever is responsible.

1682407005 AB Foods stock down 4%, FTSE 100 down

The FTSE 100 Index fell 30.08 points at 7882.12 during a session of mixed results on the results day for Whitbread and Associated British Foods.

Shares in Premier Inn owner Whitbread rose 4%, or 123 points, to 3248p after full-year figures, while Associated British Foods lost 4%, or 78.5 points, to 1991.5p.

The downbeat reaction to half-year results from Primark’s business to Ovaltine AB Foods was offset by a 27% increase in shares over the past year.

“AB Foods is on a steady course through ongoing inflationary storms, with Primark remaining a key driver in recovering the group’s fortunes,” said Richard Hunter, Head of Markets at Interactive Investor.

The FTSE 250 index fell 68.11 points to 19,158.83, with pressure continuing on ASOS shares after analysts at Liberum reiterated their “sell” rating. The stock, which was a target for short sellers, fell 9.2p to 740p.

1682407443 More than 2,000 jobs on line as Ocado to close Hatfield facility

Ocado is set to close one of its largest fulfillment centers, putting the jobs of about 2,300 employees who work there at risk.

The online retailer said its Hatfield location was the oldest in the network and is responsible for about 20% of its weekly orders being delivered.

Okado said it has begun consultations with staff and hopes to redeploy “as many as possible” to other locations, including its proposed hub in Luton.

“As the online grocery channel grows, our new and improved fulfillment centers and technologies will drive an incremental change in customer experience and efficiency,” said CEO Tim Steiner.

“With this capacity coming online, it is now time to cease operations at our oldest facility in Hatfield

“We have many bright colleagues at Hatfield who have been with us for a long time and are a big part of our journey. We want to retain as much of this talent and experience within the business as possible and we expect to retain a significant proportion of the affected colleagues.”

Read more here

(Doug Peters / Pennsylvania)

Travis Perkins bemoans the weak homebuilding market with declining sales

Travis Perkins warned of weakness in the new housing market as it reported a decline in revenues.

The builders trader said total sales fell 2.8% in the first three months of 2023, while trader sales fell 4.7%.

“As expected, volumes in the trading business were affected by weakness in the new housing construction and the local repair, maintenance and improvement markets,” said Travis Perkins.

Chief Executive Officer Nick Roberts said: “Timely actions taken to prepare our business for a less demanding environment mean we continue to expect to deliver full year performance in line with market expectations.”

ABF’s principal owner is looking to the southern United States to expand the fashion chain as inflation affects the sugar business

Primark owner Associated British Foods said it is expanding the budget fashion chain into the southern states of the US today, as it reported a decline in the group’s adjusted semi-annual operating profit.

The measure fell 3% at constant exchange rates to £684m, from group revenue of £9.6bn, up 17%. The company, which is also a major sugar producer, said inflation was “extreme and volatile” in the period, and that it was taking longer to recover the effects of higher input prices through its food business.

At Primark, the weakness of the pound in the period eroded margins in the UK and eroded operating profit, but the impact was offset by the chain’s international earrings from the US and Ireland, where revenue converted to sterling gets a boost from such patterns in exchange rates. Sales in the chain rose by almost a fifth to £4.2bn, while operating profit fell to £351m from £414m in the same period last year.

George Weston, Chief Executive Officer, said: “In this period, Primark has succeeded in attracting new customers with its proposition of high-quality goods along with leading prices and well-invested stores. We received a very strong contribution from the new stores opened in that period, and today we are announcing plans to develop our Primark business in the southern states of the United States.”

ABF I’ve stood by ts guidance for the full year.

/ REUTERS1682404546 Premier Inn owners’ profits grow as independent hotels decline

Premier Inn owner Whitbread’s profits have risen above pre-pandemic levels, where he says a “structural downturn in the independent hotel sector” has helped budget hotels gain market share.

Profit was £888m on revenues of £2.6bn, with £2.5bn of that revenue coming from the Premier Inn UK division.

“This is an impressive set of results,” said CEO Dominic Paul. “While the recovery in market demand in conjunction with the structural deterioration in the independent segment provided a useful backdrop, it was the combination of our proprietary initiatives and our distinctly differentiated business model that kept our brand strong and delivered such impressive operating and financial performance.”

1682404027 FTSE 100 saw decline, focus on US earnings

Stocks in London still lack direction after yesterday’s major indices on Wall Street closed broadly unchanged.

The S&P 500 and Dow Jones Industrial Average were flat, while the technology-focused Nasdaq lost 0.3% on uncertainty ahead of tonight’s release of numbers from Alphabet and Google owner Microsoft.

Their shares are up 20% and 17%, respectively, so far this year, with any earnings disappointment prompting investors to reassess expectations for the rest of the year.

Facebook’s owner Meta Platforms is due to report tomorrow night and Amazon’s on Thursday.

The updates come against growing concerns about the economic impact of tightening monetary policy and whether the Fed will announce another rate hike at its meeting in May.

In the UK, CMC Markets expects the FTSE 100 to open 22 points lower, at 7890.

The top flight ended just 2 points lower yesterday after a delayed recovery in the Brent crude price benefited BP and Shell oil inventories.

A red flag for Hornby when the pitcher swings to a loss

Hornby’s profitability hopes were derailed today when the train maker said it expects to swing to a loss this year. That compares to the £1.4m profit after tax the company made last year.

“We expect to report a modest underlying pre-tax loss this year due to higher overheads (in an inflationary environment) and as a result of lower-than-expected sales against budgets,” Hornby said.

The company said it was encouraged by strong trading in the early months of 2023, but didn’t go far enough to make up for the shortfall in sales at the end of 2022.

(Danny Lawson/Penn)

/ Palestinian Authority Archives 1682402959 – The second highest borrowing from the public sector for the month of March in history

Public sector net borrowing last month was the second highest for the month of March since records began in 1993, at £21.5bn.

This figure brings annual public sector borrowing to £139.2 billion, which is 5.5% of GDP. That figure was £13.2 billion short of the Office for Budget Responsibility (OBR) forecast for this year.

During the month, the government received £81.0 billion in taxes and other revenue, up 2% year-on-year, while it spent £104.7 billion, up 16.8%. Much of the increase was due to energy bill subsidies.

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