BUSINESS LIVE: B&M boosted by new stores; The value of the workspace portfolio decreases; WH Smith’s travel sales are soaring

London-listed shares are in the green this morning, buoyed by weaker-than-expected US jobs data, which fueled expectations of a September rate cut, as investors await the European Central Bank’s interest rate decision tomorrow.

Investors welcomed signs of cooling in the US labor market, where data showed job openings fell to the lowest level in more than three years, reinforcing predictions of a Federal Reserve interest rate cut in September.

The mood also brightened with expectations of a 25 basis point cut by the ECB, which meets on Thursday.

Of the individual shares, Paragon Banking is the biggest gainer on the midcap index with a rise of 9.1 percent after the lender reported its half-year results.

WH Smith posted a gain of 3.2 percent after the British retailer announced its results for the thirteen weeks ending June 1.

B&M is the biggest loser on the FTSE 100 with a drop of 3.2 percent after the discount chain reported its preliminary annual results.

The threat of global conflict will lead to a decade of rearmament as the West strengthens its defenses, the boss of a British explosives maker has warned.

Chemring CEO Michael Ord said the “increasing geopolitical tensions around the world” have prompted governments to increase military spending.

THG founder Matt Molding has increased his stake in the activist investor besieging his online beauty and nutrition company.

The tycoon expanded his stake in Kelso Group for the third time this year. This means that he owns 9.11 percent of the shares of a company that is pressuring him to break up his own business empire.

Mark Crouch, analyst at eToro:

‘Workspace Group’s annual results will reinforce the growing belief that the UK commercial property market is on the road to recovery. Shareholders have been rewarded with an 8.5 percent dividend increase.

“The commercial real estate market has suffered more than most during the pandemic. Work-from-home models remained in place, and as business owners opted to downsize to accommodate the hybrid model and save costs, Workspace Group found itself in a tough spot.

‘Despite these challenges, demand in the capital has remained strong and although shorter leases have resulted in frequent turnover, Workspace Group has capitalized by using the breaks to push rents up, while maintaining an occupancy rate of 88.1%.

‘Interest rate increases may have put a damper on the property bull market, reflected in Workspace Group’s property valuations falling by almost 10%. However, as inflation declines, pressure on central banks to cut interest rates is increasing. And while no one can predict when the cuts will happen, Workspace Group is well equipped to wait until they do.”

Russell Pointon, consumer director at Edison Group:

‘WH Smith’s trading update for the third quarter of 2004 showed that the booming travel business continues to perform strongly, while the high street continues to decline. It’s reassuring to see that the company is on track to deliver on full-year expectations as high street sales continue to decline.

‘Growth has slowed slightly since the interim results, but this reflects a very strong comparison with the previous year.

‘This is in line with their interim results in April, when the retailer announced that the high street newsagents division will become a smaller part of the overall group.

‘Looking ahead, it appears WHSmith will focus on its travel divisions to capitalize on growth opportunities and offset the high street challenges. It will be interesting to see whether the company takes more decisive action on its high street operations as the sector continues to struggle.”

Adam Vettese, analyst at eToro:

‘B&M’s latest update shows no signs of improvement with profits up almost 10%. The company that offers consumers well-known brands at the lowest possible prices has the perfect audience when consumers are burdened by the higher cost of living.

‘Not only that, they want to capitalize by ramping up new store openings to reach a long-term target of 1,200 stores in Britain, adding as many as 45 stores by the end of next year. This will increase the company’s profits on its current trajectory.

‘There’s always a risk that opening too many stores spreads itself too thin, but given the resilient performance we’ve seen in these tougher times, it’s arguably difficult to bet against them.

‘With potentially more favorable financial conditions ahead, maintaining this momentum may prove more challenging.’

The boss of the London Stock Exchange has rejected opposition to controversial plans for Shein to list in London, saying the criticism is baseless.

Julia Hoggett responded to claims that Britain risks becoming a ‘last resort for companies with poor human rights records’ if it opens the door to a £50 billion cash bailout from the online Chinese giant .

Amid the furor of an election campaign in which the desire to be seen as business-friendly and pro-economic growth have been dominant themes, the future of the Royal Mail, a vital part of the country’s infrastructure, has barely been discussed .

The board of Royal Mail owners International Distributions Services (IDS) accepted a £3.6 billion offer from Czech billionaire Daniel Kretinsky as if there was no other choice.

WH Smith has said it is well prepared for the peak summer holiday season as strong sales on its travel sites continue to offset weaker trading in its high street arm.

The group achieved like-for-like sales growth of 4 percent over the thirteen weeks to June 1, with a 5 percent increase in global travel retail and a 1 percent decline in the high street.

But the figures show a slowdown compared to the 15 percent sales growth in the first half of travel retail in train stations, airports and hospitals.

The group is dealing with strong comparative figures from a year earlier, when trade was boosted by the recovery in global travel after the pandemic.

WH Smith said that while sales in its UK high street business, including online, fell, its physical stores ‘performed well’ with comparable sales in the third quarter.

Flexible office work provider Workspace saw the value of its property portfolio fall by 9.5 per cent to around £2.4 billion last year, partly due to the sale of non-core assets to strengthen the company’s balance sheet and invest in more profitable areas.

But the group’s net rental income rose 8.2 per cent year-on-year to £126.2 million in the 12 months to March 30, boosting trading profit by 8.7 per cent to £66 million.

And Workspace boss Graham Clemett noted that the pace of portfolio devaluation has slowed in the second half of the period and expects the decline to mark “the low point of the current cycle.”

He cited expectations of falling interest rates, as well as the group’s “ability to continue delivering price growth and value-added asset management activities.”

He added: Looking ahead, the future looks bright for Workspace as London’s leading provider of flexible, sustainable workspace to SMEs.

“Our scalable operating platform, combined with more than three decades of flexible work experience, puts us in a strong position to maintain our leadership position in this growing market and continue to deliver long-term income and dividend growth to our shareholders.”

Digital marketing company Mission Group has said it is considering a £32.3 million takeover of a rival.

Brave Bison, owner of the Social Chain agency founded by Dragons’ Den star Steven Bartlett, said on Monday it had made an increased potential offer worth around 35.1 pence per Mission share on May 25, after the initial approach had been rejected.

It is an increase on Brave Bison’s initial potential all-share offer, which was worth around 29p per share, valuing fellow Aim-listed rival Mission Group at around £27m.

B&M’s profits rose by almost 10 percent to £629 million last year after the discount chain improved its results by opening 78 new stores.

The FTSE 100 retailer, which sells everything from garden furniture and electrical items to toys and food, has proven resilient during the cost of living crisis.

B&M’s turnover rose 10.1 per cent to £5.5 billion in the 53 weeks to March 30.

“Despite the more challenging comparatives, with continued new store openings and a laser focus on low prices and best retail standards, we remain confident in our prospects for cash generation and profit growth,” said boss Alex Russo.