BUSINESS LIVE: Burberry profit warning; Robert Walters fees fall; House prices fall

Shares listed in London are trading lower this morning as lower commodity prices and political uncertainty in the US weigh on risk appetite. Burberry has also fallen to a 14-year low after the company scrapped its dividend.

Shares in Burberry have fallen 10.7 percent after the company fired CEO Jonathan Akeroyd and warned of profits. The British retailer named former Michael Kors boss Joshua Schulman as its new CEO.

The dismal performance weighed on the personal goods sector, which hit its lowest levels since June 2010, leading to broader declines in the benchmark index.

Industrial metals mine prices fell 1.3 percent, despite copper prices holding steady, offsetting pressure from a stronger dollar.

Political uncertainty in the US has rattled global markets after an assassination attempt on presidential candidate Donald Trump on Saturday bolstered Republicans’ chances of winning.

This week, UK consumer and producer price data are in the spotlight as the Bank of England’s next monetary policy decision approaches.

Investors are pricing in a slightly more than 50 percent chance of a rate cut at the August meeting.

Shares of Robert Walters fell 6 percent after the recruiter reported a decline in net quarterly compensation amid macroeconomic and political uncertainties.

The North Sea’s largest oil producer has abandoned plans to sell its Vietnamese arm to a local company for £65m.

Harbour Energy announced the deal with Vietnamese group Big Energy last year and expects it to be completed this summer.

A top tech investor expects chipmaker Nvidia to reach a valuation of almost £40tn within a decade.

That would make it worth more than the combined market value of the S&P 500, an index of the largest American listed companies.

Aarin Chiekrie, Equity Analyst, Hargreaves Lansdown:

‘Burberry has announced a shake-up at the top, appointing Joshua Shulman as Chief Executive Officer, who has experience at Kors, Coach and Jimmy Choo. Former boss Jonathan Akeroyd has stepped down with immediate effect.

‘The change comes amid a first-quarter trading update that is hard to read for investors. Weaknesses already highlighted by the group at the start of the financial year have been exacerbated, with first-quarter revenue down as much as 20%, excluding the impact of exchange rates.

‘If current trends continue, operating profits are likely to remain below market expectations and the group expects to make a loss in the first half of the year.

‘All this has led to Burberry suspending dividend payments. This is a desperate measure to save cash and strengthen the balance sheet, so the company is not expected to perform better in the short term.

‘The brand’s weakness extends beyond China, with Europe and America also seeing double-digit sales declines. There is still much work to be done to make up for years of underinvestment in the brand. Unsurprisingly, the shares have taken a big hit in early trading. The new boss has a lot of work to do to steady the ship and prove to investors that calmer seas lie ahead.’

According to a real estate website, home prices fell more than usual in July as new sellers tried to avoid the distractions of the general election, sporting events and the summer holidays.

Across the UK, the average asking price for a first-time seller fell 0.4% or £1,617 month-on-month to £373,493 in July, compared to £375,110 in June, Rightmove said.

According to the website, this was a bigger drop than the typical July drop.

The average price decrease in July over the past 20 years has been 0.2 percent.

According to Rightmove, the number of homes sold and the number of new providers on the market is higher than a year ago.

Tim Bannister, director of property science at Rightmove, added: ‘There were three major uncertainties in the property market at the start of the year: when the first rate cut would happen and the timing and outcome of the general election.

‘We now have the political certainty of a new government with a large majority. We expect this to increase confidence among homeowners.

‘It is still early days, but the new Finance Minister’s direct announcements on housing targets and planning reform are positive signs that the government is keen to start delivering on the promises made in its election manifesto.’

Royal Mail is facing mounting criticism over its plan to stop transporting mail by rail.

This newspaper reported last week that the postal company is going to sell its last freight trains after almost 200 years of delivering mail by rail.

The measure drew fierce opposition from unions, politicians and transport industry leaders, amid concerns about jobs.

Robert Walters reported a decline in quarterly net rates as macroeconomic and political uncertainties undermined employee and employer confidence.

Recruitment agencies around the world are struggling to find momentum as clients delay hiring and candidates are reluctant to change jobs in the current uncertain economic climate. Elections in some countries are also putting further pressure on the market.

“Our near-term planning now assumes that any material improvement in confidence levels will be gradual and unlikely to occur before 2025,” Toby Fowlston, CEO of Robert Walters, said in a statement.

Burberry has appointed former Michael Kors boss Joshua Schulman as its new CEO as the British luxury brand warns of profit losses and scraps this year’s dividend.

Burberry has been hit hard by a downturn in the luxury sector over the past year, leaving the 168-year-old British brand struggling as it tried to introduce more expensive brands.

The company said market weakness had increased, causing underlying revenues to fall 21 percent in the 13 weeks to June 29, and as a result it would be adapting its offering to be “more familiar” to its “core customers”.

The decline prompted the board to announce on Monday that CEO Jonathan Akeroyd would leave with immediate effect and by mutual agreement, just over two years after he took over.