BUSINESS LIVE Homebuilders’ profits suffer; Primark sales slowing; Boohoo CFO resigns

The owner of London Southend has warned of ‘significant’ consequences for the airport as he demands he repay a loan worth almost £194 million by February 16.

A fund managed by US private equity giant Carlyle Group took legal action against London Southend last year over alleged breaches of the terms of a convertible loan agreement it signed with the airport in 2021.

Primark’s sales growth slowed during the crucial Christmas quarter but recovered well after unusually warm weather affected trading early in the period.

FTSE 100 Primark owner Associated British Foods told investors that Primark’s like-for-like sales rose 2.1 percent in the 16 weeks to January 6, 2024, compared to 8 percent in the previous quarter.

Some of Britain’s leading housing developers have posted much weaker financial performances after a challenging 2024 for the UK housing sector.

Crest Nicholson reported that sales fell 28 percent to £657.5 million in the 12 months ending in October, while adjusted pre-tax profits fell 70 percent to £41.4 million.

Boohoo’s chief financial officer has left the company with immediate effect, in the latest blow to the retailer after a tumultuous 2023.

The Manchester-based company, which owns Karen Millen, PrettyLittleThing and Dorothy Perkins, told shareholders on Tuesday that Shaun McCabe had left the company ‘by mutual agreement’ after just over two years in the role.

Russ Mould, investment director at AJ Bell, says: The FTSE 100 traded higher on Tuesday, building on Monday’s gains, as US shares hit new record highs for the second straight session.

For now, markets have shaken off their New Year’s malaise, but investors’ renewed optimism could be tested in the short term as central bank meetings quickly approach. At some point, interest rates will have to be lowered if stocks are to maintain their upward trajectory.

Marston’s is the latest hospitality business to toast a good Christmas, suggesting people may have prioritized a night out over a trip to the shops this festive season. As costs fall, an industry that has gone through extremely difficult times over the past four years is slowly taking off.

The closure of Port Talbot’s blast furnaces is undoubtedly a tragedy.

Tata Steel’s decision to close the Abbey Works in South Wales will result in 2,800 jobs being created over the next 18 months, but thousands more jobs will be lost across the supply chain.

The grocer’s banking division offered a range of cards, loans and savings accounts, and its customers, of which there are about 1.9 million, may be wondering what happens next to these products.

Christine Lagarde is ‘woke’ and ‘arrogant’ and not the right person to lead the European Central Bank, a staff survey has found.

A damning poll of more than 1,100 of the institution’s 5,000 staff found that 50.6 percent rated her performance as ‘poor’ or ‘very poor’, amid concerns she was too ‘political’.

Richard Hunter, Head of Markets at Interactive Investor:

‘At this stage, AB Foods expects that the impact of the events in the Red Sea will cause limited disruption to the supply chain and AB Foods will continue to monitor the situation.

‘Meanwhile, the group has pointed out that the product margin improvement that Primark is currently enjoying should protect the group against the costs of such supply chain disruptions, should they occur.

‘Inventory levels are currently in a healthy position and the store opening program and incremental improvements to the offering, especially online, offer a tantalizing glimpse into what could be another year of strong recovery at the retailer, where so many competitors are increasingly blocking the way. find. difficult.’

Wall Street hit an all-time high last night amid an artificial intelligence-inspired tech boom.

On a banner day for investors, the Dow Jones Industrial Average crossed the 38,000 mark for the first time, while the S&P 500 and Nasdaq extended recent gains.

It came as a strong run among tech giants such as Apple, Google owner Alphabet and Facebook parent Meta pushed the indexes to set records.

Boohoo’s financial director has resigned with immediate effect, the controversial clothing retailer announced on Tuesday.

The group has hired former Betfair and Zoopla chief financial officer Stephen Morana as its new CFO, replacing Shaun McCabe.

Boohoo confirmed the trading was in line with market expectations and said McCabe’s departure was “by mutual agreement and with immediate effect.”

Primark’s sales growth slowed during the crucial Christmas quarter and owner Associated British Foods warned it could face additional delivery costs due to the disruption in the Red Sea.

Primark’s like-for-like sales rose 2.1 percent in the 16 weeks to January 6, its first fiscal quarter, a slowdown from 8 percent growth in the previous quarter.

Total sales rose 7.9 percent in the period, which ABF said was marked by “a slow start given unusually warm weather and strong Christmas trading.”

AB Foods said it is now more confident that Primark will deliver an improved adjusted operating margin in the 2023/24 financial year, thanks to further improvement in gross product margin.

“This should insulate us well against potential additional supply costs due to the Red Sea disruption, should they occur,” the report said.

Endeavor said an investigation into its former boss, who was fired for “serious misconduct,” would be completed “as soon as possible.”

The gold miner’s board fired Sebastien de Montessus as CEO this month, amid an investigation into a £4.6 million ‘irregular payment instruction’ he issued.

Last week the board stripped the French businessman, who has led the company since 2016, of more than £23 million in salaries and bonuses.

Housebuilders have had a tough 2023 as rising interest rates and a weaker British consumer pressure hit property sales, with Crest Nicholson, Henry Boot and Watkin Jones all reporting weaker profits on Tuesday.

Crest Nicholson posted an adjusted pre-tax profit of £41.4 million for the year to December 31, compared with £137.8 million a year earlier and missed forecasts by £44 million.

Henry Boot said it is on track to deliver pre-tax profits of £37.2 million in 2023, in line with forecasts, up from £45.6 million the year before.

Watkin Jones slumped to a pre-tax loss of £2.9 million, compared with a profit of £48.8 million last year, although this was largely due to a £35 million provision for building safety repairs.

Alex Pease, CEO of Watkin Jones, said: ‘Significant cost inflation and volatility in the property finance markets meant that FY23 represented a period of unprecedented challenge for the business.

‘However, I am pleased that against this backdrop the Group has shown resilience and agility and taken a number of important actions operationally.’