Economy

BUSINESS LIVE: Sainsbury’s eyes £1bn of savings; Barratt to buy Redrow; PZ Cussons hit by naira losses

The FTSE 100 closed down 52.26 points at 7628.75. Among the companies with reports and trading updates today are Sainsbury’s, Barratt Developments, Redrow, PZ Cussons and Grainger. Read the Wednesday 7 February Business Live blog below.

> If you are using our app or a third-party site click here to read Business Live

FTSE 100 closes down 52.26 points at 7628.75

The Footsie closes soon

Just before close, the FTSE 100 was 0.63% lower at 7,632.80.

Meanwhile, the FTSE 250 was 0.22% lower at 19,129.42.

Advertising watchdog bans adverts referring to EVs as ‘zero emissions’

The UK’s advertising watchdog has banned adverts from two different car makers that referred to their electric vehicles as ‘zero emissions’ as it continues to crackdown on claims made about battery-powered models.

The Advertising Standards Authority (ASA) said today it had upheld rulings against BMW and MG Motor UK for ads that appeared on Google last year.

Housebuilders cut back: Number of new homes planned fell 44% last year

The number of new homes planned by housebuilders fell by almost half last year, new figures have shown.

New home registrations fell by 44 per cent in 2023 compared to the year before, according to the National House Building Council which is the UK’s largest provider of new home warranties and insurance.

80929679 0 image a 28 1707244779003 BUSINESS LIVE: Sainsbury's eyes £1bn of savings; Barratt to buy Redrow; PZ Cussons hit by naira losses

Pandora plans ‘large expansion’ of store network

Pandora sold 107million pieces of jewellery last year, up from 103million the previous year, new results show.

Bolstered up an upturn in sales, bosses at the jewellery maker said on Wednesday the group was planning a ‘large expansion’ of its store network.

80960861 0 image a 43 1707306181335 BUSINESS LIVE: Sainsbury's eyes £1bn of savings; Barratt to buy Redrow; PZ Cussons hit by naira losses

Smurfit Kappa profits drop but volumes bounce back

Smurfit Kappa shares jumped on Wednesday despite a drop in revenues and profits for 2023, as volumes rebounded to growth towards the end of the year.

The FTSE 100 group, which is Europe’s largest packaging manufacturer, saw box volumes slide by 3.5 per cent last year amid a broader economic slowdown and destocking in the durable goods sector.

80962595 0 image a 13 1707308912245 BUSINESS LIVE: Sainsbury's eyes £1bn of savings; Barratt to buy Redrow; PZ Cussons hit by naira losses

Coventry BS launches best buy easy-access savings deal

Coventry Building Society is now top of the easy-access savings tables with a rate of 5.15 per cent.

Savers opening an account with Britain’s second biggest building society would garner £515 of interest on a £10,000 deposit over one year.

73184403 0 image a 3 1707305337618 BUSINESS LIVE: Sainsbury's eyes £1bn of savings; Barratt to buy Redrow; PZ Cussons hit by naira losses

One third of sellers on Facebook Marketplace ‘probably fraudulent’

One third of sellers on Facebook Marketplace are ‘probably fraudulent’, MPs heard from banking bosses today.

Those in charge of combating fraud of customers’ accounts shared their fears about the online buying and selling platform to a House of Commons committee.

80962049 0 image a 36 1707308057403 BUSINESS LIVE: Sainsbury's eyes £1bn of savings; Barratt to buy Redrow; PZ Cussons hit by naira losses

Want a quick boost for your savings? Try these top rates few know of

For savers seeking to squeeze every last drop of interest from their nest egg, there’s a new place to look.

Normally, the best rates are on easy-access or fixed-rate accounts. But, for the first time I can remember, lesser-known notice accounts top the charts.

80964819 0 image a 17 1707312747237 BUSINESS LIVE: Sainsbury's eyes £1bn of savings; Barratt to buy Redrow; PZ Cussons hit by naira losses

Energy firms could make millions from gas ‘boiler tax’, analysis suggests

(PA) – The UK’s top four gas boiler manufacturers could make millions through the so-called “boiler tax”, according to an analysis.

Concerns are growing over the industry imposing a levy on new boilers to cover the costs of penalties incurred by failing to meet new required levels of heat pump sales under the Government’s Clean Heat Market Mechanism (CHMM).

From April 2024, boiler manufacturers will be required to match, or substitute, 4% of their boiler sales with heat pumps or face a £3,000 fine for each missed installation, rising to 6% in April 2025.

It comes as part of a Government target to help phase out gas boilers and deliver 600,000 eco-friendly heat pump installations a year by 2028.

Late last year, manufacturers announced plans to increase the prices on their gas boilers in January ahead of the target coming into force.

Worcester Bosch said the price of all its gas boilers will increase by £120 in anticipation of paying penalties, adding that the target was “clearly unachievable within the timescales allowed”.

Vaillant said it is preparing to increase its prices for all boiler sales under 70 kilowatts by £95, Baxi said it will introduce a market mechanism levy of £120 on all its residential gas boilers and Ideal Heating would reportedly increase prices by £110.

House prices rise for fourth month in a row, says Halifax

Average house prices have risen for the fourth month in a row, according to the latest figures from Halifax.

The mortgage lender revealed that average prices rose by 1.3 per cent in January alone.

80955855 0 image a 7 1707296515377 BUSINESS LIVE: Sainsbury's eyes £1bn of savings; Barratt to buy Redrow; PZ Cussons hit by naira losses

Grainger cheers ‘exceptionally high’ rental demand

Residential property group Grainger has enjoyed record levels of trade amid ‘exceptionally high’ rental demand, which it says shows no signs of slowing.

The group told investors on Wednesday it had seen ‘strong rental growth’ in the four months to 31 January, with Grainger lining up thousands of new buy-to-let builds.

80959369 0 image a 26 1707304018217 BUSINESS LIVE: Sainsbury's eyes £1bn of savings; Barratt to buy Redrow; PZ Cussons hit by naira losses

Lockdown generation lacks basic workplace skills, Tory grandee warns

The lockdown generation lacks the basic skills to survive in the workplace, a City grandee has warned – as a post-pandemic staffing crisis grips the hospitality industry.

Baroness Ruby McGregor-Smith said disruption to education caused by Covid lockdowns had robbed youngsters of the chance to learn technical skills and carry out work experience.

80955099 0 image a 2 1707297291691 BUSINESS LIVE: Sainsbury's eyes £1bn of savings; Barratt to buy Redrow; PZ Cussons hit by naira losses

PZ Cussons shares top FTSE 350 fallers

Top 15 falling FTSE 350 firms 07022024

Redrow shares top FTSE 350 risers

Top 15 rising FTSE 350 firms 07022024.

PZ Cussons slashes dividend and profit forecast on FX woes

PZ Cussons shares slumped on Wednesday morning after the group cut its earnings forecast and dividend, as it continues to suffer the devaluation of Nigeria’s naira.

The Imperial Leather owner now expects adjusted operating profits of £55million to £60million in the current financial year, against consensus forecasts for £61.5million to £68.2million.

PZ Cussons shares sunk 16.4 per cent, or 21p, to 107p by 10am, making them the biggest faller on the FTSE 250 Index by some distance.

80953507 0 image a 10 1707292616049 BUSINESS LIVE: Sainsbury's eyes £1bn of savings; Barratt to buy Redrow; PZ Cussons hit by naira losses

Sainsbury’s targets £1bn of cost savings by 2027

80955135 0 image a 6 1707295947816 BUSINESS LIVE: Sainsbury's eyes £1bn of savings; Barratt to buy Redrow; PZ Cussons hit by naira losses

‘No end in sight’ to Germany’s building slump, warn analysts

The moribund German economy suffered a fresh setback amid warnings there is ‘no end in sight’ to the crisis gripping its construction industry.

In a bleak update, S&P Global said the index of activity among German builders tumbled to 36.3 last month, well below the 50 cut-off between growth and decline.

80935391 0 image a 5 1707254942554 BUSINESS LIVE: Sainsbury's eyes £1bn of savings; Barratt to buy Redrow; PZ Cussons hit by naira losses

Housebuilder Barratt to buy rival Redrow for £2.5bn

Britain’s biggest housebuilder has agreed to buy FTSE 250-listed Redrow in an all-share deal valuing the smaller rival at around £2.52billion.

Barratt Developments said the deal will boost volumes of homes built and sold, with the combined group boasting a total land pipeline of 92,345 plots by 31 December.

Redrow shareholders will get 1.44 new Barratt shares for each Redrow share as part of the deal, which has the backing of the board of directors.

80953485 0 image a 9 1707295196095 BUSINESS LIVE: Sainsbury's eyes £1bn of savings; Barratt to buy Redrow; PZ Cussons hit by naira losses

Taxpayers more than £200m out of pocket after satellite firm bail-out

A leading government official has admitted that taxpayers are more than £200million out of pocket after the controversial bail-out and subsequent sale of a UK-based satellite firm.

Charles Donald, chief executive of UK Government Investments (UKGI), confirmed to MPs that the value of the stake it bought in OneWeb for just over £400million in 2020 has fallen to around £160million.

80928817 0 image a 5 1707253826940 BUSINESS LIVE: Sainsbury's eyes £1bn of savings; Barratt to buy Redrow; PZ Cussons hit by naira losses

Investors sue troubled Farfetch: ‘Opaque’ rescue cost them millions

Shareholders and employees plan to sue Farfetch after an ‘opaque’ rescue deal wiped out their stakes.

Hundreds of retail investors and workers are preparing to take legal action after losing millions of pounds when Korea’s Coupang Group bought the luxury fashion platform.

80934935 0 image a 7 1707253552193 BUSINESS LIVE: Sainsbury's eyes £1bn of savings; Barratt to buy Redrow; PZ Cussons hit by naira losses

Barratt boasts strong foundations with Redrow purchase

Mark Crouch, analyst at eToro:

‘Despite a challenging macroeconomic environment for housebuilders, 2023 saw Barratt’s share price jump 30% and this morning the firm stated that demand for their homes remains strong, seeing early signs of improvement in both reservation rates and buyer sentiment in 2024.

‘Sticky UK inflation means that interest rate cuts could be a while away yet, dampening investor optimism and further slowing an already stifled housing market. However this doesn’t seem to be impeding Barratt’s strategy, with the UK homebuilder set to buy rival Redrow in a £2.5bn deal, an encouraging sign for investors.

‘House prices fell 2% on average last year but when you consider prices rose 10% in 2022, the impact of higher rates is likely set to continue. Barratt’s decision to cut their dividend at the end of the year feels like a sensible move.

‘With growing uncertainty looming over the sector, the UK’s largest housebuilder has over £1bn of cash on hand, so shoring up an already strong balance sheet will put the company in a stronger position to weather any further storms, and, with the purchase of Redrow, potentially capitalise from them.’

Barratt buys Redrow amid signs housing market recovery ‘is under way’

Susannah Streeter, head of money and markets, Hargreaves Lansdown:

‘The economic winds have not been kind to the housebuilders and Barratt Developments and Redrow clearly believe they’ll be stronger together, giving the new combined company much bigger clout to capitalise on the structural need for housing in the UK.

‘Redrow’s board of directors intend to unanimously recommend that shareholders vote in favour of the £2.52 billion deal, which would give them 32.8% of the combined group, with Barratt shareholders holding 67.2%.

‘The new group will be renamed as Barratt Redrow, and the move is expected to produce around £90 million in savings in operating costs of the two companies annually by the end of the third year.

‘Redrow’s share price has struggled to regain its pre-pandemic form and with Barratt enjoying a strong balance sheet and hefty cash reserves it clearly decided the time was right to make a move. Clearly market conditions are still going to be tougher while interest rates stay elevated.

‘However, the latest signs are that recovery is underway, with the Halifax house price index pointing to renewed sentiment among buyers, as better mortgage deals have landed.

‘Barratt has also seen early signs in both reservations rates and buyer sentiment, so there are hopes that the industry is now turning a corner, but there is still a risk demand could fizzle out again. However, with a shortage of homes in great swathes of the UK being pushed up politicians’ priority lists, there is considerable long-term opportunity for a beefed up housebuilder.’

Marks & Spencer set to overtake Waitrose: Middle classes flocking back to High St stalwart

Marks & Spencer is poised to overtake Waitrose as it wins over growing numbers of middle class shoppers.

In the latest sign the High Street retailer has got its mojo back, industry group Nielsen yesterday said it is neck and neck with Waitrose, with each holding 3.8 per cent of the market.

It marked a major change of fortunes for the two Middle England favourites. In 2021, Waitrose held a 4.2 per cent share of the market and M&S just 3.2 per cent.

80934219 0 image a 7 1707252475713 BUSINESS LIVE: Sainsbury's eyes £1bn of savings; Barratt to buy Redrow; PZ Cussons hit by naira losses

NatWest told to hire new chief exec as Government prepares to sell part of its 35% stake

Natwest has been urged to provide ‘clarity’ about its next chief executive ahead of a public share sale, which could come as soon as June.

The state-backed lender is led by Paul Thwaite, who was appointed as interim boss for a 12-month term last July after Dame Alison Rose had to quit as a result of a de-banking scandal involving former Ukip leader Nigel Farage.

80934595 0 image a 7 1707253048871 BUSINESS LIVE: Sainsbury's eyes £1bn of savings; Barratt to buy Redrow; PZ Cussons hit by naira losses

PZ Cussons hammered by Nigerian naira losses

PZ Cussons has slashed profit expectations and its interim dividend after swinging to a loss in the first half on the back of currency devaluation in Nigeria.

The maker of Imperial Leather soap and Carex expects adjusted profit before tax of £55million to £60million for the year to 31 May.

PZ Cussons posted a statutory operating loss of £89.7million for the first half, compared to a £39.2million profit during the same period the previous year.

The company announced an interim dividend of 1.5p per share, compared with 2.67p last year.

Chief executive Jonathan Myers said: ‘The most significant challenge we have faced by far has been the devaluation of the Nigerian Naira, which is today around 70% weaker than a year ago, representing the biggest drop in the currency’s history.

‘As we set out in September 2023, macroeconomic developments in Nigeria would be the key determinant of the FY24 results.

‘Whilst we continue to make good progress in managing this volatility, the further devaluation in recent weeks will inevitably impact our FY24 results. As a Board, we have taken the prudent step to reduce the interim dividend in light of the devaluation.’

Barratt to buy rival Redrow

Barratt Developments is set to buy Redrow in an all-share deal that values its smaller British housebuilding rival at just over £2.5billion.

The deal will see each Redrow shareholder receive 1.44 new Barratt shares for each Redrow share, Barratt said in a statement.

Immediately following the completion of the transaction, Redrow shareholders will hold about 32.8 per cent of the combined Group and Barratt shareholders will hold about 67.2 per cent.

Barratt boss David Thomas said: ‘We have great respect for Redrow, its overall strategy, its leadership and employees, and its high-quality homes and communities.

This is an exciting opportunity to bring together two highly complementary companies, creating an exceptional homebuilder in terms of quality, service and sustainability, able to build more of the high-quality homes this country needs.

‘The Combined Group would leverage the respective strengths of both Barratt and Redrow, delivering significant benefits to our people, our supply chains, and – most importantly – our customers.’

Cut stamp duty now! Hunt should tackle the tax wrecking the housing market, says JEFF PRESTRIDGE

80937463 0 image a 11 1707257366582 BUSINESS LIVE: Sainsbury's eyes £1bn of savings; Barratt to buy Redrow; PZ Cussons hit by naira losses

Sainsbury’s eyes £1bn of savings

Sainsbury’s has set a new cost savings target of £1billion over three years so the supermarket group can finance both better prices and higher pay for its workers.

Updating on strategy, the group also committed to a progressive dividend policy from the start of its 2024/25 year and the commencement of a share buyback programme, with £200million of share capital to be bought back in 2024/25.

CEO Simon Roberts said: ‘Our Food First strategy has delivered on its promise over the last three years, making Sainsbury’s a stronger business with a much sharper position on value and a major refocus on our innovation. Customers have recognised the progress we’ve made, as our market share gains have shown.

‘Our Next Level Sainsbury’s strategy is about giving customers more of what they come to Sainsbury’s for – outstanding value, unbeatable quality food and great service. Thanks to our scale, our brand and our people, we are in a unique position to deliver for customers across Sainsburys, Argos and Nectar.’

  • For more: Elrisala website and for social networking, you can follow us on Facebook
  • Source of information and images “dailymail

Related Articles

Back to top button
Open chat
Hello
Can we help you?