Whitbread cheers 4.3 per cent sales growth at Costa Coffee

Whitbread has seen sales at its Costa Coffee chain perk up, but revealed a slowdown at its restaurants arm.

The group said like-for-like sales grew 4.3 per cent across Costa in the 13 weeks to 1 December.

Shares fell 5 per cent as it also revealed a 1.5 per cent fall in like-for-like sales at its restaurants, which include Beefeater and Brewer’s Fayre.

It also revealed the impact of a widespread expansion programme on its Premier Inn hotels, and said the budget hotels sector had missed out on a boost from the recent influx of tourism since the pound’s Brexit plunge.

Rather than staying in budget accommodation, it said, tourists flocking to London to take advantage of the weak pound were choosing upmarket hotels.

While like-for-like hotel revenues rose 1.8 per cent in the quarter, revenue per room fell 1.3 per cent and was 4.2 per cent lower in London.

The group said despite the sales fall, its pub restaurants outperformed a “soft” market outside the M25.

It said the Costa sales hike came after a new advertising push, as well as extra trading days.

On a comparable basis to 26 November, like-for-like Costa sales were 2.9 per cent higher.

Alison Brittain, chief executive of Whitbread, said the group was making “good progress” on its expansion plans.

It aims to open around 3,700 new UK Premier Inn rooms, another 230 to 250 Costa coffee shops worldwide, and to install at least 1,500 new Costa Express machines.

PA

UK pay deals stay low even as inflation starts to bite

British workers are continuing to get subdued pay settlements even as inflation starts to pick up, a report from pay analysts XpertHR said on Thursday.

The median pay award in the three months to the end of 2016 was 1.9 per cent, only narrowly ahead of a 1.6 per cent rise in consumer prices in December.

Many economists expect inflation will hit 3 per cent later this year, eroding the spending power of consumers who have helped Britain’s economy cope, so far, with the referendum decision last year to leave the European Union.

“While inflation is beginning to rise, this has yet to feed into pay award levels,” Sheila Attwood, pay and benefits editor at XpertHR, said. “But there is no doubt that as the year progresses employers will be feeling the pressure from employees to provide a real-terms pay increase.”

For 2016 as a whole, the median pay award was also 1.9 per cent, down slightly from 2 per cent in 2015.

In the private sector the average pay award was 2 per cent, while public sector pay rose 1 per cent in line with government policy on capping wages for civil servants, XpertHR said.

Only one in six workers got a higher increase than they received at their last pay review.

XpertHR said that the highest pay increases tended to be linked to the introduction of the national living wage in April 2016 of £7.20 for workers aged 25 and above.

A drop in sterling since the Brexit vote is expected to add to the upward pressure on prices in 2017.

Reuters

Johnson & Johnson to buy Actelion for $30bn, spin off R&D unit

US healthcare giant Johnson & Johnson will buy Swiss biotech company Actelion in a $30bn (£24bn) all-cash deal that includes spinning off Actelion’s research and development pipeline, the companies said on Thursday.

The acquisition gives J&J access to the Swiss group’s line-up of high-price, high-margin medicines for rare diseases, helping it diversify its drug portfolio as its biggest product, Remicade for arthritis, faces cheaper competition.

The offer to pay $280 (£222) per share, following weeks of exclusive talks, was unanimously approved by the boards of directors of both companies.

The deal represents a 23 per cent premium to Actelion’s closing price on Wednesday of 227.4 Swiss francs and is more than 80 per cent above the 23 November closing price before initial reports emerged that Europe’s biggest biotech company had attracted takeover interest.

Actelion shares jumped as much as 20.3 per cent on Thursday as investors welcomed the deal.

“The structure is very attractive,” said Eleanor Taylor Jolidon, a fund manager at Union Bancaire Privee in Geneva, a top-40 Actelion investor.

The price vindicates the strategy of cardiologist Clozel, who co-founded the company with his paediatrician wife Martine and friends in 1997, and has fended off bids over the years in the belief he could increase Actelion’s value by keeping it independent.

Reuters

Jimmy Choo revenues bolstered by growth in men’s products

Designer shoe brand Jimmy Choo notched up record full-year revenue last year as it trumpeted growth in its menswear division.

The company said revenue in the year to 31 December grew 15 per cent to £364m, up 2 per cent on a constant currency basis.

Jimmy Choo said that while shoe sales make up 75 per cent of its sales, men’s products – such as shoes and accessories – is its fastest growing category, accounting for around 9 per cent of revenue.

It also said that its accessories arm benefited from the development of its Lockett range of bags.

Boss Pierre Denis said: “In our 20th anniversary year, we have continued to grow and to build on the strength of the brand.

“We look forward to 2017 as we continue to deliver on our strategy of growth through the development of our collections, fashion leadership and the controlled expansion of our distribution network.”

Retail revenue rose 17 per cent to £244m in the year and Jimmy Choo flagged that a stronger fourth quarter helped like-for-like sales increase 2 per cent in the second half. Overall, like-for-like sales fell 1 per cent.

The firm said that strong growth in Asia, solid growth in Europe and Japan and improving trends in US retail was offset by the planned reduction in its US wholesale operation.

Following the Brexit vote, Jimmy Choo said in August it stands to benefit from the collapse in sterling.

PA

Fiat Chrysler: Trump proposals 'positive' if all implemented

Fiat Chrysler boss Sergio Marchionne says President Donald Trump’s proposals would be “overall positive” for his company’s bottom line — but it’s hard to say for sure until it’s clear which ones will be implemented.

Marchionne said on Thursday during a conference call that “the sum of all of them is positive”.

But he added that he was “unsure about what part of this package will get rolled out”.

Trump urged auto executives in a meeting on Tuesday to make more cars in the US. His proposals include a 35 per cent import tax that could disrupt current production arrangements but he has also talked about slashing corporate taxes and regulation.

Mr Marchionne said discussions were “proceeding well” with US environmental authorities over accusations the company failed to disclose software that let vehicles emit more pollution than allowed.

The company was “in the midst of some pretty intense discussions” with both the Environmental Protection Agency and the powerful California Air Resources Board, Mr Marchionne said.

He said he hoped discussions over 2017 models could be concluded “relatively quickly” and that that could lead to an agreement over cars from earlier model years that would resolve the issues through a software fix.

AP

Diageo profits boosted by Brexit and Scotch sales

Guinness owner Diageo has cheered rising profits thanks to a triple tonic from the Brexit-hit pound, robust Scotch sales and a strong US performance.

The maker of Captain Morgan rum and Johnnie Walker Scotch saw operating profits jump 28 per cent to £2.1bn in the six months to the end of December.

Net sales beat expectations, rising 4.4 per cent, with the market pencilling in a rise of 3.1 per cent.

The company said sterling’s Brexit-induced slump against the US dollar and the euro helped push net sales higher, with the pound’s weakness set to bolster full-year sales and profits by £1.4bn and £460m respectively.

Chief executive Ivan Menezes said the FTSE 100 firm was on track to hit its financial targets.

“We have delivered a strong set of results with broad-based improvement in both organic volume and top-line growth and this positive momentum demonstrates continued effective execution of our strategy.”

​PA

Shell wins court ruling on Nigerian pollution claims

Royal Dutch Shell has won a victory before London’s High Court in a case brought by Nigerian farmers and fishermen who claimed their lands were polluted by the company’s actions.

Shell had argued the case should be heard in Nigeria, and the court agreed.

UK law firm Leigh Day promised to appeal. The lawsuits were filed by the Ogale and Bille people alleging that decades of oil spills have fouled the water and destroyed the lives of thousands of fishermen and farmers in the Niger River Delta, where a Shell subsidiary has operated since the 1950s.

They brought their fight to Shell’s home base because they say the Nigerian courts are too corrupt.