Sainsbury's Christmas trading beats expectations as Argos shines

Sainsbury's beat forecasts for Christmas trading in its core supermarket business and was upbeat on prospects for its newly acquired Argos general merchandise division after that also surpassed expectations.

Sainsbury's, Britain's second biggest supermarket chain, joins fourth-ranked Morrison in reporting better-than-expected Christmas trading and its shares gained as much as 7 per cent on Wednesday.

Industry data has indicated that market leader Teso, which gives an update on Thursday, has also fared well, showing shoppers were prepared to splash out on food over the holiday season.

A strong Christmas will come as a relief to the big four players in the industry following several years of turmoil sparked by the rise of German discounters Aldi and Lidl.

Those two challengers have also reported robust festive numbers as the overall market grew and reaffirmed their commitment to ultra-low prices.

Some analysts said the going could get tougher for Sainsbury's as price pressures rise in Britain.

"We remain of the view that challenges will be on the increase for both sides of the group, given a combination of sourcing pressures and a more challenged consumer," said analysts at Jefferies, who have a "hold" stance on the stock.

Sainsbury's chief executive Mike Coupe said the grocery market remained intensely competitive with the impact of the devaluation of sterling since last June's Brexit vote still uncertain.

Analysts have also expressed concern about a potential squeeze on consumer spending this year as inflation begins to erode real earnings growth.

Reuters

Cineworld reports record ticket sales after series of blockbusters

Cineworld said on Wednesday full-year group revenue rose 8.3 per cent on a constant currency basis as movies such as "Star Wars: Rogue One", "Fantastic Beasts and Where To Find Them", and "The Jungle Book" drew record number of viewers to its screens.

Group box office revenue increased 7 per cent in the year ended 31 December, while admissions rose in its key UK & Ireland market and others, including Poland, Hungary and Israel.

The company, which operates 226 sites with 2,115 screens across nine countries, said it would add 13 new sites in 2017, including six in the UK.

Cineworld's retail revenue, which comes from sales of items such as popcorn and soft drinks, rose 12.7 per cent.

The company, founded in 1995, has grown through a string of acquisitions like the bolt-on purchase of five UK cinema units from Empire Cinema for £94m in July last year, which included a nine-screen multiplex at Empire Leicester Square in London's West End.

The operator said the film slate for 2017 was "exciting" with releases like "Justice League", "Fast and Furious 8", and "Dunkirk".

Separately, the company promoted Deputy chief financial officer Nisan Cohen as chief financial officer with immediate effect.

Reuters

National Express exits UK rail with contract to Trenitalia

National Express agreed to sell a London rail contract to Italy's Trenitalia on Wednesday, marking the departure of what used to be one of the biggest names in British rail and the arrival of another foreign state-owned operator to the network.

Germany's Deutsche Bahn, Abellio from the Netherlands and Keolis, majority-owned by France's SNCF already run franchises.

Marking the entry of Italy's state-run company into Britain, National Express said that Trenitalia would pay it £70m to run the C2C services between London and commuter towns in Essex until the contract ends in 2029.

The sale of the contract, which is subject to approval from the British government and expected in the next month, will mean National Express, once one of the country's biggest rail operators, will no longer run trains in the UK.

The company continues to run buses and coaches in Britain, as well as in Spain, Morocco and the United States, plus rail services in Germany. It said it saw future opportunities abroad.

"For National Express, while not ruling out participating in future UK rail bids, this (deal) allows us to pursue further growth opportunities in the markets where we have seen strong returns in the recent years," CEO Dean Finch said.

In 2009, the Government stripped National Express of its key East Coast service, putting the loss-making London-Edinburgh route in state hands for the next five years.

Reuters

Foxtons falls to lowest since IPO as profits slump

Foxtons, the London-focused estate agent, fell to the lowest since its initial public offering in 2013 after reporting revenue for last year that fell below analyst estimates and warning that trading conditions will remain challenging in 2017.

The company’s shares fell as much as 12.4 per cent after saying adjusted earnings before interest, tax, depreciation and amortization are expected to be about £25m for 2016 compared to £46m a year earlier. Analysts had expected EBITDA of about £28m.

Tax increases and uncertainty over Britain’s vote to leave the European Union have reduced the number of property transactions in the capital, hurting Foxtons’s revenue. At the same time, the company has been opening new branches, and warned in July it may have to slow the pace of that expansion because of market conditions.

“We expect trading conditions to remain challenging in 2017,” chief executive Nic Budden said in a statement Wednesday. “Should current levels of sales activity continue in the short term, it is likely that 2017 volumes will be below those in 2016.”

Foxtons reported revenue from home sales of about £12m in the final quarter of 2016, down from £20m a year earlier. Lettings revenue were largely unchanged at about £13m.

Bloomberg

Ted Baker reports surge in Christmas sales

Fashion retailer Ted Baker on Wednesday reported a surge in sales over Christmas, turning in a strong performance despite difficult market conditions in Britain, boosting its shares by as much as 5 per cent.

The company reported a 17.9 per cent rise in retail sales for 8 weeks to 7 January which includes Christmas. Online sales rose by 35 per cent.

Ted Baker's performance contrasts with some of Britain's other clothing retailers, which have had tough time over Christmas. Next, Britain's most successful retailer of the last decade, last week cut its profit forecast for the current financial year after a poor Christmas and warned of a further decline in 2017-18. Next also highlighted "exceptional" levels of uncertainty in the clothing retail sector.

Ted Baker's dresses, suits and shirts, which often have quirky details such as flowery collars and polka-dotted sleeves, have helped it to stand out from mid-market rivals in Britain.

Broker Liberum said in a client note that unlike more mature retail businesses, Ted Baker’s strategy of leading with stores in key locations and making the brand available online was a low risk, low capex route to growth.

Reuters

Uber signs deal with Dubai regulator after pricing rows

Ride-hailing service Uber signed an agreement with Dubai's transport authorities on Wednesday to become fully regulated after a series of clashes over pricing and availability.

The move signals friendlier relations between the government of the Gulf's most popular business and tourist destination and what is becoming one of the best known global transport brands.

The two will also team up on a project to study how to cut congestion and the cost of transport in the Emirate, which Uber hopes will open up more business opportunities in the future.

Under the deal between Uber and the Roads and Transport Authority (RTA), Uber will be able to use 14,000 vehicles through its app "as per the laws governing the operation of taxis and limousines in Dubai emirate", an RTA statement said.

Uber, which has a valuation of around $70bn (£57bn), has grown rapidly to more than 450 cities since 2009, fighting a series of battles with local regulators.

Reuters

Bouygues Gets £1.5bn Hinkley Nuclear Plant Contract

Bouygues won a construction contract worth at least £1.5bn for the controversial Hinkley Point nuclear plant that will use the same technology as over-budget and delayed projects in France and Finland.

Bouygues will work with UK firm Laing O’Rourke on construction of the buildings in Somerset that will house the two nuclear reactors, the Paris-based company said in a statement Wednesday.

The contract is from French state-controlled utility Electricite de France, which got approval in September to build Hinkley Point, an £18bn nuclear plant on England’s western coast that will be the most expensive ever built. EDF says lessons learned from four similar reactors built in France, the UK, and China will allow it to complete the plant in 2025, with an annual investment return of about 9 per cent after tax over its 60-year lifespan.

The UK contract reflects Bouygues’ experience in nuclear civil engineering, the company said.

The announcement is another sign that the project, more than a decade in the making, is progressing. In September, French nuclear group Areva, which is being bailed out by the French government, signed contracts worth more than €5bn to provide equipment and nuclear fuel for the two reactors to be built at Hinkley Point.

Bloomberg

Singapore jails and fines Swiss bank's ex-manager in 1MDB case

A court in Singapore has found a former manager at a private bank guilty of failing to report more than $1.26bn in suspicious transactions in a case linked to the indebted Malaysian state fund 1 MDB.

The court sentenced Jens Sturzenegger, a Swiss national and former manager at Falcon Private Bank, to 28 weeks in jail and fined him 128,000 Singapore dollars ($89,143) on Wednesday. He pleaded guilty to six charges including not disclosing information and lying to investigators.

In October, regulators ordered Falcon Private Bank to close down in Singapore and pay a fine of 4.3m Singapore dollars ($2.99m).

Authorities in Singapore, Switzerland, Hong Kong and the US are investigating allegations that people close to Malaysian Prime Minister Najib Razak stole over $1bn from 1MDB.