Tuesday, February 18, 2025
Earnings

BUSINESS LIVE: Bitcoin hits $100,000; Vodafone-Three gets green light; Frasers takes Budget hit

The FTSE 100 is down 0.1 per cent in afternoon trading. Among the companies with reports and trading updates today are Vodafone, Frasers, AJ Bell, Warpaint London and Watches of Switzerland. Read the Thursday 5 December Business Live blog below.

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

French market turmoil eases and euro edges up as PM Barnier resigns

The sell-off in French assets eased marginally on Thursday as investors held their breath ahead of Prime Minister Michel Barnier’s resignation.

French government bond yields moved lower as the euro strengthened and the country’s banking stocks inched higher, with all three having come under pressure in the wake of the government’s collapse.

Watches of Switzerland shares top FTSE 350 risers

Top 15 rising FTSE 350 firms 05122024

Frasers Group shares top FTSE 350 fallers

Top 15 falling FTSE 350 firms 05122024

“Can you really measure whether people ‘know’ they’re better off?”

Danni Hewson, head of financial analysis at AJ Bell, comments on today’s markets:

The cost-of-living crisis hit people where it really hurts, dragging living standards down.

“The prime minister today said that households will know when they’re better off and the deliberate shift away from a previous promise to have the highest economic growth in the G7 will certainly make it easier to explain to UK voters.

“It’s also expected to be more deliverable as the government can’t control what happens in other countries.

The chancellor already took a tentative step back from the pledge after the latest OECD forecast, talking about the UK being the fastest growing European economy in the G7.

“The return of Donald Trump to the White House along with uncertainty about how tariffs and US protectionism might impact global growth will certainly have been a consideration.

“But can you really measure whether people ‘know’ they’re better off? The real question will be how many of us should feel better off and by how much.

Falling inflation will help, assuming the increase in National Insurance for employers doesn’t structurally change the economic picture.

Number of petrol cars on the road has PEAKED this year, experts claim

A ‘genuine landmark’ has been achieved this year with 18.7million petrol cars on the road. And experts say it won’t ever go higher.

Auto Trader’s latest motoring forecast is for volumes of cars running on unleaded will steadily decrease from 2025 onwards, tumbling to just 11.1million units by 2034 – a decline of 40 per cent.

A major bank just cut its mortgage rates by up to 0.39%

A major high street bank has announced it will cut mortgage rates by up to 0.39 percentage points.

NatWest has said there will be widespread rate cuts across its two-year and five-year fixed products, with home buyers, households remortgaging and buy-to-let landlords set to benefit.

Sales growth strengthens at Watches of Switzerland amid US demand

(PA) – Watches of Switzerland has revealed strengthening sales amid a boost from strong demand for timepieces in the US.

Shares in the London-listed firm climbed higher in early trading on Thursday as a result.

The retail firm revealed that group revenues grew by 4% to £785million over the 26 weeks to October 27, driven by an acceleration over the second quarter.

Sales were particularly strong in the US, growing by 11% to £355million over the period, as it benefited from its stock rebuild.

UK and Europe revenues were 1% lower at £430million, but the group highlighted growing demand in the UK in recent months.

Brian Duffy, chief executive of the group, said that trading has started “encouragingly” over the current quarter, as it has continued with its showroom investment and opening plan.

Frasers Group blames Budget for lower profit guidance

Frasers shares tumbled on Thursday as the Sports Direct owner lowered its profit guidance and the retail giant prepared for relegation out of the FTSE 100.

The group told shareholders that consumer confidence and trading conditions had been ‘tougher’ before and after the UK Government’s Autumn Budget.

Card Factory to open first US stores after $25m Garven takeover

Greetings card retailer Card Factory will open its first stores in the US market after acquiring Minnesota’s Garven in a $25million (£19.7million) cash deal.

The group told shareholders the acquisition of Garven, which supplies a customer base of general and specialty retailers, provides the opportunity to ‘further explore design and buying synergies…[and] introduce its own ranges into the US wholesale market’.

How to make a fortune from the Christmas Party

Of all the aspects of my job that fill me with dread – and as a senior woman executive in the sexist world of finance, there are quite a few of them – there is one horror like no other.

It comes around without fail every year and what makes the whole farrago so much harder to endure is that some poor fools actually believe it is fun.

EVs made up 25% of new car sales in November but it’s still not enough

Electric vehicles accounted for more than a quarter of all new cars bought in the UK last month but demand is being propped up by ‘unsustainable’ manufacturer discounts, the trade body has warned.

New car sales in the UK declined by 1.9 per cent in November, with 153,610 motors joining the road, latest figures from the Society of Manufacturers and Motor Traders reveal.

When will interest rates fall again? Latest base rate forecasts

Interest rates are likely to be cut four time next year, according to the governor of the Bank of England.

Speaking to the Global Boardroom conference with the Financial Times, Andrew Bailey confirmed the Bank of England’s central forecast of four quarter point interest rate cuts next year.

Housebuilding in decline again as high borrowing costs hit demand

Activity in Britain’s housebuilding sector continued to fall last month, as high borrowing costs and weak consumer confidence weighed on demand.

The closely watched S&P Global/CIPS UK Purchasing Managers’ Index for the construction industry came in at 55.2 last month, up from October’s 54.3.

Shell and Equinor join forces as North Sea oil and gas producer

Shell and Equinor will combine their offshore oil and gas assets in the North Sea for a joint venture with 1,300 employees.

Based in Aberdeen, it will be the North Sea’s largest oil and gas producer and is expected to produce more than 140,000 barrels of oil equivalent per day next year.

Bitcoin at $100k: ‘We’re still reasonably early in this bull market’

Simon Peters, eToro crypto analyst:

‘Even with this milestone reached, we’re still reasonably early in this bull market if past years and cycles are anything to go by. Historically the peak of the bitcoin bull market has formed 12-18 months after the block reward halving.

‘With the most recent halving having occurred in April 2024, this puts a timeline of the end of 2025 or early 2026 for when the peak of the bull market should occur.

‘With that being said, it is not unusual to see 20 to 40% drawdowns in the bitcoin price during bull markets. With the price reaching such a significant milestone as $100,000 and it being holiday season, I wouldn’t be surprised to see a pull back from this level, as investors take some money off the table before the trend continues on.’

Watchdog approves £15bn Vodafone-Three UK deal despite higher bills fears

Britons stash £2trn in bank accounts

Britons have been hoarding cash in bank accounts in 2024, lured by higher interest rates and relative safety in a year characterised by political uncertainty.

But while savers may have enjoyed more generous interest than has been available for much of the last two decades, they have missed out on bumper equity returns and risk tying themselves to falling rates.

Bitcoin tops $100,000 for the first time as Trump fuels crypto mania

Bitcoin has topped $100,000 for the first time as the price of the cryptocurrency continues to soar in the wake of the election of Donald Trump for a second term as US President.

Trump has nominated crypto advocate Paul Atkins to lead the US Securities and Exchange Commission.

The President-elect has said Atkins, the chief executive of Patomak Partners and a former SEC commissioner, was a ‘proven leader for common sense regulations’.

In the years since leaving the SEC, Atkins has made the case to cut back burdensome market regulations.

Another blow to Frasers after FTSE 100 relegation

Richard Hunter, head of markets at Interactive Investor:

‘Hot on the heels of relegation from the FTSE100 being confirmed, Frasers has declared a profit downgrade which has compounded its current woes.

‘Nearer term, the current clouds which are overhanging over the retail sector (which have also resulted in the relegation of peer B&M European Value Retail from the premier index) are weighing on performance.

‘Consumer sentiment is patchy at best, retail sales are under pressure and the general economic backdrop has lessened consumer propensity to spend.

‘Meanwhile, a failed bid for Mulberry and public disagreements with boohoo have been unwelcome distractions, and the group has found itself under increasing pressure as investors seek better value elsewhere in the sector.’

Breaking:Shell and Equinor to ‘create the UK’s largest independent oil and gas company’

Energy giants Shell and Equinor’s UK businesses will combine their offshore oil and gas assets for a joint venture creating ‘the UK North Sea’s biggest independent producer’.

Equinor’s executive vice president for exploration and production international, Philippe Mathieu, said: ‘Equinor has been a reliable energy partner to the UK for over 40 years, providing oil and gas, developing the offshore wind industry, and advancing decarbonisation.

‘This transaction strengthens Equinor’s near-term cash flow, and by combining Equinor’s and Shell’s long-standing expertise and competitive assets, this new entity will play a crucial role in securing the UK’s energy supply.’

FTSE 100 set to open lower

Matt Britzman, senior equity analyst, Hargreaves Lansdown:

‘The FTSE 100 is set to open lower this morning after slipping 0.3% yesterday, breaking a five-day rally as losses in healthcare and mining dragged the index lower. Gains in financials and airlines provided some support, but it wasn’t enough to offset the broader pressure.

‘The rest of Europe is on a similar path this morning, as turmoil in the French government and question marks around German economic weakness look set to weigh on markets in early trading.

‘Vodafone and Three have secured regulatory approval for their merger, combining the UK’s third and fourth-largest mobile operators into a stronger competitor. While the full details are yet to emerge, this is a significant regulatory shift after years of blocked telecom deals.

‘A streamlined three-player market, seen in countries like the Netherlands and Switzerland, could lift profitability and encourage much-needed investment in the UK’s lagging networks. This is a small win for the sector but doesn’t change the tough market dynamics.’

Police investigating reports that Boohoo bosses were stalked

Police are investigating reports of stalking made by executives at fast fashion firm Boohoo.

There have also reportedly been claims of ‘corporate espionage’.

Frasers profits take Budget hit

Frasers has lowered the top end of its annual profit guidance, blaming weaker consumer confidence leading up to and following the Autumn Budget.

The group said it was now forecasting adjusted pre-tax profit for its 2024/25 year of £550million to £600million, versus previous guidance of £575million to £625million.

It made £299.1million on the same basis in its first half, down 1.5 per cent on last year.

Boss Michael Murray said:

‘The first half of this year has been another period of progress for the Group, delivering on our objectives as the Elevation Strategy continues to take the business to the next level.

‘Sports Direct UK delivered further sales growth, and our Property and Financial Services divisions are seeing encouraging progress. We continue to operate with discipline to ensure our business is as resilient as possible – proactively right-sizing recent acquisitions to set them up for profitable long-term growth and driving further automation benefits to exceed our stock reduction targets for the period. 

‘We have also made significant strides in international expansion, developing new partnerships across Australia and Africa, and unlocking opportunities as we move further towards our goal of becoming a leading global sports retailer.’

Gold miner backed by property tycoon Nick Candy snaps up rival in £90m deal

A gold miner backed by property magnate Nick Candy has bought a rival in a £90million deal. Metals Exploration swooped on Condor Gold with a bid of £67.5million up front in cash and shares.

Condor shareholders will also be entitled to £22.6million in the future if it hits gold production and resource targets.

The tie-up came after the Mail revealed Metals Exploration – 38 per cent-owned by Candy – was prepared to go hostile with its bid.

Bitcoin at $100k: Investors eye institutional uptake

Pascal St-Jean, CEO at global digital asset investment manager 3iQ:

‘Despite Bitcoin reaching $100,000 being a significant psychological threshold the most important consideration of this event is that although Bitcoin is a Bellwether for the broader digital asset class, the more significant takeaway is that this will increase the likelihood of more institutions and traditional finance investment in the sector.

‘This price appreciation is driven by the perception of an incoming crypto friendly administration resulting from Donald Trump’s election victory, as well as an increase in accessibility to digital assets for investors via the introduction of new Exchange Trade Products and greater regulatory clarity globally.

‘Crypto is also being more widely accepted by governments around the world who are now more accepting of the benefits it delivers, namely financial inclusion.’

Vodafone-Three gets green light

Britain’s competition watchdog has finally approved the £15billion merger between Vodafone UK and Hutchison’s Three UK.

It clears the way for the creation of the country’s biggest mobile operator and reduces the number of networks to three from four.

The Competition and Markets Authority had previously said the deal could push up prices for customers, but it later accepted that commitments on network investment and shorter term protections for both retail and wholesale customers were enough to resolve its concerns.

The CMA said: ‘We believe the merger is likely to boost competition in the UK mobile sector and should be allowed to proceed – but only if Vodafone and Three agree to implement our proposed measures.’

Bitcoin hits $100,000

Bitcoin has rallied above a landmark $100,000 as investors increasingly bet a Donald Trump White House will cement the cryptocurrency’s place in financial markets.

The total value of the cryptocurrency market has almost doubled over the year so far to hit a record just shy of $3.8trillion, according to data provider CoinGecko. By comparison, Apple alone is worth about $3.7trillion.

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