What to Watch: JD Sports' sales rise, Deliveroo finds buyers, and Babcock soars on self-help plan
A branch of JD Sports on Oxford Street, central London. Photo: PA
Here are the top business, market, and economic stories you should be watching today in the UK, Europe, and abroad:
JD Sports sales rise
JD Sports (JD.L) has reported falling annual profits, but said earnings are set to bounce back over the year ahead.
The group reported pre-tax profits of £324m for the year to January 30, down from £348.5m the previous year. Revenues rose from £6.11bn to £6.17bn.
JD Sports said it expects headline group pre-tax profits for the year to next January to surge to between £475m and £500m.
“Whilst we must recognise the substantial level of temporary store closures to date and ongoing, we remain confident that we are well placed to benefit from the opportunities that prevail,” executive chairman Peter Cowgill said.
Shares rose 2.2%.
Deliveroo finds buyers
Shares in takeaway app Deliveroo (ROO.L) rose on Tuesday, ending a dire run of performance that saw the stock reach new all-time lows two sessions on the bounce.
Deliveroo was up 2.9% in London to 258.26p. The stock had hit an all-time low of 241.70p on Monday, extending losses that began on Friday.
The revival came as rival Just Eat Takeaway (JET.L) announced its fourth consecutive quarter of order growth. The company processed 200m orders in the first three months of 2021, up 79% on last year. Shares rose 2.6%.
UK defence major Babcock (BAB.L) has announced plans to cut 1,000 jobs as it looks to streamline the business and turn around performance.
Shares in the defence company surged 25% on Tuesday as the business announced tough self-help measures aimed at reversing underperformance and putting the business back on a more sustainable footing.
Babcock said it would focus on aerospace and defence in the UK, France, Canada, Australia, and South Africa, hiving off other parts of the business that weren’t central to its new identity. Babcock said it hopes to raise £400m ($ 550m) selling off non-core parts of the business. Divisions on the block include its oil and gas aviation business.
The company also promised to slash layers of management from the business, saving an estimated £40m a year in costs.
Taken together, the changes will reduce Babcock’s headcount by around 1,000 over the next 12 months.
The early stages of UK economic recovery from the second wave of COVID-19 began months ago.
According to new data from the Office for National Statistics (ONS) published on Tuesday, Britain’s economy grew marginally in February despite continued lockdown restrictions.
The ONS estimated UK GDP grew by 0.4% in February. Economists had predicted growth of 0.6%, following a contraction of 2.9% in January.
Although marginal and worse than forecast, the data signals the early stages of a recovery from a slump that began with November’s lockdown. Economists expect the economy to grow again in March thanks to the reopening of schools, followed by rapid expansion from April onwards as more parts of the economy reopen.
European markets opened higher on Tuesday but the FTSE 100 lagged behind.
The CAC 40 (^FCHI) in Paris and the DAX (^GDAXI) in Frankfurt were both up 0.2% shortly after the open. Spain’s IBEX (^IBEX) was up 0.1% and the Italian FTSE MIB (FTSEMIB.MI) was 0.2% higher.
The FTSE 100 (^FTSE) underperformed in London, opening flat. The more domestic-focused FTSE 250 (^FTMC) performed better, rising 0.6% at the open.
Britain showed the early-stages of an economic recovery from the second wave of COVID-19 are already underway. UK GDP expanded by 0.4% in February, official data showed.
US futures were quiet ahead of inflation data later today. S&P 500 futures (ES=F) and Dow Jones futures (YM=F) were flat, while Nasdaq futures (NQ=F) were down 0.1%.
Inflation figures are due at 1.30pm London time and expected to show prices growing at an annual rate of 2.5%. Jim Reid, a macro strategist at Deutsche Bank, said US inflation data will be “the big highlight” in the market today.
Data on trade between the UK and European Union painted a mixed picture for the health of imports and exports, with month-on-month figures between January 2021 and February showing trade was up by 20%.
That’s according to data released by the Office for National Statistics (ONS) on Tuesday morning.
Trade was, however, still lower than it was in previous years, with a drop of 12% in February this year versus last year for EU trade and a drop of 1% over the same period for global trade.
Imports and exports had been hampered by administrative confusion following the end of the Brexit transition period in January this year. Many firms had stockpiled to mitigate tailbacks and delays.