US stocks fall: Wall Street open

US stocks fell in the opening minutes of trade on Wall Street, as investors took a more cautious approach as they await the next interest rate decision by the Federal Reserve later this week.

The Nasdaq fell 0.9%, while the Dow Jones slipped 0.2% and the S&P 500 was down 0.5% after the opening bell.

Star turn: West End landlords cheer trading performance

Two of the West End’s biggest landlords today said Christmas spending exceeded pre-pandemic levels despite the cost-of-living crisis and rail strikes.

Shaftesbury, which owns a 16.4-acre portfolio across Soho and Chinatown including Carnaby Street, said turnover for its occupiers was up 42% versus December 2021 and 6% higher than December 2019.

Chief executive Brian Bickell said the figures bucked a wider trend: “This strong performance is in stark contrast to the more subdued spending and consumer confidence reported nationally.”

Meanwhile Capco, which owns much of Covent Garden (above), reported a “successful Christmas trading period” with like-for-like sales exceeding pre-pandemic levels, although it did not give further details.

Capco’s chief executive Ian Hawksworth said: “Strong leasing demand for our prime properties in the West End continues to deliver rental growth.”

Festive menu peps up Christmas sales 10% for Caffè Nero

Christmas sales at coffee chain Caffè Nero have bounced back strongly and were 10% up on pre-pandemic levels thanks to a popular festive menu that included speciality coffees and luxury mince pies.

The company hit record weekly sales during the first week of December last year, netting £7.9 million, and served 7.8 million customers during the month. Like-for-like sales were 9.5% higher than Christmas 2021.

Caffè Nero founder and CEO Gerry Ford said the chain’s Christmas menu, which included a Black Forest mocha, salted caramel brownie hot chocolate and amaretto mince pies, had been “very well received” by customers.

In a wider trading update, Caffè Nero also reported that for the first half of this financial year, sales in the UK were £150 million, averaging 104% of pre-pandemic levels and an increase of 17% on 2021.

Cautious trading ahead of rates decisions

A pivotal week for stock markets started cautiously today as investors stayed on the sidelines ahead of interest rate decisions and earnings updates from the likes of Apple and Amazon.

Global markets have enjoyed a strong first month of 2023, although with the inflation battle far from over the latest guidance by central banks will be crucial to further progress.

The US Federal Reserve is first up on Wednesday, when it is due to slow its pace of interest rate hikes to 0.25% and potentially signal a pause in policy tightening.

The Bank of England and European Central Bank are both widely expected to make half point increases the following day, alongside updates on the economic outlook.

A flurry of fourth quarter earnings on both sides of the Atlantic will also be a big factor in determining the ongoing mood. Those reporting in London this week include Shell, while 12% of the S&P 500 by market value is due after Wall Street’s closing bell on Thursday thanks to updates from Apple, Alphabet and Amazon.

With investors reluctant to take new positions ahead of the announcements, the FTSE 100 index slipped 11.04 points to 7754.11 and the UK-focused FTSE 250 index slumped by 0.9% or 177.91 points to 19,857.48.

Top flight fallers included Prudential and Standard Chartered but Sainsbury’s added another 4.3p to 256.8p following the surprise disclosure of stake building by Costcutter owner Bestway.

In the FTSE 250 index, IT services business Computacenter jumped 8% or 160p to 2152p after it said a record and better-than-expected fourth quarter will result in an 18th consecutive year of underlying earnings growth.

Elsewhere, clothing and footwear retailer N Brown was in focus after Friday evening’s disclosure that Sports Direct owner Frasers Group has built a near 18% stake in the JD Williams and SimplyBe business.

Shares in N Brown jumped 12.5% or 4p to 36p. FTSE 100-listed Frasers fell 16.5p to 754.5p.

888 boss steps down with immediate effect

888 CEO Itai Pazner will step down with immediate effect as the gambling operator announced an internal investigation into the standard of its money-laundering checks on Middle Eastern VIPs.

888 – which bought William Hill last year – said it would suspend benefits for high-rollers in the Middle East after it learned “certain best practices have not been followed” when it came to performing anti-money laundering and know-your-customer checks on these gamblers.

Alongside pausing VIP operations, the business said Pazner would leave his post as CEO.
Lord Mendehlson – a former lobbyist turned Labour Party peer – will take over Pazner’s duties in an interim capacity as executive chair. 888 said the suspension could cost the business up to 3% of revenue should it remain in effect.

The gambling operator’s share price plummeted as markets opened this morning, down more than 20% to 80p per share.888 shares are now down by more than 80% since peaking in September 2021, when the business announced it would acquire William Hill’s non-US assets from American casino giant Caesars.

Dairy man is new Unilever boss

EMBATTLED consumer goods giant Unilever today asked board member Hein Schumacher to take over as its new boss and arrest a period of decline.

The Hellmann’s mayo to Ben & Jerry’s ice-cream giant has faced the ire of shareholders for a lacklustre performance. A failed £50 billion for GSK’s consumer arm also didn’t help.

Today it said Schumacher, who also runs Dutch dairy co-op Royal FrieslandCampina, will take over in July.

He will replace Alan Jope who had earlier said he would stand aside. Jope may not have had the support of enough investors in any case.

Over the last five years, the shares are flat at about 4052p.

Critics have included Terry Smith, who said Unilever failed to engage properly with long term shareholders such as himself and mocked its woke-like search for the “purpose” of mayonnaise.

Crucially, Schumacher does have the support if activist investor Nelson Peltz, who is also now on the board and is thought to favour a radical shake-up, and perhaps a break-up, of the business.

He said today: “I strongly support Hein as our new CEO and look forward to working closely with him to drive significant sustainable shareholder value.”

Jope was paid £5 million last year. His successor can expect something similar.

Rates uncertainty hinders FTSE 100 performance

The FTSE 100 index has fallen 17.82 points to 7747.33 at the start of a week that will be dominated by interest rates announcements by the Bank of England, European Central Bank and US Federal Reserve.

Richard Hunter, head of markets at Interactive Investor, said it appeared investors are positioning for a turbulent few days.

He said: “An interest rate hike of 0.5% is expected from the Bank of England, adding further pressure to an economy which is starting to buckle under subdued growth concerns.

“Even so, much of the economic data has been poor but better than feared, with the result that the domestic barometer which is the FTSE 250 has added 5.8% in 2023 after the effective bear market of last year.”

Legal & General was among today’s biggest fallers in the FTSE 100 index after long-serving boss Sir NIgel Wilson announced plans to step down. Shares in the financial services group dropped 5.5p to 255.3p.

Unilever appoints new CEO

Unilever today unveiled Hein Schumacher as successor to chief executive Alan Jope, who announced in September his intention to retire from the Hellman’s and Knorr business.

Schumacher is currently boss of the dairy and nutrition business Royal FrieslandCampina and became a non-executive director of Unilever in October last year.

He will begin as Unilever CEO on 1 July after a one-month handover period.

Strong demand and higher fares boost Ryanair

Ryanair’s scheduled revenues for the third quarter jumped almost 85% to 1.45 billion euros (£1.3 billion), driven by demand over Christmas and the October half-term at higher fares.

Ancillary revenues delivered over €22.50 (£19.70) per passenger as overall revenues lifted 57% to 2.31 billion euros (£2 billion).

Operating costs jumped 36% at 2.15 billion euros (£1.9 billion), reflecting higher fuel costs, pay rises and the impact of increased traffic.

The Dublin-based carrier returned to profit with a surplus of 211 million euros (£184.5 million), which compared with the 200 million euros forecast in upgraded guidance at the start of this month.

It expects the current quarter to be loss-making due to the absence of Easter from March, with full-year underlying profit guidance unchanged at 1.32 billion-1.42 billion euros (£1.16 billion-£1.24 billion).

Record profit for STEM recruiter SThree

STEM recruiter SThree has hurtled towards record profits as tech firms battle to recruit top talent.

Profit before tax climbed 24% to £77 million for the year to end November, while revenue climbed 23% to £1.6 billion.

SThree boss Timo Lehne said: “The exceptional, record-breaking, full year performance reported today demonstrates that our well-established strategy, focused on STEM and flexible talent, has continued to deliver and puts us in a unique position to win now and in the future.”