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Another big Ocado loss and the pandemic recovery of airline operator IAG are in focus during a packed session for corporate results.
Other blue-chip companies reporting today include consumer healthcare business Haleon and London Stock Exchange.
Traders are also watching cryptocurrency developments after the Bitcoin price topped $62,000.
IAG reports robust demand as profits surge
07:50 , Graeme Evans
British Airways owner IAG today reported a big jump in annual profits and said demand continued to be robust, with particular strength in leisure travel.
The group, which also owns Aer Lingus and Iberia, said it was currently 92% booked for the first quarter and 62% booked for the first half of the year, ahead of its position last year.
IAG plans to grow capacity by about.7% in 2024 as British Airways continues to rebuild to its pre-Covid long-haul capacity and as Iberia targets the growing Latin American market.
Full year operating profit before exceptional items of 3.5 billion euros (£3 billion) was significantly higher than last year’s 1.2 billion and also ahead of 2019’s pre-Covid level.
The operating profit figure for the fourth quarter was 502 million euros (£429.5 million), up from 477 euros the year before.
Chief executive Luis Gallego said: “Our airlines operate in the largest and most attractive markets globally and we will continue to invest in our brands to transform the business, improve the customer experience and support the delivery of sustainable growth and world-class margins.”
Sensodyne and Panadol maker Haleon’s profits approach £2 billion and further brand sales could follow
07:45 , Michael Hunter
Haleon, the consumer goods giant spun out of fellow multinational GSK, reported operating profit of almost £2 billion today.
It also said separation costs were “significantly lower” and debt was falling and that it would continue to consider selling off some famous brands
Operating profit for 2023 rose by over 9% to £1.996 billion, from revenue of £1.3 billion, up over 4%. It said 58% of its businesses increases market share.
Brian McNamara, CEO, said: “Within 18 months of our demerger, we reduced net debt by over £2 billion .
“We will continue to actively manage our portfolio, with the agreement to dispose of ChapStick and Lamisil two examples, simplifying the business and increasing focus on our higher growth brands.”
Ocado posts another £400 million loss, guides single-digit revenue growth in 2024
07:37 , Simon Hunt
Supermarket delivery business Ocado posted another £400 million loss for the year to December 2023 as squeezed consumers shrunk their shopping baskets.
Revenue for the year closed up 9.9% to £2.8 billion, led by a 44% jump in turnover in its technology consulting arm and with retail revenue up 7%.
The firm said it saw a “reduction in items per shopping basket as consumers responded to the impact of high inflation on their cost of living.”
Average basket value increased +2.7%., which was offset by a smaller number of items per basket which declined by 4.5% to 44 items.
“Revenue growth is likely to be impacted by lower growth in [average selling prices] as we invest in value and as food price inflation continues to subside.”
It guided mid-single digit revenue growth for its retail arm in 2024.
FTSE 100 seen higher as Asia markets improve, Bitcoin rally continues
07:12 , Graeme Evans
The FTSE 100 index is set for an improved session after yesterday’s underperformance, when poorly-received results contributed to a 0.8% decline.
According to IG Index, futures markets are pointing to a 0.2% rise at near to 7640 following a steady handover from US and Asia markets.
The S&P 500 index declined 0.2% as traders remained on the sideline ahead of today’s release of the Federal Reserve’s preferred measure of inflation.
The Shanghai Composite recovered from the previous day’s property-led sell-off to stand almost 2% higher, while the Hang Seng index lifted 0.4%.
Meanwhile, Bitcoin’s momentum has continued as the cryptocurrency this morning topped $63,000 for the first time since November 2021. It was $42,000 earlier this month.
Recap: Yesterday’s top stories
06:49 , Simon Hunt
Good morning from the Standard City desk.
Yesterday marked four years to the day since the first British death from the frightening coronavirus illness that was beginning to sweep around the world in early 2020.Fortunately the pandemic itself and the disruption that went with it is fast disappearing in the rear view mirror of history.
But the legacy of that period is still very much with us, not least for the UK business community. Taxpayer-backed Covid loans, knowns as CBILS, were just one part of the support measures developed at speed by then chancellor Rishi Sunak and his Treasury team to save untold thousands of businesses from insolvency as lockdowns starved them of income.
But what was then a lifeline has become a noose for many of those companies still struggling to pay off CBILS as interest payments mount. At the time the loans were handed out, the Bank of England had slashed its interest rates to an emergency level of 0.1%. In any case there was no interest to pay in the first year.
But those days have long gone. Most borrowers are on a substantial margin over the Bank rate, in some cases as much as 3.99%.That means paying an interest rate at well over 9%. For a business taking out the maximum £5 million loan that is an extra £462,000 in interest to find each year at a time when the economy is still stuttering.
Latest government data shows that as of 30 June last year less than a third of the £25.86 billion of CBILs that were drawn during the pandemic have been repaid. Just under two thirds of borrowers were repaying on schedule while around 6% were either in default, arrears or settled under the Government guarantee underwriting 80% of the loans.
But that was eight months ago and rates have gone up and stayed up since then. It is likely to be another three months, at best, before the first downward tweak. Between now and then lurk hikes in business rates and the 10% rise in the living wage.
None of it is good news and for too many firms who took out CBIL loans, long business Covid is still real threat to their survival.
Here’s a summary of our other top stories from yesterday:
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