BUSINESS LIVE: John Lewis narrows losses to £55m

Trainline shares soared on Tuesday after the group revealed a £50million share buyback following better-than-anticipated growth in the first half.

The digital railcard platform’s net ticket sales increased by 23 per cent to £2.65billion for the six months ending August, while turnover rose by nearly a fifth to £197million.

The way we spend our money is changing. While Britons may be spending more using debit cards, there has been a surprise resurgence of cash – but cheques are on life support.

Bank trade body UK Finance said there were 45.7billion payments in total in 2022, of which 39.5billion were made by consumers and the rest by businesses.

Housebuilder MJ Gleeson profits have been hammered by economic volatility and worsening consumer confidence.

In the year to the end of June, the group’s pre-tax profit fell by 43.2 per cent to £31.5million, while revenue slipped 12.1 per cent to £328.3million.

A guarantee is only as good as the people giving it to you.

This consumer advice truism explains in part why the triple lock is in such a muddle.

Victoria Scholar, head of investment at Interactive Investor:

‘The cost-of-living crisis with a softer consumer backdrop means John Lewis shoppers are holding off from spending on expensive big-ticket items like white goods and technology. However, they are still spending on cheaper items like fashion and beauty.

‘In Waitrose, inflation has been responsible for the rise in sales with average prices rising by 9% whereas the volume of goods sold dropped by 5%.

‘Profits have been struggling at John Lewis for a number of years amid high costs relating to its vast store estate and the rise in cheaper e-commerce rivals like Amazon.

‘Waitrose has struggled as customers become increasingly price sensitive amid the elevated inflation, rising interest rate environment, as well as stiff competition from cheaper rivals like Aldi and Lidl.

‘Focus will be on the all-important festive period when John Lewis typically enjoys a seasonal boost. Dame Sharon White has a daunting task at hand to revive John Lewis’ fortunes at a challenging time for retail more broadly, laid bare by the recent collapse of Wilko.’

Footwear brand Birkenstock is following the trend for New York listings as it prepares to go public in a move that could value the firm at over £6billion.

The private equity-owned shoemaker is planning to launch an initial public offering (IPO) in the US next month.

The price is yet to be set but it is expected to give the firm a valuation of £4.8billion to £6.4billion.

The FTSE 100 is trading higher this morning after US inflation data bolstered bets that the Federal Reserve will keep interest rates steady next week, while Melrose and Unite Group have fallen in ex-dividend trading.

The European Central Bank is set to decide later today whether to raise its key interest rate to a record high in what should be its final step in the fight against inflation, or take a break as the economy deteriorates.

Shares of real estate firm Unite Group, product testing company Intertek Group and aerospace supplier Melrose have declined between 0.5 and 1.5 per cent as they traded ex-dividend.

Shares of Hipgnosis Songs Fund have soared 5.9 per cent after the music catalogues investor said it would sell 29 catalogues and a portfolio of non-core songs to Hipgnosis Songs Capital for $465 million as it looks to fund a share buyback programme.

BP’s new boss insisted yesterday that its strategy has not changed – after its green energy revamp was thrown into doubt by the abrupt departure of chief executive Bernard Looney.

The oil giant stunned the City late on Tuesday when it revealed that Looney had quit with immediate effect amid a probe into his past personal relationships.

Richard Hunter, head of markets at Interactive Investor:

‘UK markets mirrored the overnight trading action elsewhere, with the FTSE100 opening marginally higher.

‘With a sideways glance towards an interest rate decision later by the European Central Bank where a further rise is possible, the update will provide another reminder if it were needed that the battle against inflation remains live.

‘Unite Group, Melrose and Intertek were marked lower having gone ex-dividend today, while a tentative risk-on approach to the mining sector was in evidence, bolstered by broker upgrades to both Anglo American and Rio Tinto.

‘With the possibility of price action being driven from elsewhere over the course of the day, there is the potential for UK markets to drift, with the FTSE100 being unable to add much to its gain of 1.2% in the year so far off its own bat.’

The John Lewis Partnership narrowed its first half losses and forecast an improvement in its full year outcome, despite an uncertain economic outlook.

The group also admitted that it will take two years longer than planned to complete its transformation.

The retailer said higher costs due to inflation and a need for greater investment had hit its turnaround schedule.

British chip designer Arm will begin trading on Wall Street today in what is expected to be the biggest US public listing of the year.

The semiconductor firm has secured enough backing from investors to hit the top end of its £37.60 to £40.80 per share price range, which would value Arm at more than £40billion.

Just 10 per cent of shares in the Cambridge-based company are scheduled to start trading in New York today, raising about £4billion for Japanese owner SoftBank, which will retain a 90 per cent stake.

John Lewis Partnership losses narrowed in the first half from £66.6million last year to £54.5million, as the retailer forecast an improvement in its full year outcome despite an uncertain economic outlook.

Nish Kankiwala, chief executive, said:

‘Our transformation to modernise our business is well under way, and I want to thank our Partners for their efforts to give customers great service, quality and value when they shop with us in store or online.

‘There are no brands better placed than Waitrose and John Lewis to provide customers with what they need right now – to help them feel good and eat well.’