Reuters: Bezos says Amazon needs to do better for employees in last investor letter as CEO
PS: Missed this earlier, but it’s worth noting.
Amazon.com Inc needs to do better at taking care of its employees, Jeff Bezos said on Thursday in his final letter to shareholders as chief executive officer of the online retail giant
Reuters has the details:
Bezos’ comments came just days after Amazon warehouse workers in Alabama voted against forming a union by a more than 2-to-1 margin - a major win for the retailer that has fiercely resisted unionization for decades.
“While the voting results were lopsided and our direct relationship with employees is strong, it’s clear to me that we need a better vision for how we create value for employees,” Bezos, the world’s richest man, wrote in the letter.
“I think we need to do a better job for our employees.”
Amazon, the second-largest private employer in America, has been criticized by some of its 800,000 employees for having harsh working conditions.
Bezos pushed back against that criticism in his letter, saying that reports that the company’s workers were treated “as robots” were inaccurate.
Bezos, who is stepping down later this year as CEO of the company he founded in 1994, said he planned to work on how to make Amazon’s workhouses safer in his new role as executive chairman.
Stuart Appelbaum, president of the Retail, Wholesale and Department Store Union, said in a statement.
“His (Bezos’) admission won’t change anything, workers need a union – not just another Amazon public relations effort in damage control,”
Closing Summary: Optimism drives markets higher, and higher
Time to wrap up
Global stock markets have hit new peaks amid fresh signs that economic recovery from the pandemic is gathering pace.
In New York, the Dow Jones industrial average has risen over the 34,000 point mark for the first time, as the index continues to hit new highs thanks to vaccine optimism and stimulus efforts from the US government and the Federal Reserve.
European markets also close at a new peak, while the FTSE 100 index ended the day at its highest level in over a year, just below the 7,000-point mark.
The FTSE 250 index of medium-sized companies did hit a record peak, though, with housebuilders, transport firms and retailers having a strong day.
The Office for National Statistics reported a rush to book restaurant reservations as England’s lockdowns eased on Monday, with more cars on the streets and a jump in job vacancies too.
The number of financial jobs available in the City of London has also jumped sharply, up 70% in the last quarter.
The rally was also fuelled by strong economic data from the US. Retail sales surged by 9.8% in March, with Americans splashing out on big-ticket items like electronics, as well as in bars, restaurants and clothes stores.
The US labor market also improved last week, with the number of Americans seeking jobless support falling sharply to the lowest since the pandemic.
Strong results from Bank of America, whose profits doubled in the last quarter, also cheered Wall Street.
Danni Hewson, AJ Bell financial analyst, says the latest GDP data from China, due overnight, might push markets even higher:
“Records have been breaking all over US and UK financial markets today. Buoyed by higher than expected retail sales last month and lower than expected jobless claims over the last week, the Dow Jones topped 34,000 points for the first time. Stocks soared as markets took in quarterly results from Bank of America and Fund manager BlackRock, both estimate busting and adding to expectation that this will be a bumper crop of earnings.
“In the UK, recovery optimism propelled the FTSE 250 to another record high; housebuilders Countryside Properties, Trainline and Royal Mail were among companies providing the biggest boost. For a while the FTSE 100 looked like it would finally squeak over 7,000 for the first time since last February, but it didn’t quite get there. However, this market mojo might have legs and positive economic data expected from China tomorrow could finally seal the deal. A post-pandemic milestone that will do much to cement confidence if only in the minds of investors.
In other news:
Several web-focused UK companies have reported strong trading during the pandemic, including beauty and nutrition firm The Hut Group, drinks business Naked Wines, bookmakers Entain and electricals business AO World.
Deliveroo reported that orders doubled in the current lockdown, but also conceded that there is a lot of work to do, following its share tumble since IPOing last month.
Royal Dutch Shell has urged investors to vote for its strategy to shift the business towards cleaner energy sources, despite warnings that the plan does not go far enough to meet the Paris climate agreement goals.
Almost two-fifths of UK workers are given only short notice of their working hours, research has revealed.
Lower-paid staff suffering the most during the pandemic, in a sign that precarious employment practices are widespread across the economy.
The metals empire owned by Sanjeev Gupta has said it followed the law when it made a series of applications for emergency coronavirus loans backed by the government, following reports that the GFG Alliance was restructured to become eligible for more support.
We’ll be back tomorrow. Goodnight! GW
Larry Elliott: Pimms may bubble post-lockdown, but the future for many is less cheery
Whisper it softly, but things are starting to look up for the UK economy, our economics editor Larry Elliott writes:
Evidence is starting to accumulate that the easing of lockdown restrictions is allowing activity to return to something like normal.
Naturally enough, there are plenty of caveats. A new and more virulent strain of the virus could sweep across the country leading to the shutters going down again on businesses that have only just opened.
The Bank of England’s latest data on corporate default rates is also a bit sobering. While big companies are holding up well, the number of small firms defaulting rose in the first three months of 2021 and is expected to rise again in the second quarter. More medium-sized companies expect to face difficulties as well.
On the other hand, the real time news from the Office for National Statistics is modestly encouraging. Restaurant bookings are up, and online job adverts are at their highest since before the country first went into lockdown. There was a marked increase in opportunities in catering and hospitality, a particularly hard-hit sector.
On 12 April, the day non-essential retail stores were allowed to reopen, the volume of motor vehicle traffic on the roads was 91% of its pre-pandemic level: a rise of seven percentage points in a fortnight. Traffic camera activity in London is around the levels it was in early 2020.
Meanwhile, the online supermarket Ocado has reported a surge in interest for Pimms, Aperol, burgers and nibbles as households seek to enjoy their new freedom to mix whatever the weather.....
FTSE 100 hits one-year high, on brink of 7,000 points
Britain’s blue-chip FTSE 100 has closed on the brink of the 7,000 point mark, at its highest level in over a year.
The FTSE 100 has ended the day 44 points higher at 6983.5 points, up 0.6% today.
That’s its highest close since late February last year, just as the first wave of Covid-19 cases hit Europe.
Packaging company Smurfit Kappa ended as the top riser (up 4.7%), followed by GlaxoSmithKline (+4.6%) following the news that activist hedge fund Elliott Management has build up a stake in GSK.
Mining company Antofagasta (+3.4%), packaging firm Mondi (+3.7%), DIY chain Kingfisher (+3.5%) and discount retailer B&M (+3.3%) also led the risers.
The mid-cap FTSE 250 index held its earlier gains, to finish 0.5% higher at a new all-time high.
European markets also closed at new record highs. The Stoxx 600 jumped 0.5% to a new peak, following the gains on Wall Street, as hopes for an economic recovery thanks to Covid-19 vaccines drive equities.
Michael Hewson of CMC Markets sums up the day:
It’s been another day of record highs for European markets with the EuroStoxx600 posting another record peak, along with the FTSE250, which has undergone a decent surge in momentum since the end of last month.
Since the index closed in March at 21,518 the UK mid-cap has risen just under 5%. The FTSE 100 has also had another decent session, hitting its highest level since February 2020, as it looks to close in on the 7,000 level.
While other major indices have led the way in posting record highs on a fairly regular basis, there are increasing signs that UK stocks are finally finding favour with investors as the UK economy embarks upon the next stage of its economic reopening.
We’ve already seen the FTSE 250 make record highs, which leaves the FTSE 100 as the serial laggard with a lot of ground to make up, given it is still well below last year’s peaks of 7,689.
GlaxoSmithKline shares are leading the blue-chip index higher on reports that Elliott Management have built up a multibillion-pound stake in the business.
This activist shareholder has a track record of shaking things up and Glaxo shares have seriously underperformed the wider market for several years. Earlier this year they hit their lowest levels in a decade, with the company being increasingly left behind by its peers AstraZeneca and Pfizer. The company is in the midst of a restructuring program with the consumer business set to be split away from the wider pharmaceuticals business, and some shareholders may be starting to get restless.
Other decent performers have been the likes of Kingfisher, which was on the receiving end of a price target upgrade from Citigroup, while we also saw a decent trading update from Travis Perkins.
Back on Wall Street, the Dow has traded over 34,000 points for the first time, as the rally continues:
The metals empire owned by Sanjeev Gupta has said it followed the law when it made a series of applications for emergency coronavirus loans backed by the government.
Various GFG Alliance companies applied to the coronavirus large business interruption loan scheme (CLBILS), a government programme that guarantees lending to companies struggling because of the pandemic.
Only one company was granted funding worth £45.6m under the scheme, GFG said.
It was responding to an report in the Financial Times that Gupta had restructured his businesses to become eligible for more loans.
Trade between Britain and the Republic of Ireland has slumped in the first two months of this year, new data shows.
Ireland’s Central Statistics Office has reported that the value of goods imported from Britain fell by 57% in January and February combined, a drop of nearly €1.6bn.
Exports to Great Britain from the Republic were also lower, down 12% in the first two months of 2021.
The Irish Times says it shows how Brexit and the pandemic have damaged the Republic’s trading relationship with Britain.
Here’s the details from the CSO:
- Imports from Great Britain decrease by over €700 million in February over February 2020
- Imports from Great Britain decreased by €742 million (-53%) to €650 million compared with February 2020. The largest decreases were in the imports of Food and live animals, Mineral fuels, and Machinery and transport equipment. Imports from Great Britain were 10% of the value of total imports in February 2021.
- The value of goods imports from Great Britain for January and February 2021 was €1,206 million, a decrease of €1,589 million (-57%) compared with January and February 2020.
- Exports to Great Britain decreased by €107 million (-11%) to €859 million in February 2021 compared with February 2020. The largest fall was in the exports of Food and live animals. Exports to Great Britain accounted for 7% of total exports.
- The value of goods exports to Great Britain in the first two months of 2021 was €1,812 million, a decrease of €249 million (-12%) on the first two months of 2020.
Update: earlier this week, the UK’s statistics body reported that UK exports to the EU remained about 11% below levels a year earlier, reflecting the continuing impact of border friction since leaving and disruption caused by Covid.
Wall Street hits record highs
In New York, stocks have hit fresh record highs in early trading.
The Dow Jones industrial average has jumped 237 points, or 0.7%, to 33,968 points for the first time.
The broader S&P 500 index is up 30 points, or 0.75%, to 4,155.18 points, also a new peak.
Bank of America has lifted the mood too, by reporting that net income more than doubled in the first quarter of this year thanks to strong investment banking and trading results.
BofA is also releasing some loan-loss reserves as fewer consumers are expected to default on debts as previously feared, and announcing a $25bn share buyback programe.
CEO Brian Moynihan said:
“While low interest rates continued to challenge revenue, credit costs improved and we believe that progress in the health crisis and the economy point to an accelerating recovery.
US industrial production rose by less than expected last month, though.
Industrial output increased by 1.4% in March, below the 2.8% growth which economists expected after a contraction in February.
Manufacturing output jumped by 2.7% month-on-month (missing forecast of a 4% rise).
That may show that supply contraints are hurting. Lumber prices, for example, have hit record highs as mills have struggled to keep pace with demand.
It’s important to remember that millions of Americans are still out of work following the pandemic, even though the number of new jobless claims has dropped sharply.
Almost 17m are receiving unemployment support from the various support programs:
US retail sales and jobless claims: what the experts say
“This week’s new jobless claims came in much lower than expected. This data has been volatile recently and it’s good to see an impressive mark. Similarly retail sales blew estimates away and the Philadelphia Fed business outlook number was way ahead of expectations.
We know the US is on an upward path and this set of data provides real evidence of that. Investors and the Fed alike will take notice of this and look for more of the same.”
Mohamed El-Erian of Allianz confirms the data is stronger than expected:
Michael Pearce of Capital Economics says retail spending was driven by easing virus fears as well as the latest stimulus payments.
The near-10% surge in retail sales in March reflects not only the boost from $1,400 stimulus cheques but also the effects of loosening restrictions, with spending in bars and restaurants now back within 5% of its pre-pandemic level. Assuming spending on other services did not rebound as rapidly last month, that’s consistent with real consumption growth of close to 3% in March, and 10% annualised in the first quarter overall.
Pearce also points out that there was a rise in spending on ‘big ticket items’, and in clothes shops, bars and restaurants:
Motor vehicle sales up by 15.1%, electronics stores sales increasing by 10.5%, though furniture sales were up by “just” 5.9%. But what caught our eye was the 13.4% surge in spending on food and drink services, while clothing store sales were up by 18.1%.
US weekly jobless claims hit pandemic low
In another boost, the number of Americans filing new unemployment claims has hit its lowest level since the pandemic began.
The weekly jobless claims total (seasonally adjusted) has plunged to 576,000 last week, a decrease of 193,000 from the previous week’s revised level.
This is the lowest number of people seeking jobless support since March 14, 2020 when it was 256,000 - just as the first wave of Covid-19 hit the US.
On an unadjusted basis, initial claims dropped to 612,919, down by 152,833, confirming that companies slowed their layoffs as the US economy strengthened, and as Covid-19 vaccinations lifted optimism.
Another 152,000 self-employed and gig economy workers sought help from the Pandemic Unemployment Assistance.
Here’s some early reaction:
US retail sales surge 9.8%
Just in: US retail spending soared almost 10% last month, in another sign that the American economy is recovering strongly from the pandemic.
Retail sales surged by 9.8% in March compared with February, and much stronger than the 6% rise which was expected.
It’s the biggest monthly jump in 10 months, since the easing of the first lockdown back in May 2020.
On an annual basis, retail sales were 26.9% higher (reflecting the impact of the pandemic a year ago).
That follows the latest stimulus checks sent out to American families, and the reopening of the US economy in recent weeks as the vaccination programme has sped along.
Sales at motor vehicle and parts dealers surged 71% year-on-year, while sales at restaurants and bars were up 36% compared with March 2020, the Commerce Department adds.
Elliott’s Management’s interest in GlaxoSmithKline comes after the UK drugs firm took a backseat role in the race for a Covid-19 vaccine, points out Reuters:
Britain’s GSK warned in February of a bigger than expected fall in 2021 earnings as the COVID-19 pandemic continues to disrupt other healthcare treatments and it invests in new medicines ahead of a split from its consumer products business next year.
Rather than developing its own COVID-19 shot, GSK has so far focused on supplying its vaccine booster to other drugmakers. But a project with Sanofi has been delayed, and China’s Clover has ended its deal with the British drugmaker.
Last summer, GSK explained that it was focused on helping to produce the best Covid-19 vaccine, not the first, by using its “adjuvant technology” to boost the efficiency of protein-based vaccines (this fact sheet has more information).
Here’s Chris Bailey of Financial Orbit on the jump in GSK’s shares:
GSK shares jump on reports of hedge fund Elliott stake-building
Shares in UK pharmaceuticals firm GlaxoSmithKline have jumped over 7%, to the top of the FTSE 100 risers.
It follows a Financial Times report that activist hedge fund Elliott has built a “multibillion-pound stake” in GSK, amid concern among some leading shareholders about the company’s performance.
Activist hedge fund Elliott Management has built a multibillion-pound stake in UK drugmaker GSK, setting up a potential battle over the company’s future after it underperformed peers and lagged in the race to develop a Covid-19 vaccine.
The stake taken by Elliott, the $42bn fund known for its campaigns at BHP, SoftBank and Whitbread, was confirmed by people with knowledge of the investment and is a “significant” position, according to one of them.
Elliott’s investment comes as GSK shareholders have become increasingly disillusioned with the leadership of chief executive Dame Emma Walmsley, who is breaking up the company from next year by separating the consumer health business from its pharma and vaccine division.
The FT flags that “one person familiar with the mood of some GSK shareholders” suggests investors would rather Walmsley ran the consumer health business, given her background in that field, rather than her stated intention of running the demerged pharma business.
Other shareholders are backing the CEO, though, they add. More here.
Europe stock markets have hit a fresh record high today, with the pan-European Stoxx 600 up 0.4% at 438 points.
Sophie Griffiths, Market Analyst for UK & EMEA at OANDA, says strong earnings results from the US are lifting stocks (yesterday, Goldman Sachs and JP Morgan unveiled soaring profits for the start of 2021).
European stocks are charging higher after the US earning season kicked off on the right foot. US banks are often considered a proxy for the broader economy. As a result, their earnings are strong drivers of sentiment.
The upbeat numbers served to reinforce expectations of a strong US economic recovery. If the world’s largest economy is performing well, this is good news for the global economy and risk sentiment.
The European economic calendar is quiet this morning, with in-line inflation data from Germany providing little impetus.
Positive earnings in Europe have given markets a boost, overshadowing concerns over the Covid vaccine rollout on the continent.
The FTSE is outperforming its European peers, boosted by heavyweight miners, which are tracing metal prices higher. A weaker US dollar combined with rising expectations of strong Chinese economic expansion in the first quarter are keeping metal prices elevated. Chinese GDP data is due on Friday with 18.9% year on year growth pencilled in.
The UK’s blue-chip FTSE 100 index has hit its highest level in over a year.
The FTSE 100 is up 35 points or 0.5% at 6975, eyeing the 7,000 points mark for the first time since February 2020.
DIY chain Kingfisher (+3.7%) and discoutn retailer B&M (+2.9%) are leading the FTSE 100 risers, followed by speciality chemicals firm Johnson Matthey (+2.4%) and software firm Aveva (+2.3%).
Unlike the FTSE 250, though, the ‘Footsie’ is still below its pre-crisis levels. Major constituents such as oil companies and banks have been hit hard by Covid-19.
Hospitality firms are hiring staff as they prepare for an end to the lockdown, says Jo Ferreday, managing director of the UK-wide hospitality and events company, Sheer Edge:
“We have seen a marked shift in the number of companies seeking to book and organise events in recent weeks.
“The economy is starting to open up and many hospitality businesses are beginning to hire staff so that they can hit the ground running when things hopefully return to normal in the not too distant future.
“Major events don’t come together overnight and can take weeks if not months to organise, which has almost certainly been a factor in the number of online job adverts returning to pre-pandemic levels.
“Hospitality and catering could provide a massive boost to the economy in the second half of 2021.”
This chart from the ONS shows how UK online job adverts have risen to their highest level since the start of the pandemic:
The largest weekly increases were in “legal” and “catering and hospitality”, which rose by 12 percentage points and 10 percentage points to 81% and 58% of their February 2020 average levels, respectively.
This is the highest proportion of online job adverts for catering and hospitality since 20 March 2020, following “its notable uptick in recent weeks”, the ONS explains.
But, the largest decrease since 1 April 2021 was in “travel and tourism”, which fell 16 percentage points to 84% of its February 2020 average level on 9 April 2021.
This “substantial dip” follows a gradual increase over the last few months, says the ONS.
FTSE 250 index hits record high
Optimism over the economic recovery from the pandemic has driven Britain’s index of medium-sized companies to a new record high.
The FTSE 250 index extended its recent gains this morning, as investors continue to anticipate a post-lockdown rebound.
The index, which has a greater domestic focus than the blue-chip FTSE 100, traded as high as 22,458 points for the first time (up around 0.5% or 103 points).
The FTSE 250 is up almost 10% so far this year, having recovered from its crash over a year ago, when the first wave of Covid-19 hit Europe.
The UK’s largest builders merchant, Travis Perkins (+2.2%), lifted confidence by reporting a 17% jump in like-for-like sales growth in the last quarter.
Travis Perkins says it saw “a marked step up in activity” in March, with pent-up demand and continued high levels of housing transactions fuelling higher spending on repairs, maintenance and improvement (RMI).
Nick Roberts, chief executive, explained:
“The Group has enjoyed an encouraging start to the year with robust like-for-like sales growth across our businesses, underpinned by strong demand in the RMI market.
The Merchanting business has maintained the momentum seen in the second half of last year while Toolstation continues to outperform, driven by its convenient and trade focused proposition.
Other risers include retailer Dixons Carphone (+2.8%) and housebuilder Crest Nicholson (+2.5%). Budget airline easyJet are up 0.8%, with consumer publisher Future jumping 2.8% and transport group National Express gaining 1.6%.
Russ Mould, investment director at AJ Bell, says UK stocks are continuing to shine.
The mid cap FTSE 250 index continues to set new record highs... thanks to a mixture of builders’ merchants, housebuilders and airlines.
Investors are buying these sectors to play the reopening trade and a general recovery in interest for UK stocks after a long period of being in the doldrums.
London finance job vacancies jump 70%
Job openings in London’s finance industry have jumped 70% so far this year, in a sign that the City is more optimistic about the economic recovery from the pandemic.
Data from recruitment firm Morgan McKinley shows that London’s financial services industry returned to hiring growth in the first quarter of 2021.
The survey also found that people changing jobs in Q1 boosted their salaries by 18% on average, the highest in more than a year.
Here’s the details:
- 70% quarter-on-quarter increase in jobs available
- 50% increase in March 2021 in jobs available compared to March 2020
- 4.8% quarter-on-quarter increase in job seekers
- 18% increase quarter-on-quarter salary change
Hakan Enver, managing director of Morgan McKinley UK, says the financial services firms such as banks had a strong start to 2021.
As the vaccine rollout continues apace and the road out of lockdown clears, we are seeing the sector recover at a faster rate than anticipated. We expect this recovery and confidence to continue as the country unlocks and normal working life resumes.
“The 70% increase in job creation this quarter is encouraging and suggests that the crisis has turned a corner, with confidence growing, which in turn is fuelling hiring activity and momentum.
Banks are back in expansion mode with a strong uplift in appetite for hiring experienced professionals.
Restaurants reservations surged as English lockdown eases
UK restaurant reservations surged back on Monday as England eased its lockdown restrictions.
The Office for National Statistics’s latest weekly healthcheck on the economy shows that reservations for a meal out on Monday 12th April jumped to 79% of the equivalent Monday in 2019.
This is the first time the level has exceeded 2% of 2019’s level since the latest lockdown was announced in January.
It confirms that many people grasped the opportunity to see friends and family over a meal again, even though hospitality venues were only allowed to serve people outdoors, restricting the number of bookings possible.
The ONS is using figures from OpenTable, and says:
On Monday 12 April 2021, estimates for UK seated diner reservations were at 79% of the level seen on the equivalent Monday of 2019, the first time their level has exceeded 2% since before the announcement of the latest lockdown in England on 4 January 2021.
This coincides with the easing of lockdown restrictions in England on this day, allowing restaurants to open for outdoor dining. The equivalent figures for London and Manchester were 47% and 153%, respectively.
Separate data yesterday showed that pubs and restaurants in England that opened on Monday sold twice as many drinks as they did before the coronavirus pandemic struck.
The ONS also reports that online job vacancies hit their highest level in over a year, as hospitality firms prepared for the reopening:
- Total UK online job adverts on 9 April 2021 equalled their February 2020 average level to become the highest level seen since 6 March 2020; this was partly driven by a notable increase to the “catering and hospitality” category, which also reached its highest level since March 2020 (according to Adzuna).
There were also more cars on the streets this Monday -- the day in which hairdressers, theme parks, zoos, and self-catering sites also opened their doors again.
- The volume of motor vehicle traffic on 12 April 2021 was at 91% of the level seen in the first week of February 2020; this is 7 percentage points higher than the level seen on 29 March 2021 and the highest level seen since November 2020 (Department for Transport (DfT)).
Full story: Deliveroo doubles orders during latest Covid lockdown
Deliveroo doubled order numbers during the first three months of the year as coronavirus lockdowns helped it in its debut results following a stock market float beset by concerns over its treatment of workers.
The takeaway delivery company received 71m orders during the quarter, a 114% year-on-year increase, according to results published on Thursday.
Deliveroo’s platform handled transactions worth £1.65bn during the period, a year-on-year increase of 130%.
Deliveroo’s strong growth came with customers in some of its main markets locked down for most of the period. However, Deliveroo acknowledged that growth was likely to decelerate after the reopening on Monday of restaurants and bars that can serve customers outdoors, meaning spending is likely to shift away from the stay-at-home economy...
AO World upbeat after adding 2m new customers during pandemic
Online electricals retailer AO World is upbeat about its prospects this year, after a surge in customers since the pandemic began pushed sales and earnings up.
Group revenues increased by 62% to £1.66bn in the last financial year (to 31 March), with ‘momentum continuing in the fourth quarter’.
Its UK website, AO.com, saw year-on-year revenues surge 88% in the last quarter.
AO, which sells household appliances and electrical goods online, says it added over 2 million new customers since the pandemic began, having spent heavily on new warehouse space, vans and employees to handle a surge in demand from locked-down customers.
As a result, adjusted profits are expected to surge to between £63m and £72m, up from £19.6m in the previous year (to March 2020).
And despite the reopening of non-essential shops in England this week, CEO and founder John Roberts is confident about growing the business this year.
The trick, he says, is ‘treating every customer like our own gran’.
“I am delighted to report a year of outstanding financial, operational and strategic progress. The last 12 months have been like no other and we have been very proud to rise to the challenges for our customers - keeping their lives powering on with essential electrical and technology products. Serving customers in The AO Way and treating every customer like our own gran, irrespective of cost, has enabled us to impress millions of customers with a better way to shop electricals.
“We were brave and bold in our capacity and infrastructure investments early in the year and now look forward to building on that scale advantage.
“I believe that these market dynamics will stick and, whilst there is inevitable uncertainty, the direction of travel is firmly with AO and the business model we have spent more than 20 years building. I expect that we will continue to be a double-digit growth business in the year ahead, even now as we lap the tough comparatives from last year with physical stores open.
Wizz Air sees 'gradual recovery' in airline traffic
European budget airline Wizz Air has cautioned that demand for flights may only recover gradually this summer.
Wizz Air said it expects to make a net less of up to €590m for the last financial year (to the end of March), after lockdown restrictions forced many jets to be grounded.
Wizz is hopeful that there will be ‘good progress’ in national vaccination programmes in its key markets, which include the UK, Hungary, Poland and Italy.
But due to current uncertainties around travel restrictions, the airline isn’t providing guidance for the current financial year.
It told shareholders:
The start of F22 (the year ending 31st March 2022) continues to be marked by travel restrictions across our region and we expect only a gradual traffic recovery into late summer 2021, following what is expected to be a period of good progress of national vaccination plans across key markets.
In the short term, the Company continues to actively adjust capacity to travel conditions with a focus on cash contribution positive flying, and as a result we continue to review aircraft allocation on a market-by-market basis as opportunities arise.
Yesterday, fellow budget airline EasyJet said it is ready to “ramp up” its operations during the summer holiday season as it prepares to offer more flights to passengers from late May, once Covid travel restrictions are eased.
Deliveroo CEO: A lot of work ahead
The chief executive of Deliveroo has said the company had a lot of work to do to prove itself to the market after its shares fell sharply when it listed last month.
Reuters has the details:
“We have a lot of work ahead of us to both grow the business over the long term, and to prove ourselves to the markets,” Will Shu said in an interview after the company’s first trading update on Thursday. “It is day one of doing that.”
Asked about the debate about the self-employed status of the firm’s riders, Shu said: “I’m not wedded to any particular model however I am wedded to the model that riders want.”
Hundreds of Deliveroo drivers protested last week, calling for better pay, employment rights and safety measures, as full trading of the company’s shares began in London.
The Independent Workers’ Union of Great Britain (IWGB) is calling for riders to be recognised as workers – making them entitled to the legal minimum wage, holiday pay and sick pay.
Shares in Deliveroo are down 1.5% this morning at 266p, around 30% below their flotation price of 390p.
The Hut Group have dropped by 2.5%, while Naked Wines are down 2.2% in early trading.
Entain’s shares are up 1.9%, at a new record high.
Entain, the owner of Ladbrokes bookmakers, has also seen strong online sales amid the pandemic.
Online net gaming revenue grew 33% in the first quarter of 2021, the company reports, which is the 21st consecutive quarter of double digit growth.
But overall gaming revenues were down 13%, as bookies shops only reopened this week as lockdown rules were eased.
Jette Nygaard-Andersen, Entain’s CEO, said:
With some easing of Covid restrictions, we are delighted to be welcoming customers back into our shops. While it has only been a handful of days since the re-opening in parts of the UK on the 12 April, we look forward to returning to more normal trading across our whole business.
In line with our expectations, the momentum from the end of 2020 has carried into 2021. Although Covid creates some near-term uncertainty, by maintaining our focus on the customer, providing them with great products and services, we remain confident and excited in our long-term prospects.”
We reported earlier this week that Entain had claimed millions of pounds through the government’s furlough support, to pay 14,000 staff who were furloughed at about 3,000 of its high street shops.
Introduction: Deliveroo, Hut Group and Naked Wine sales all jump
Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.
A flurry of corporate winners from the coronavirus pandemic are reporting results this morning.
In its first results since floating inauspiciously on the London stock market, Deliveroo has reported that its orders more than doubled in the last quarter, compared to a year earlier.
Orders rose 114% to 71 million in the January-March quarter, amid ongoing demand for home food deliveries.
But, the company also cautions that it expects growth will decelerate as lockdowns ease -- although the extent of the deceleration remains uncertain.
Will Shu, Deliveroo Founder & CEO, said:
“We are delighted with the Deliveroo Q1 results. Demand has been strong in both the UK&I and International markets driven by record new consumer growth and sustained engagement from our existing consumers. This is our fourth consecutive quarter of accelerating growth, but we are mindful of the uncertain impact of the lifting of COVID-19 restrictions.
So while we are confident that our value proposition will continue to attract consumers, restaurants, grocers and riders throughout 2021, we are taking a prudent approach to our full year guidance.”
The Hut Group, which owns beauty sites such as Lookfantastic and Glossybox, has also seen solid demand since the lockdowns began.
THG has reported that revenues swelled 42% last year, to £1.6bn, sending adjusted profits up by 35%, thanks to strong demand for nutrition and beauty products.
But the lockdown has also led to strong demand for home wine deliveries.
Naked Wines has posted annual sales growth of about 68% this morning, above the top end of expectations, thanks to a surge in orders during the coronavirus-induced lockdowns -- notable in America.
Naked’s US business grew by 75% in the last year, and now makes up roughly 45% of Group sales.
Its also grown its active customer base of ‘Angels’, who make regular monthly payments, to 885k, a year-on-year increase of approximately 50%.
Nick Devlin, Naked’s chief executive officer, says there’s been an ‘enduring shift’ towards online demand.
Whilst in some ways 2021 is as difficult to predict as 2020, I believe we have seen an enduring shift of demand online across multiple categories.
Ultimately whilst COVID has driven the trial of many online models, the long-term winners will be the businesses that offer customers a genuinely differentiated offer: I firmly believe Naked will be one of those long-term winners.
- 9.30am BST: Bank of England credit conditions survey
- 1.30pm BST: US retail sales for March
- 1.30pm BST: US weekly jobless figures
- 2.15pm BST: US industrial production for March