Evergrande, Shares in Crisis-Hit Property Giant Jump in Market Return

Happy Saturday to you. My weekly Brave, Bold, Brilliant business news is a great way to check in with what’s happening in the world of business globally.

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There’s certainly a lot happening in the world of business, which is why I’m here every week to bring you the latest business news of what’s going on both in the UK but also globally. Feel free to let me know if there’s anything specific you’d like me to cover in future updates.

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In the meantime happy reading!

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GENERAL

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Cost of national debt hits 20-year high - The interest the government pays on national debt has reached a 20-year high as the rate on 30-year bonds reaches 5.05%. A rise in the cost of borrowing comes at a difficult time for the chancellor, Jeremy Hunt, as he prepares for the autumn statement on 22 November. Mr Hunt has already made clear that tax cuts will not be announced in November. The higher cost of servicing the country's debt pile could influence the decisions he makes on spending. The total amount the UK government owes is called the national debt and it is currently about ￡2.59tn.

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Food prices see first fall for two years as stores compete - Fierce competition between supermarkets has led to the first monthly drop in food prices for more than two years, an industry body has said. The British Retail Consortium (BRC) said prices in September were down 0.1% from the previous month. Prices of dairy goods, margarine, fish and vegetables - which are often own-brand lines - all saw falls, it said. Grocery inflation - the annual rate at which food prices are rising - remains high but is starting to ease. The BRC said food prices rose by 9.9% in the year to September, down from a rate of 11.5% in August. Overall shop price inflation - which includes non-food items - fell to 6.2% last month, the lowest rate for a year.

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ON THE UP

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Wetherspoons toasts first annual profits since pandemic - J D Wetherspoon has credited a surge in sales and reduction in costs for its first annual profit since the COVID pandemic. The value pub and hotel chain, which trades from 826 sites across the UK and Ireland, reported profit before tax for the year to the end of July of ￡42.6m. That compared to a loss of just over ￡30m during the previous 12 months. Like-for-like sales rose by 12.7% and total sales by 10.6% to ￡1.92bn. Food sales were a major factor behind the revenue rise while bar sales were up 9%.

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Ivy Brasserie parent company reports 'strong growth' - Troia (UK) Restaurants, which owns and operates the Ivy brand, reported "strong growth" in the 52 weeks ended 1 January 2023 following the expansion of Ivy Asia. Profit before tax grew to ￡29m from ￡20.4m in 2022, while adjusted EBITDA (earnings before interest, taxes, depreciation and amortisation) rose to ￡54.8m from ￡37.9m. Turnover for the period also jumped to ￡302.9m from ￡200.4m in 2022 after the group opened five new Ivy Asia restaurants and two Ivy Brasseries in Chichester and Windsor.

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Topps Tiles reports record ￡263m sales as retailer shrugs off year of soaring inflation - Group sales were approximately ￡263m for the 52 weeks ending at the end of September, an increase of 6.4% year-on-year and now more than ￡40m higher than in 2019.?The Manchester retailer said it expects its market share to increase significantly in its full year results as it “moves rapidly” towards an early delivery of its ‘1 in 5’ goal – to account for ￡1 in every ￡5 spent on tiles and associated products in the UK by 2025.

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Tesco raises profit forecast after strong first half - The grocer has hiked its profit guidance for the year to ￡2.6bn and ￡2.7bn, from its original forecase of ￡2.5bn. The grocery giant’s like-for-likes advanced 7.8% – and 8.7% in the UK – in the half to 26 August as adjusted operating profit jumped 13.9% to ￡1.48bn. Total sales hit ￡30.75bn. 特易购公司 chief executive Ken Murphy said: “Food inflation fell across the half and while external pressures remain, we expect that it will continue to do so in the second half of the year."

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Greggs on course for record shop openings as expansion continues - The company expects to add between 135 and 145 new shops this year, and is also adding working with Uber Eats to extend its delivery model in a bid to offer its products to “more customers on more occasions”. In results for the third quarter of its financial year, Greggs said its total sales rose 20.8% while like-for-like sales in its own shops increased by 14.2%. The company said it was still being affected by cost pressures, but that inflation was easing and the cost-of-living crisis had seen many customers choosing Greggs’ good value products.

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TUI Group boosts tech capabilities with new digital hub in Porto - The ‘digital hub’ in the Portuguese city of Porto to support its technology developments in areas such as artificial intelligence. The travel giant said the new hub will “strengthen” Tui’s tech capabilities which are “key to its transformation towards a global digital travel and leisure platform company”. It has 150 technology experts working on the company’s mobile app, payment systems and artificial intelligence-powered technologies across its platforms.

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IN THE DOLDRUMS

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Hovis falls to ￡28.6m loss amid cost recovery delays - Wrapped bread player Hovis Ltd has fallen to a near ￡30m loss amid delays in passing through soaring input costs. Newly filed accounts for Hovis Group for the 38 weeks to 24 September 2022 showed the group falling to a pre-tax loss of ￡28.6m from a profit of ￡47.3m in the previous 14 month period to 31 December 2021. Comparable sales for the shortened period were 309.8m, up 15.2% on a pro-rata basis. However, gross margin dropped markedly from 22.8% to 16.8% as the group was affected by ingredient and energy costs, and the “highly competitive” supermarket grocery environment for bakery.

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X ad revenues continue to slide ahead of one-year Twitter takeover anniversary - X , the social media platform formally known as Twitter , has seen ad revenues plunge by more than 55% every month since Elon Musk’s takeover a year ago, according to reports today. Ad revenue in August declined 60% year-over-year, according to research firm Guideline and reported by Reuters, though the worst month was December 2022 when revenues dropped by 78%.

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Evergrande, Shares in crisis-hit property giant jump in market return - Shares in crisis-hit Chinese real estate giant Evergrande Group have jumped as trading in the firm resumed after being suspended in Hong Kong. The company halted trading in its shares on Thursday as it confirmed that its billionaire founder was being investigated by authorities. Evergrande shares soared by more than 40% in early trading on Tuesday before settling at around 20% higher. It defaulted on its debts in 2021, triggering a property?in China. The latest share suspension came just a month after the firm's previous 17-month trading halt was lifted.

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ONES TO WATCH

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The Body Shop’s ￡500m valuation deters potential bidders - Private equity firms interested in snapping up The Body Shop are hesitating due to the high valuation set by its Brazilian owner Natura, for a potential sale. The cosmetic giant Natura & Co is holding out for between ￡400m and ￡500m for the ethical health and beauty retailer.

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Frasers Group ups Boohoo stake to 13.4% - Frasers Group has increased its stake in Boohoo once again as it continues to build on its “strategic investment” into the fashion retailer. Mike Ashley’s empire upped its shares in the retailer from 10.4% to 13.4%. Frasers Group previously described the retailer as an “attractive proposition” due to its “laser focus on young female consumers”.

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Stocks and sandals: BIRKENSTOCK targets over $9bn valuation in US IPO - The German premium footwear brand backed by private-equity firm L Catterton , said?it is seeking a valuation of up to $9.2bn in its highly anticipated U.S. initial public offering (IPO). The company and its stockholders are expecting to sell at least 32m shares, likely to be priced between $44 and $49 apiece, and potentially raise about $1.58bn at the top-end of the range, according to a filing with the US Securities and Exchange Commission.

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