Revenue rises for Ocado, AO World flags strong demand

London open

The FTSE 100 is expected to open 63 points lower on Tuesday, having closed up 1.33% at 6,176.19 on Monday.

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Online grocer Ocado reported a rise in half-year revenue as Britons turned to home deliveries during the coronavirus lockdown. The company on Tuesday said revenue for the six months to May 31 increased 27.2% to £1.02bn. Retail core earnings almost doubled to £45.7m from £24.4 a year earlier. Group core earnings fell 36% to £19.8m, reflecting increased costs from investment in Ocado’s International Solutions business, which also contributed to a loss before tax of £40.6m, narrowed from £147.4m in 2019.

AO World said it experienced strong demand during the Covid-19 crisis but was cautious about the outlook as it reported a smaller annual loss. The online household appliance retailer's operating loss for the year to the end of March narrowed to £3.8m from £13m as total revenue rose to £1.05bn from £902.5m. AO said the crisis had converted many customers to online shopping but warned that shrinking economies, fewer housing transactions and a hard Brexit could hit sales.

Newspaper round-up

Rishi Sunak’s multibillion-pound economic response to Covid-19 has been criticised for lacking transparency by the incoming head of the Treasury’s independent tax and spending watchdog. Richard Hughes, the economist picked by the chancellor to lead the Office for Budget Responsibility, told MPs on the Commons Treasury committee that taxpayers lacked enough information to know whether the measures outlined by Sunak at last week’s summer statement would be cost effective. - Guardian

Nationwide building society has returned to the high loan-to-value mortgage market, cutting the deposits it requests from first-time buyers following last week’s announcement of a stamp duty holiday. But in a sign that lenders are uncertain about the direction of the housing market, it has capped loans at 90% and introduced new hurdles for would-be borrowers. – Guardian

A massive write-off of toxic Covid debt may be the only way to save the economy from stagnation as thousands of businesses struggle to survive, the new head of the spending watchdog has warned. – Telegraph

The government has been accused of dragging its feet on corporate reforms and changes to the regulation of auditing months after it was urged to make progress in light of the failure of Thomas Cook. Darren Jones, chairman of the Commons business select committee, said the business department needed to show “far more urgency” after it declined to give a date for primary legislation on audit reform. – The Times

The government has to trust Heathrow to be able to manage Covid-19 monitoring if it wants to kickstart the UK economy and get the aviation industry and long-haul travel back up in the air. That is the plea from Britain’s biggest airport as it reported that in June passenger traffic through Heathrow was down 95 per cent year on year. – The Times

US close

Wall Street stocks closed in a mixed state on Monday, after another record spike in new Covid-19 cases in Florida at the weekend.

The Dow Jones Industrial Average ended the session up 0.04% at 26,085.80, while the S&P 500 slipped 0.94% to 3,155.22 and the Nasdaq Composite was 2.13% weaker at 10,390.84.

It was a turbulent session for the Dow, which had opened more than 300 points higher before climbing even further, followed by a sharp drop in afternoon trading.

A rosier sentiment had initially carried over from Friday, as news about a potential coronavirus treatment bolstered investor sentiment around prospects for the economic recovery.

The southern state of Florida reported a total of 15,299 new Covid-19 cases on Sunday, marking the single highest single-day total for any US state since the pandemic began, while the US as a whole has reported more than 60,000 new cases every day for the last three days.