Hochschild profits fall sharply, Softcat to beat its own forecasts

London open

The FTSE 100 is expected to open six points higher on Wednesday, having closed down 0.83% at 6,076.62 on Tuesday.

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South America-focused miner Hochschild reported a sharp fall in profits on Wednesday as operations were shuttered during the coronavirus lockdown. Adjusted core earnings almost halved to $80.65m as revenue fell to $232m from $354m a year ago, despite higher gold and metal prices. Hochschild said it hoped to cash in on record commodities prices in the second half “provided our people are able to operate safely and experience less disruption”.

IT infrastructure company Softcat said on Wednesday that it continued to trade “satisfactorily” during the final three months of its financial year, and delivered operating profit for the full year “slightly ahead” of its own expectations. The FTSE 250 company said cash generation also remained strong through to the year-end on 31 July, adding that it now intended to resume its normal dividend policy and timetable later in the year. That would include payment of the interim dividend previously cancelled in March, the board confirmed.

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It was hoped at the onset of the coronavirus pandemic that the economic fallout wouldn’t last too long. But as summer hurtles towards autumn, the catastrophic scale and persistence of the crisis is becoming increasingly clear. Germany extending its furlough wage subsidy scheme from 12 to 24 months is a decision being taken against this backdrop. The longer the economic damage lasts, the more help Berlin estimates its economy will require to weather the storm. Unemployment around the world is climbing, with a steady drumbeat of job cuts announced by big-name companies with every passing week.- Guardian

Councils in England face a £2bn “perfect storm” over the next few months and will be forced to cut services if the government does not meet the cost of soaring Covid-19 spending, the Institute for Fiscal Studies think tank has warned. Without additional financial support, councils “face a difficult choice between depleting their reserves to low and potentially risky levels or cutting spending on important local services”, the IFS said. – Guardian

The energy regulator has ordered an investigation into the National Grid after the cost of maintaining the system during lockdown hit a record £718m. The UK's electricity system suffered a historic plunge in demand after measures were imposed to curb the spread of coronavirus in March, falling to its lowest level of usage in nearly 40 years. – Telegraph

The deputy chairman of Frasers Group bought £11,110 of shares “in error” three days before the company is due to report its annual results. The FTSE 250 business was forced to put out a statement after it emerged that David Daly, 61, had bought 3,912 shares on Monday despite the company being in a closed period. – The Times

Pizza Express plans to close almost a fifth of its British restaurants under a financial restructuring that places 1,100 jobs at risk. The casual dining chain said it hoped to redeploy some of the staff affected by the company voluntary arrangement, which aims to reduce rents across much of its remaining store estate. - The Times

US close

Wall Street stocks closed in a mixed state on Tuesday, following some stronger-than-expected earnings from retail giants Walmart and Home Depot.

At the close, the Dow Jones Industrial Average was down 0.24% at 27,778.07, while the S&P 500 rose 0.23% to 3,389.78 and the Nasdaq Composite was 0.73% firmer at 11,210.84.

The Dow closed 66.84 points lower on Tuesday, carrying on with the downward trajectory seen in the previous session.

Tuesday's main focus was earnings from some of the US' biggest retailers, with Walmart topping earnings and revenue estimates amid a surge in same-store and e-commerce sales, while Home Depot shares ticked up after quarterly sales surged 23% as Americans turned to do-it-yourself projects amid Covid-19 lockdowns.

Shares in Walmart closed down 0.66%, while Home Depot was 1.12% lower.