New lockdowns to hit sales at AB Foods, Ocado lifts earnings guidance

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The FTSE 100 is expected to open 13 points lower on Monday, having closed down 0.08% on Friday, at 5,577.27.

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Primark owner Associated British Foods said it expected to lose £375m in sales as new Covid-19 lockdowns across Europe forced the closure of its stores. The company on Monday shuttered all shops in Republic of Ireland, France, Belgium, Wales, Catalonia in Spain and Slovenia representing 19% of its retail space. Lawmakers in England are set on Wednesday to vote on a one-month lockdown which would see 57% of the store estate closed. “We are implementing the operational plans developed to manage the consequences of these closures and appropriate action will be taken to reduce operating costs. All orders placed with our suppliers will be honoured,” the company said in a statement.

Ocado increased its guidance for annual earnings to more than £60m from more than £40m as consumers switch to online shopping. The company also agreed to buy Kindred Systems, a piece-picking robotics company, for about $262m and robotic arm designer Haddington Dynamics for $25m.

Howden Joinery reported a “significant improvement” in trading since lockdown lifted on Monday, with total revenue from UK depots for ‘sales periods seven to 11 rising 12.3% year-on-year, with its gross margin ahead of the first half of 2020, but lower than the same period in 2019. The FTSE 250 company said that, with signs of pent up demand since lockdown and a high level of stock availability, it extended our ‘P11’ sale period across periods 10 and 11 this year, which helped its supply chain management and the ability of depots to service demand. For the year to date, total UK revenue was 6.8% below that for 2019.

Newspaper round-up

Bank of England policymakers are expected to inject up to £100bn into the economy when they meet this week amid mounting fears that the four-week lockdown for England will lead to a double-dip recession. Threadneedle Street’s nine-strong monetary policy committee (MPC) will spend the next few days weighing up the impact of the renewed closure of large chunks of the economy before announcing its latest decisions on Thursday. - Guardian

Retailers and hospitality firms have warned of the devastating financial impact of a new month-long lockdown in England which they say threatens billions of pounds worth of Christmas trade and puts hundreds of thousands of jobs at risk. The next two months should be the most lucrative time of the year for the high street but 500,000 shops, restaurants and pubs will have to close on Thursday and remain shut until 2 December. - Guardian

Ministers’ failure to get a passenger testing system up and running has put hundreds of thousands of jobs in the aviation industry at risk, says Heathrow’s chief executive. Writing for The Daily Telegraph, John Holland Kaye said delaying a passenger testing regime meant the UK’s world class aviation sector was “now hanging in the balance with hundreds of thousands of livelihoods across the UK at risk as a result”. - Telegraph

Stellar sales of its £95 figure-hugging leggings during lockdown have prompted Sweaty Betty to limber up for a new investor. The upmarket British sportswear brand, which was founded in Notting Hill in 1998 by Tamara Hill-Norton and her husband, Simon, has asked bankers at Goldman Sachs to tap private equity interest in a deal that could value the business at about £250 million. - The Times

US close

Stocks on Wall Street closed in the red on Friday, with the Dow Jones Industrial Average losing 0.59% to 26,501.60.

The S&P 500 lost 1.21% to 3,269.96, and the Nasdaq Composite was 2.45% weaker at 10,911.59.