Traders in the City normally love job cuts.
Not when they happen to them, of course, but news of a fabulously profitable multi-national company laying off thousands of people is usually cause for fingers to hit the ‘buy’ button in the hard-nosed dealing rooms.
This morning Centrica (LON:CNA), which trades under the British Gas and Scottish Gas brands, announced it is to cut 6,000 jobs while Royal Dutch Shell (LON:RDSA) saw Centrica’s 6,000 and raised it to 6,500.
The market liked Shell’s update, and disliked Centrica’s, and the reasons go beyond the job cuts.
Centrica, the gas and electric utility group today revealed a 2% reduction in revenue for the first half of its financial year, to £15.4bn from £15.74bn, and operating profit fell 3% to £1bn.
The losses came from the group’s upstream activities, whereas ‘customer facing’ businesses like British Gas were more profitable than last year.
The shares fell about 3%, whereas Shell’s shares went up by about the same amount, as it committed to paying a dividend of US$1.88 this year and to at least maintain the dividend at that level next year.
A deal between Sainsbury’s (LON:SBRY) and Lloydspharmacy could be the shape of things to come in the troubled supermarket sector.
The supermarket chain is selling its pharmacy business to Lloydspharmacy, the UK’s second largest chain of chemists, for £125mln.
It seems a good deal for Sainsbury’s, which, like most of the big four supermarket chains, has more floor space in its bigger supermarkets than it probably needs, as it will also charge Lloydspharmacy rent for the 277 in-store pharmacies acquired as part of the deal.
All of the pharmacies will be rebranded under the Lloydspharmacy marque.
With a veritable deluge of results from blue-chip companies today, for a small cap company to gain some coverage it has to either release some astoundingly good news or some rank bad news.
For All Leisure Group (LON:ALLG), sadly, it is the latter. The shares tanked as the cruises operator revealed half-year losses of £12.0mln, which was at least an improvement on the previous year’s loss before tax of £15.4mln.
Geo-political events continue to affect the business adversely; particularly in Russia, the Ukraine and Black Sea.
“Our Escorted Tour programme to Russia has been cancelled as a consequence of the onerous new visa regulations, which deterred our customers from booking,” the company said.
These days an armed escort tour might be more appropriate.
Hats off to accesso Technology (LON:ACSO), the theme park ticketing specialist, which has been a trifle unfortunate in the timing of some excellent news, though to be fair, the market has picked up on its global deal with Merlin Entertainments (LON:MERL), and marked the shares up sharply.
The company, which takes the waiting out of queuing, has raised profits guidance for the next two-and-a-half years.