LIVEBUSINESS LIVE: Compensation Demanded from Underperforming Water Companies
The FTSE 100 is set to open at 8am today. Among the companies releasing reports and trading updates are Asos, British Land, Smiths, Finsbury Food, PZ Cussons, and AG Barr. Read the latest business news in our Tuesday 26 September Business Live blog below. If you are using our app or a third-party site, click here to read Business Live.
ASOS Struggles to Rebound
Joshua Warner, market analyst at City Index, predicts a longer road to recovery for ASOS. Although the company has made progress toward becoming more agile and profitable, its earnings and cashflow were lower than expected due to ongoing sales pressure. While ASOS is implementing a faster stock model which has shown promising results, shareholders may need to adjust their expectations for the company’s turnaround.
Meta Platforms Surrenders Lease at Regent’s Place
Tech giant Meta Platforms has chosen to surrender one of the two buildings it leases from British Land at London’s Regent’s Place, indicating a cautious approach to office real estate amidst economic uncertainties. This decision will result in a dilution in earnings per share for Meta Platforms, but British Land remains optimistic about meeting market expectations for the 2024 fiscal year. The company has also experienced better-than-anticipated collections of historical Covid-19 arrears.
Smiths Group Reports Soaring Profits
Smiths Group, a British industrial technology company, has experienced a 20% increase in operating profit for the year ending July 2023. The company attributes this growth to high demand for its scanners, valves, and connectors, driven by decarbonisation trends. With a profit of £501 million for the year, Smiths Group anticipates continued growth in the upcoming year as well.
Paul Keel, chief executive, expressed satisfaction with the company’s progress and highlighted the importance of innovation, citing new product launches and investments in R&D. Keel also emphasized the company’s commitment to addressing megatrends in the markets they serve, such as energy transition and security.
ASOS Sales Slump
ASOS has reported a 15% decline in sales for the fourth quarter, and the company anticipates that second-half earnings will fall at the lower end of its projected range. However, ASOS remains confident in its turnaround plan, which focuses on prioritizing profitability, reducing stock levels, cutting costs, and improving cash flow. The company implemented this strategy after facing operational challenges and profit decline.
Underperforming Water Firms to Compensate
Underperforming water companies, including Thames Water, will be required to repay customers £114 million next year, according to industry regulator Ofwat. This announcement follows Ofwat’s recent report, which revealed that these companies have failed to meet their targets for customer and environmental improvements. While customers may benefit from bill reductions, Ofwat CEO David Black expressed disappointment in the sector’s performance and emphasized the need for companies to regain public trust through better service and value.
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