AM update: Brexit worry rattles pound, Nikkei sinks, Ladbrokes revenues up

A subdued start to the week from Asian equities: the Nikkei 225 ended trading down -1.32% though the Hang Seng and Shanghai Composite maintained positive readings, up +0.27% and +0.30%. But the Japanese daily decline was the biggest for several months with Chiyoda Corp and Pioneer seeing -8.3% and -4.7% falls. There were some substantial drops from Seoul with the Kospi down -0.4%.

In the UK substantial Brexit anxiety continues; several European trading bodies are attending a Downing Street meeting today to attempt to clarify the future relationship between Britain and the EU. "This is an important meeting because the urgency that's shared by businesses across Europe is growing by the day," Carolyn Fairbairn, CBI director-general told Today earlier.

"This is very much shared by governments, the council and commission in Europe all moving quickly because the deadlines around December are very real.” Sterling has not been helped by a new letter from around 40 Tory MPs signing a no-confidence declaration in Theresa May. The news is significant: if eight more were to sign it would trigger a no confidence vote which could lead to a fresh Tory leadership fight. 

Overnight the euro was -0.12% lower against the dollar at 1.1650 while the pound was down considerably lower, -0.63%, at 1.3114. The euro put on weight against the pound, up +0.51% to 0.8883. 

• UK FTSE 100 7,432.99 -0.68%
• Dow 23,422.21 -0.17%
• S&P 500 2,582.30 -0.09%
• Nasdaq 6,750.94 +0.01%
• Nikkei 225 22,681.42 -0.82%
• DAX 13,127.47 -0.42%
• CAC 40 5,380.72 -0.50%
• Gold 1,277.00 +0.22%
• Oil WTI 56.75 +0.02%

Taylor Wimpey faces higher costs – but still positive on market conditions

We start with a second-half update from Taylor Wimpey. Its current total order book at 8,751 homes is now below last year (2016 period 8,981), and stands at £2.2bn (2016 2.3bn) says the housebuilder. 

Build costs are expected to rise 3-4% this year with more pressure from labour costs plus price inflation in building materials. Taylor Wimpey says it is still making “good progress” on leasehold agreements following the Ground Rent Review Assistance Scheme. “We expect a modest cash impact in 2017 with the majority of the outflow to be spread over approximately the next two years.”

The housebuilder says it’s still on  track for year 2017 results to be in line with expectations, “and we expect to achieve further growth and performance improvement in 2018”. Taylor Wimpey shares are +32% up in the last 12 months at 194.57p.

Ladbrokes digital revenues leap: Shutterstock

Ladbrokes Coral boosted by digital bets

We move onto bookie Ladbrokes Coral and a July-October trading update. Group net revenues are up +3% though UK retail like-for-like net revenues are down though -1%; like-for-like over-the-counter stakes slump -5%. However digital net revenue climbs +12% with Sportsbook net revenues up +18% and Gaming net revenues up +6%.

Ladbrokes claims “positive trading performance for the Group as well as solid delivery on the key operational and financial targets for the year including the swift integration of people, operations and platforms”. Clearly the bricks and mortar business is suffering compared to online sales. Recently Ladbrokes was ordered to stump up £2.3m to the gambling regulator on customer oversight worries.

Ladbrokes shares are up +12% in the last 12 months at 135.20p, but rising more than +18% year-to-date.

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