BUSINESS LIVE: Sainsbury's plots banking withdrawal; IDS revenues soar; Watches of Switzerland slashes guidance

Steel giant Tata is to press ahead with plans to close blast furnaces at its biggest plant, threatening more than 3,000 jobs, according to sources speaking to the Press Association.

Unions were meeting the company today after presenting alternative proposals aimed at saving jobs in Port Talbot, south Wales.

Sources said Tata rejected the plan and were pressing ahead with proposals for a greener form of steelmaking to cut emissions and stem financial losses.

Unions will consult their members on how to respond to job losses, with industrial action not being ruled out.

Sources said Tata accepted a union plea to keep the hot strip mill open over a transition period, supporting hundreds more jobs.

A Tata Steel spokesman said ahead of the meeting: ‘We have recently announced a joint agreement between Tata Steel and UK Government for a proposal to invest in state-of-the art Electric Arc Furnace steelmaking in Port Talbot.

‘We are committed to meaningful information sharing and consultation with our trade union partners about the plan to develop sustainable steelmaking in the UK and to find solutions for concerns they may have.

‘While those discussions are ongoing it would not be appropriate to comment further.’

Just before close, the FTSE 100 was 0.15% up at 7,457.11.

Meanwhile, the FTSE 250 was 0.53% higher at 18,963.48.

AJ Bell ended last year with record levels of managed assets as the global economic backdrop improved in the latter months, boosting investor confidence.

The investment platform revealed assets under administration totalled £76.2 billion at its platform business on 31 December, a 15 per cent increase from the previous year and 7 per cent higher than in September.

(PA) – Under-pressure retailer Naked Wines has said it is cutting jobs across the business, including its board, to slash costs as sales continue to tumble.

The online wine firm said jobs were being axed across “all levels of the organisation” under plans to save another £7million a year.

Naked Wines said that, to reflect this, it has “decided to reduce the size of the board” and announced that non-executive director of two years, Melanie Allen, had left the board with immediate effect.

About 50 jobs are going across the business overall and staff have been told, according to the firm.

The cuts were announced in a trading update showing that sales fell by 10% on a constant currency basis year on year in its third quarter and over Christmas, traditionally its peak selling season.

Just two months ago, Naked Wines’ former chief executive, Nick Devlin, quit the top post suddenly amid a severe profit warning, with founder and chairman Rowan Gormley taking over the running of the business until a permanent replacement is hired.

Mr Devlin stayed on over the Christmas period in his dual role as president of Naked Wines US before leaving the group completely.

Global trade is facing even more turmoil after a sever drought that began last year has forced authorities to slash ship transits by 36% in the Panama Canal, one of the world’s most important trade routes.

The new cuts announced on Wednesday by authorities in Panama are set to deal an even greater economic blow than previously expected, amid a crisis in the Red Sea that is already wreaking havoc on global trade between Asia and Europe.

Currys expects annual profits to surpass forecasts despite a dip in sales over the festive period as cost-cutting measures help bolster its margins.

The electronics retailer anticipates adjusted pre-tax profits of between £105million and £115million for the current financial year, compared to consensus forecasts of £104milllion.

Land and property group Henry Boot has struck a deal to sell 759 residential housing plots in Swindon to housebuilder Vistry for an undisclosed fee.

The site in South Marston was secured by Henry Boot’s land and planning business, Hallam Land Management, via an option to purchase the land over 20 years ago.

Embattled music investor Hipgnosis Songs Fund is set to offer up to £20million to lure potential takeover bidders.

The music rights fund, which owns catalogues from the likes of Shakira and Neil Young, will offer the payment as a form of ‘cost protection’, it said on Thursday.

Travis Perkins has signalled further cost cutting measures after axing jobs at the end of last year, as the retailer slashes expenditure in the face of a construction slowdown.

The group, which owns the Toolstation chain, said job cuts were made in the final three months of 2023, largely across its Northampton headquarters and central support teams, with some staff impacted within its branches.

Travis Perkins told investors on Thursday it is ramping up cost-cutting efforts to try to save £35million per annum, with trading set to remain difficult in the year ahead.

TSB has issued an urgent scam warning, after the bank found that a third of ads on Facebook Marketplace could be fake.

The bank is urging consumers to avoid making online purchases on Facebook Marketplace so they don’t fall victim.

The surge came despite fourth-quarter revenues in the US, where it has been expanding its presence, coming in below guidance after shelling out over £270million on customer-friendly sporting results.

In the UK and Ireland, Flutter’s revenue jumped 15 per cent to £2.46billion year-on-year, with sports betting and gaming revenues climbing 12 per cent and 17 per cent respectively in constant currency. This region also saw a 5 per cent rise in average monthly players to 3.9million.

Royal Mail’s parent company achieved its best Christmas for four years in 2023, but its boss has warned the postal service is not sustainable in its current form.

Martin Seidenberg, the chief executive of International Distributions Services, said it was ‘simply not sustainable’ for the Royal Mail to run a delivery network built to handle 20 billion letters when it currently only delivers 7 billion letters.

Watches of Switzerland shares fell sharply on Thursday after the group became the latest luxury retailer to sound the alarm and issue a profit warning.

The London-listed group slashed its annual revenue forecast, as shoppers rein in splurging on luxury items and economic headwinds prevail.

Watches of Switzerland shares slumped over 30 per cent or 172.4p to 414.6p on Thursday, having fallen over 57 per cent in the last year.

Jeremy Hunt will ‘bang the drum’ for investment in Britain as he seeks to woo business leaders in Davos.

The Chancellor is arriving at the annual meeting of the World Economic Forum in the wake of his Labour rival Rachel Reeves, who has been on a charm offensive since earlier in the week.

The new boss of BP has doubled down on the oil giant’s green strategy despite pressure to close the gap with rival Shell.

Murray Auchincloss was yesterday appointed permanent chief executive – a role he has held on an interim basis since Bernard Looney was forced to quit in disgrace last year.

London-listed stocks are treading water in early trading following a three-day slump, driven by concerns about interest rate cuts coming later than expected.

The exporter-heavy FTSE 100 hovers near a seven-week low after being hit in the previous session, when a slew of economic data and hawkish comments from central bank policymakers dampened the mood.

Watches of Switzerland has tumbled 28.1 per cent, by the most on record, after the retailer of luxury watches slashed its annual revenue forecast as economic headwinds prompted consumers to rein in spending.

Its stock was the biggest decliner among FTSE 250 constituents.

Flutter has climbed 9.4 per cent after the online betting giant posted a 15 per cent rise in fourth-quarter revenue.

Sainsbury is plotting a ‘phased withdrawal’ from its banking operations as the retailer continues to pursue its ‘Food First’ strategy.

Financial products will be offered through ‘dedicated financial services providers’ through a distributed model. Sainsbury’s already does this with its insurance policies.

Currys has forecast full year profit ahead of market expectations after stable gross margins and cost savings offset a fall in underlying sales over the Christmas trading period.

The seller of cookers, fridges, washing machines, TVs, computers and mobile phones said it now expected a full year 2023/24 adjusted profit before tax of £105million to £115million.

Prior to the update, analysts were on average forecasting £104million, down from the £119million made the previous year.

Currys said like-for-like revenue in the UK & Ireland business fell 3 per cent in the 10 weeks to 6 January, with strong sales in mobile, offset by weaker trends in TVs and computing.

‘We’re in a healthy financial position, and our strategy is delivering a consistently improving customer proposition,’ CEO Alex Baldock said.

‘As consumer confidence improves, we’ll be well placed to build on these strong foundations.’

Luxury watches retailer Watches of Switzerland has slashed its annual revenue guidance, as consumers continue to rein in spending and move away from splurging on luxury items.

For full-year 2024 revenue is now expected to be between £1.53billion and £1.55billion, compared with its earlier forecast range of £1.65billion to £1.7billion.

‘The festive period was particularly volatile this year for the luxury sector, with consumers allocating spend to other categories such as fashion, beauty, hospitality and travel. Whilst we are disappointed with this trend, we are encouraged by our market share gains in both the US and UK.

‘I would like to thank our colleagues for continuing to provide high quality service and support to our clients against this challenging backdrop.

‘We remain confident in the markets in which we operate, our model and the delivery of our Long Range Plan announced to the market in November 2023.’

Matt Britzman, equity analyst, Hargreaves Lansdown:

‘With strikes in the rear-view mirror, Royal Mail is starting to deliver the goods once more. That’s welcome news for investors in its parent company, IDS, but we’re far from calling this turnaround a job well done. Royal Mail is fundamentally stuck in the past, and to some extent, that’s out of its own hands.

‘As the UK’s designated postal service, it must deliver letters six days a week – among other things. Given the letter business is in structural decline, with no real hopes of a recovery, that puts Royal Mail in a tricky spot when competitors are free to focus investment on more lucrative areas.

‘Royal Mail must drive top-line growth if it wants to return to profit, and a large part of that needs to come from winning back customers lost while industrial actions wreaked havoc. Early signs are positive, but there’s a long way to go.

‘For now, the chance of breakeven profit for IDS at the group level is entirely propped up by the international business, GLS, which continues to perform well.’

Shares in the owner of William Hill fell after the bookmaker warned plans to increase spending on artificial intelligence (AI) and marketing will hit profits.

With tighter regulations also taking their toll in the UK, gambling giant 888 expects its annual profit to come in towards the lower end of the £340m and £397m range pencilled in by analysts.

Shares sank 1.5pc, or 1.25p, to 79.75p, taking losses for the year to 17pc. The profit warning – its second since September – came as it said cost-cutting has freed up to £30m for AI and marketing.

Royal Mail-owner International Distributions Services achieved its best Christmas in four years in 2023, with revenues rising nearly 10 per cent during the festive quarter.

Royal Mail has suffered several setbacks over the past couple of years, including strikes by postal workers, a cyber security incident, a fine from regulator Ofcom for missed delivery targets and the loss of its 360-year monopoly to deliver parcels from post office branches.

Its turnaround plan has, however, progressed under the leadership of Martin Seidenberg, while customers it lost during the strikes in late 2022 have returned to the postal and parcels company.

IDS, which also operates GLS internationally, reported group revenue of £3.59billion for the three months to December-end, up 9.8 per cent year-on-year.

Boss Martin Seidenberg hailed a ‘marked improvement in both trading and operational performance for Royal Mail over Christmas’, adding that the group has ‘continued to win-back customers’.

He added: We need to build on this momentum. With Ofcom due to publish options for the future of the Universal Service imminently, now is the time for urgent action.

‘We are doing all we can to transform, but it is simply not sustainable to maintain a delivery network built for 20 billion letters when we are now only delivering seven billion.’

Sainsbury’s is planning a ‘phased withdrawal’ from its core banking business, with financial products and services sold by the group set to be provided by third-party firms in the future.

Chief executive Simon Roberts said:

‘We have been clear since we launched our Food First strategy in 2020 that we would concentrate our efforts on our core retail businesses and today’s announcement reflects that strategic focus.

‘It’s business as usual for now at Sainsbury’s Bank and there will be no immediate changes to products and services as a result of today’s announcement.

‘We will of course communicate directly to customers well in advance of any changes to their products and services.’