Apple (US:AAPL), Troy Income & Growth (TIGT), Currys (CURY), British Retail Consortium (BRC) and Wickes (WIX)
Apple’s (US:AAPL) growing services business came to the rescue, as product sales fell by 5 per cent in the three months to September.
The services business rose 16 per cent year-on-year to $22.3bn. The growth of its highest margin business meant it was able to increase earnings per share by 13 per cent to $1.46, which was 4.9 per cent ahead of analyst expectations. Services include payments to the App Store, as well as subscriptions to Apple TV and Apple Music.
Despite its strong performance, total revenue was down 1 per cent year-on-year to $89.5bn. iPhone sales rose 3 per cent to $43.8bn, helped by the release of the iPhone 15 Pro. However, as the phone was only released near the end of the reporting period, it should have more of an impact in the coming quarter.
The problem was a big drop in Mac and iPad sales, as well as headwinds from the strengthening dollar. China revenue also fell 4.2 per cent quarter-on-quarter to $15.1bn due to its weak economy and the release of a new Huawei phone.
Apple’s share price was down around 3 per cent in after-hours trading. AS
Look out for our in-depth feature on Apple next week
Trust share buybacks come under strain
A lack of cash and potential merger plans have prompted Troy Income & Growth (TIGT) to suspend its share buyback programme.
The board of the £153mn equity income trust said TIGT was “now very close to fully utilising its existing authority to repurchase shares and depleting its distributable shares”. The board is also mulling the possibility of merging with another trust, prompting it to put buybacks on ice for now. Any merger details should be unveiled by the end of November.
Wide share price discounts have prompted trusts to carry out huge buybacks, amounting to nearly £2.8bn in the first nine months of 2023 versus £2.1bn for the equivalent period in 2022.
But strains might be starting to show: the TIGT update comes a few days after wealth preservation trust Capital Gearing (CGT) said it was seeking court approval to reclassify its share premium account as distributable reserves to support its own buybacks. The trust said its distributable reserves came to just £23.8mn at the time, and that it would be “temporarily limiting” its buybacks while it waited on the courts. DB
Soggy October keeps shoppers away
Footfall in October was 5.7 per cent lower than in the same month last year, with heavy rainfall and high inflation blamed for the lack of shoppers.
The fall was a big drop on the 2.9 per cent decline recorded in September, according to the British Retail Consortium (BRC).
The decline was uniform across all locations, although retail parks (down 4.3 per cent) fared better than the high street (down 4.6 per cent) and shopping centres (down 7.3 per cent).
“While consumer confidence may be higher than 2022 it is still very weak,” said Helen Dickinson, chief executive of the British Retail Consortium. “The economic landscape remains tough, with input prices and cost pressures above normal levels. MF
