Tesco triumph
Is Tesco boss 'drastic' Dave Lewis's overhaul of the grocery giant complete? The latest results would suggest it is getting close. A near-800 per cent leap in pre-tax profits to £1.3bn for the year to February signalled a welcome return to form for the retailer as it defied the wider gloom on the high street. The news also propelled its shares to their highest level since 2016 as investors welcomed the 3p-a-share payout – the first full-year dividend since 2014. Mr Lewis has dramatically restructured Tesco, cleaving off underperforming peripheral businesses and acquiring wholesaler Booker. He has also sharpened up operating performance with the operating margin hitting 3 per cent in the second half, heading towards his target of 3.5-4 per cent by 2020, while also slashing net debt.
Deutsche damned
Achleitner under fire
Pressure mounted on Deutsche Bank's chairman Paul Achleitner after the messy replacement of chief executive John Cryan with internal 'continuity' successor, Christian Sewing. The bank's shares rose slightly in response on Monday, but investors and analysts criticised Achleitner after cutting Cryan's contract two years early. One of the bank’s biggest shareholders described the succession process as “chaotic” and a senior banker close to the latest management changes predicted that investor pressure would lead to Mr Achleitner’s removal within a matter of months. New boss Mr Sewing warned of "tough decisions" in order to make the bank profitable again in a letter to the company's workers published on its website.
Easter bunnies
UK retail rise
The early timing of Easter boosted the British Retail Consortium-KPMG Retail Sales Monitor data for March 2018, helping to make up for the unseasonal weather earlier in the month. Like-for-like retail sales rose 1.4 per cent in March, up from 0.6 per cent in February. Overall, retail sales rose 2.3 per cent in March, up from 1.6 per cent in February – the fastest pace of growth since September last year. But this masked a volatile performance for the month – while food sales continued to grow quite strongly, up by 5.3 per cent in the three months to March, sales of non-food were down 3 per cent at a total level.
Xi's olive branch
Trade spat continues
President Xi Jinping offered no major new concessions in a speech at Asia's Boao Forum, his first high-profile public appearance since China and the US last week threatened to impose punitive tariffs on $100bn-worth of bilateral trade flows. Most of the measures mentioned, such as reduced limits on foreign investment in the automotive, shipbuilding and aviation sectors, had already been announced and did little to quash fears that the world’s two largest economies could become embroiled in a trade war. “China does not seek trade surpluses,” President Xi said as he pledged to “significantly lower” tariffs on imported vehicles. That came just hours after President Trump complained on Twitter that China's 25 per cent tariff on imported cars was 10 times that imposed by the US.
Green light
Bayer and Monsanto deal close
Reports that regulators are set to green-light the $66bn merger of Monsanto and Bayer led to healthy gains in the share prices of both companies earlier this week. Monsanto shares tumbled nearly 5 per cent earlier in March amid concerns that Bayer would not win US regulatory approval. However, Bayer climbed 4.7 per cent following the reports, after a 6.2 per cent jump for Monsanto in New York. The deal would transform the German aspirin-to-chemicals conglomerate into the world’s biggest supplier of seeds and crop sprays to farmers.
Risers and Fallers
| NAME | (%) Change (1/week) |
| MICRO FOCUS INTL. | +14.74 |
| CARD FACTORY | +10.82 |
| FIRST GROUP | +10.75 |
| SOPHOS GROUP | +9.92 |
| DRAX GROUP | +9.67 |
| DIRECT LINE IN.GROUP | -7.72 |
| EVRAZ | -8.8 |
| POLYMETAL INTERNATIONAL | -12.42 |
| SANNE GROUP | -12.89 |
| RANK GROUP | -14.3 |
Week to 11 April 2018
Taxi!
Uber setback
France is now entitled to bring criminal proceedings against taxi-hailing app Uber, after the European Court of Justice ruled that the French government was within its rights to ban some transport services in 2014 without first notifying the European Commission. This is the latest in a string of blows to the Silicon Valley giant. In December, the ECJ ruled Uber should be classified as a transport service, opening it up to tougher legislation in the EU. Uber argued that the court ruling will have little impact on its operations as the UberPop peer-to-peer service was suspended in 2015 and now only works with licensed drivers in most of the EU.
Rate rise coming
BoE shouldn't delay
Bank of England (BoE) monetary policy committee member Ian McCafferty has said that the bank shouldn't delay raising interest rates again, pointing to the strong pick-up in the world economy and possible faster pay rises. The BoE raised interest rates for the first time in a decade back in November, saying Britain was more prone to inflation than in the past. Then, in February, it said it would likely to need to raise interest rates earlier and by more than initially thought. McCafferty added he had not seen any data or developments with Brexit to suggest he was wrong to vote for a rate rise last month.
