BUSINESS LIVE: Bitcoin surpasses record $69,000; Greggs eyes further growth; US rival to buy Spirent

Buying a car is an exciting moment, but selling a car can be a headache.

While most of us just want to get the car sold fast, we also want to get the best price possible.

Chancellor Jeremy Hunt is expected to cut National Insurance contributions by 2p in the Spring Budget tomorrow.

It comes just months after another 2 percentage point cut to National Insurance (NI) took effect in January, following an announcement in the Autumn Statement.

Foxtons revenues generated by house sales slumped last year, but the estate agent’s performance was buffered by a jump in rental income.

The London-listed group’s sales revenue fell 14 per cent to £37.2million in 2023 while the number of houses sold sank by 11 per cent year-on-year, reflecting higher mortgage rates and weaker mortgage availability.

Ashtead Group shares were the FTSE 100’s biggest faller on Tuesday morning after the firm warned revenue growth would be towards the lower end of guidance.

The equipment rental company, which leases machinery like battery-powered saws and forklift trucks, saw its shares slump 7 per cent in early trading before recovering to be 4.1 per cent down at £54.92 just after midday.

Only a day before Chancellor Jeremy Hunt makes his latest Budget statement, the UK’s new car market has posted its record February performance in two decades.

With vehicles being big-ticket items, the sale of new motors often provides an indication of economic activity.

(PA) – Car dealership Inchcape has posted surging annual profits but warned that growth will pare back over the year ahead.

The firm posted a 24% hike in pre-tax profits to £413million for 2023 after sales lifted 12%, when stripping out the boost from a recent acquisition.

But it said growth was expected to “moderate” in 2024, adding that it will keep an “even stronger” focus on costs in the tougher trading conditions.

Shares in the firm tumbled 9% in Tuesday morning trading.

Inchcape gave little update on the review of its UK retail business, after confirming at the end of January that it was considering a possible sale of the arm, except to say that the review remains in the “initial stages”.

It revealed that “in light of our review of strategic options for the UK retail business, we are re-evaluating our ambitions” for used car supermarket chain bravoauto as part of its vehicle lifecycle services (VLS) division.

The firm is already slashing the number of bravoauto sites across the UK.

It comes amid a tough used car market, which has seen prices surge due to a supply shortage, but values slumped last autumn, putting pressure on dealership profit margins.

The underlying rate on Premium Bonds could be set for another chop, depending on net financing targets outlined for National Savings and Investments in the Budget tomorrow.

Jeremy Hunt is making final preparations for his crucial pre-election Budget today as hopes mount that he could push through big tax cuts.

The Chancellor and Rishi Sunak have finalised the package after months of wrangling, with tough economic conditions having hampered their room for manoeuvre.

With the economy back in recession, it’s time for the Chancellor to pull out all the stops in this week’s Budget to help small businesses invest in future growth.

I always point to the unswerving optimism of entrepreneurs and the UK’s small business community in the face of what can feel like a relentless barrage of one thing after another.

The average price of petrol jumped by 4p a litre in February while diesel shot up by nearly 5p, making for the biggest monthly rise in five months, the RAC says.

A combination of oil rising above $80 dollars and the pound being worth just $1.26 (with oil traded in dollars) pushed wholesale costs higher for UK fuel retailers – costs that have been quickly passed to drivers with higher pump prices.

Spirent Communications shares skyrocketed on Tuesday after the FTSE 250 firm agreed to be bought by US-based communications equipment firm Viavi Solutions.

The takeover will be worth £1billion for the UK telecom testing business with Spirent shareholders receiving 175p per share, reflecting a 61.4 per cent premium to the firm’s closing share price on Monday.

Greggs has said it is on track to double turnover under an ongoing five-year strategy after achieving its strongest-ever performance in 2023.

The bakery chain, famous for its sausage rolls, reported total revenue rose by almost £300million to £1.8billion last year, with like-for-like sales in company-managed sites increasing by 13.7 per cent.

Hot on the heels of London Fashion Week, our rivals in Paris are wrapping up their own designer showcase.

The battle between iconic British and French fashion brands has a long history.

Business leaders are making a last-ditch bid to persuade Jeremy Hunt to scrap the tourist tax in his Budget this week.

As the Chancellor puts the finishing touches to tomorrow’s statement, the boss of Marks & Spencer joined a leading London jeweller and an executive at the O2 music arena to call for VAT-free shopping for foreign visitors to be restored.

By now we should all have had our fill of possible tax changes to be outlined in tomorrow’s Spring Budget.

The Tories find themselves in a last chance saloon and the main economic escape route is tax giveaways.

Mamta Valechha, equity research analyst at Quilter Cheviot:

‘Greggs reported strong profit numbers this morning, with profit before tax up 13% for the year, just slightly ahead of consensus. This follows its Q4 update provided in January where Q4 like for like sales also came in ahead of consensus at 9.4%.

‘This growth has been supported by market share gains from key strategic drivers including store openings, improved app participation, more stores opening into the evening, and delivery which is benefitting from the group’s partnerships with Uber Eats and Just Eat. With the balance sheet having been rapidly rebuilt, Greggs also announced a 40p special dividend today.

‘Greggs has had a strong start to 2024, with like for like sales up over 8% for the first nine weeks of the year. Cost inflation has come down and is expected to be between 4-5%, with 80% of energy requirement fixed for the year, and management has four months of forward cover on food and packaged goods.

‘The group also plans to increase manufacturing capacity at two of its sites in the Midlands, aiming to be operational by 2026/2027. As a result, capital expenditure is expected to be higher in 2024, and this will likely continue until 2026.’

The FTSE 100 has fallen to a near-three week low at the open, dragged down by Ashtead Group and commodity-linked shares, while telecommunications testing firm Spirent has surged nearly 60 per cent following a buyout deal.

Shares of commodity majors such as BP, Shell and Glencore are down by about 1 per cent each as oil and metal prices dip on pledges by China to transform its economy amid stuttering growth since the pandemic failed to impress investors.

Ashtead has dropped 6.1 per cent to become the biggest loser in the FTSE 100, after the British equipment rental firm forecast full-year group rental revenue at the lower end of its 11 to 13 per cent growth range.

Shares of Spirent Communications jumped after US-based communications equipment firm Viavi Solutions Inc agreed to buy the British firm in a deal valued at about £1billion.

Inchcape is down 7.6 per cent after the car distributor said it expects’ moderated growth’ in the short term.

Nearly £70billion was wiped off the value of Apple after the US tech giant was fined £1.5billion by European regulators for violating laws on music streaming.

The iPhone maker was accused of stopping streaming apps like Spotify from telling customers they can subscribe for cheaper if they do not use Apple’s App Store.

As Jeremy Hunt prepares to deliver what could be his final budget as Chancellor this week, Britain’s pub industry remains in tremendous peril.

Closures continue to blight the sector; about 3,000 pubs have shut in the past six years, including 509 in 2023, according to the British Beer & Pub Association.

The battle against HIV received a boost after GSK reported data showing one of its drugs can be taken as little as three times a year.

ViiV Healthcare, the company’s HIV medicine arm, said a clinical trial of a new formulation of its long-acting treatment Cabotegravir had shown it could be taken ‘at least’ once every four months to provide protection against infection.

This is in stark contrast to most HIV prevention treatments, which require users to take tablets every day to protect themselves from the virus.

Lloyd’s of London insurer Hiscox posted a record annual profit, as rising interest rates and strength in its commercial business helped offset claims inflation and the effect of currency swings.

The London-listed company, which underwrites a range of risks from natural catastrophes to cyber attacks to kidnappings and art theft, said on Tuesday profit before tax for 2023 rose to $625.9million from $275.6 million a year earlier.

Net insurance contract written premium for 2023 climbed 10.7 per cent to $3.56 billion.

Hiscox said retail outlook for 2024 was positive.

Matt Britzman, equity analyst, Hargreaves Lansdown:

‘Greggs continues to show why it’s the UK’s leading food-to-go brand (YouGov’s Brand Index). This is a business intent on growing, aiming to surpass 3,000 UK shops while enhancing its multi-channel approach for better service.

‘Digital channels are booming, with delivery sales up 23.6% last year following partnerships with Just Eat and Uber Eats. Greggs is extending hours to capture more of the evening market and bolstering its brand to both deepen loyalty and attract new customers.

‘Greggs is far more than just a treat, and its value offering puts it in a sweet spot with consumers still battling higher living costs. Maintaining that price point is key, and with cost inflation easing Greggs is making sure customers feel the benefit too. That’s likely to be a small drag on sales growth this year compared to last, but there are plenty of other growth avenues to target.

‘Investors don’t have to sit and wait while the growth strategy plays out. Greggs already boast a modest 2.6% forward yield and today’s special dividend is further evidence that the board’s keen to pay investors while it expands.’

Global office rental firm IWG’s annual core profits rocketed 34 per cent last year, buoyed by increased demand for its flexible working spaces and pricing strength.

The London-listed owner of the Spaces and Regus brands said core profit came in at £403million for the year to 31 December, beating market expectations of a £398million return.

Boss Mark Dixon said:

‘We enter 2024 continuing our momentum from 2023 as we continue to grow our customer base, our global partnerships and our best-in-class network.

‘While 2023 was a record year for both revenue and network size, we continue to see significant growth potential. With 1.2 billion white-collar workers globally and a potential audience valued at more than $2 trillion, there is substantial room for growth and as a company, we have a laser-like focus on capturing more of this market over the coming months and years.’

Bitcoin and gold raced towards record highs as investors bet on interest rate cuts this summer.

US-based communications equipment firm Viavi Solutions has agreed to buy British telecommunications testing firm Spirent Communications in a deal valued at about £1billion.

Spirent shareholders will get 175p per share, reflecting a 61.4 per cent premium to the firm’s closing share price on Monday.

Eric Updyke, Spirent CEO, said:

‘Spirent has undergone a period of significant transformation and growth over recent years and I am proud of the significant progress we have made, thanks to the efforts and commitment of our people. We have evolved our offering and routes to market to focus more on high-quality, high-growth, software-centric solutions and have become a mission critical partner to our customers in a more complex and digitised world.

‘More recently, however, we have endured significant challenges due to the macro backdrop and the impact of this on our core end markets. These conditions are likely to continue for some time.

‘Combining with the Viavi Group brings together a highly complementary product offering which can be marketed globally. It will enable Spirent to build on the strategic progress we have made to date, with a partner that has the scale and resources to capitalise on the long-term growth opportunities ahead. The combination of the Viavi Group and the Spirent Group creates a stronger business that will be better able to compete in what remains a challenging market environment and we are confident in the opportunities this will bring for many of our stakeholders.’

KPMG has been fined £1.5million over ‘basic failings’ in its audit of advertising firm M&C Saatchi that emerged following an accounting fiasco in 2019.

Adrian Wilcox, a KPMG partner, was also fined £48,750 as a result of an investigation by the Financial Reporting Council (FRC), which regulates the accounting industry.

Greggs expects further earnings growth in 2024 after underlying pre-tax profits came in 13 per cent higher at £168million for last year, lifted by extending its opening hours into the evening and expanding in food delivery.

The group famed for its sausage rolls posted underlying sales growth of 13.7 per cent for the year, and said a five year plan to double sales by 2026 was on track and it continued to target 3,000 outlets.

It opened 220 new stores in 2023 bringing its estate to 2,473.

Boss Roisin Currie said:

‘Reflecting on another year of rapid growth, I am so proud of how our teams have risen to the challenge of serving more customers through more channels.

‘Whether in our shops, our manufacturing sites, our distribution network, or in Greggs House, our teams stepped up to make sure that we kept pace with the increased customer demand as we delivered on our strategic growth plan.

‘We are very much on track to deliver our bold five-year growth plan to double sales by 2026 and to have significantly more than 3,000 shops in the UK over the longer term.’