What to Watch: Peppa Pig-owner's loses mount, Quiz sales slide, and TP ICAP fined
Here are the top business, market, and economic stories you should be watching today in the UK, Europe, and abroad:
Peppa Pig-owner's loses mount
Entertainment One (ETO.L), the company behind Peppa Pig, has reported mounting loses ahead of a planned £3.3bn takeover by US toymaker Hasbro.
Entertainment One lost £43.9m in the three months to 30 June, compared to a £6.8m loss in the same period a year earlier. Sales also fell by 7% to £173.1m, driven by a decline in film, television, and music revenues.
The company said said Peppa Pig, which has just celebrated its fifteenth anniversary, has “maintained its momentum.”
Quiz sales slide
Fast fashion retailer Quiz (QUIZ.L) has warned conditions on the high street are “very challenging” as it reporting falling revenues in the six months to September.
Sales fell 5% to £63.3m, although online revenues rose by 7% to £20m.
“Overall, the group’s trading performance in the first half has been broadly in line with the board’s expectations despite the difficult UK trading environment,” Tarak Ramzan, chief executive officer of Quiz, said.
“Whilst trading conditions are expected to remain challenging in the near term, the board remains confident that underpinned by Quiz’s flexible business model and an increasing online focus, the group can return to sustainable profitable growth in the medium term.”
TP ICAP fined
Broker TP ICAP (TCAP.L) has been fined £15.4m by the Financial Conduct Authority (FCA) over failing to properly control its traders.
The charges related to so-called “wash trades” made between 2008 and 2011, where the same party takes both sides of a trade. “Wash trades” serve no purpose as there is no change in ownership but they generate fees for the broker.
“We are pleased to put this historical matter behind us,” TP ICAP CEO Nicolas Breteau said. “None of the individuals involved in the relevant broking activities remain with our firm, which has long since taken the opportunity to significantly enhance its systems and controls to comply with regulatory expectations.
Mark Steward, executive director of enforcement and market oversight at the FCA, said: “The case against Tullett Prebon was a long and complex one. The firm’s failure to be open with the FCA about the existence of key evidence reflected a high degree of culpable incompetence and prejudiced the FCA enquiries.”
Oil price spikes on tanker attack
The price of oil spiked on Friday after reports of an attack on an Iranian oil tanker.
Iran’s Tasnim News Agency said on Twitter on Friday that a vessel belonging to the National Iranian Tankers Company (NITC) caught fire in the Red Sea near Saudi Arabia after being hit by two rockets. Tasnim said all crew were safe, the ship was stable, and oil leaking from the tanker had been stopped around 40 minutes after reporting the incident.
Shana, the news agency of Iran’s oil ministry, denied the attack, saying “the tanker in question was completely stable.”
News of the attack sent the price of oil higher. Brent futures (BZ=F) were up 2.1% to $60.35 at just after 9am UK time, while crude futures (CL=F) were up 1.9% to $54.59.
Facebook’s £28m UK tax bill
Facebook’s UK company paid just £28m in taxes in 2018, even though its revenue surged by more than 30% to £1.6bn.
New accounts filed by the company show that it made only £96.6m in pre-tax profits, largely because it paid more than £666m in unexplained “administrative expenses” and nearly £860m in sales costs.
That means that only about 6% of its gross revenue, which mainly comes from advertisers, was converted into taxable profits.
Net revenue from advertisers at Facebook UK climbed by more than 50%, to £797m.
Heathrow to go carbon neutral
Heathrow Airport said on Friday that it was committed to achieving net zero emissions and that it was hoping to quickly decarbonise its airport operations.
The announcement came soon after its largest operator, British Airways, became the first airline to say it would be carbon neutral by 2050.
The airline’s parent company, IAG (IAG.L), said on Thursday that it would offset all emissions from domestic flights in the UK from next year.
“IAG’s announcement of net zero emissions from flight by 2050 shows that the aviation sector as a whole can decarbonise and protect the benefits of global travel and trade,” said Heathrow CEO John Holland-Kaye on Friday.
Dyson scraps electric car project
Vacuum cleaner billionaire Sir James Dyson has scrapped ambitious plans to build a new electric car, saying he “simply can no longer see a way to make it commercially viable.”
Dyson announced it was abandoning the project in an email to staff on Thursday, seen by Yahoo Finance UK. The email, written by founder Sir James Dyson, said the automotive team had developed “a fantastic car” but the vehicle was unlikely to make money. As a result, the company had been trying to sell the division but was unable to find a buyer.
“The Dyson Board has therefore taken the very difficult decision to propose the closure of our automotive project,” Dyson wrote.
The billionaire entrepreneur said the effort was “not a failure”. He told Dyson’s 4,500 staff that “most” of the 523 employees working on the electric car project would be redeployed elsewhere in the company.
Markets rally
European markets were rising on Friday, buoyed by US President Donald Trump’s claim that the first day of trade talks with China went well.
“As we head into the weekend European markets look set to build on the gains seen in US and Asia markets, with the DAX opening at its best levels in over a week,” said Michael Hewson, chief market analyst at CMC Markets, said. “The FTSE100 is lagging behind, largely as a result of the surge higher in the value of the pound, though Brexit sensitive stocks like Lloyds, RBS as well Taylor Wimpey, Barratt Developments and Tesco, all helping support the index.”
Britain’s FTSE 100 (^FTSE) was up by 0.3%, while France’s CAC 40 (^FCHI) was up by 1%, Germany’s DAX (^GDAXI) was up by 1.7%, and the Euronext 100 (^N100) was up by 0.9%.
Overnight in Asia, Japan’s Nikkei (^N225) closed up by 1.1%, the Hong Kong Hang Seng Index (^HSI) was up by 2.3%, and China’s Shanghai Composite (000001.SS) was up by 0.8%
What to expect in the US
US stocks future are pointing to a strong open later today. S&P500 futures (ES=F) were up by 0.9%, Dow Jones futures (YM=F) were up by 0.8%, and Nasdaq futures (NQ=F) were up by 1%.
