What to watch: Bunzl among FTSE laggards, Dixons more than doubles sales during lockdown and pound gains on Brexit deal hopes

Kumutha Ramanathan
·Contributor
·4 min read
BUNZL logo on the side of a van in the City of London. Photo: John Stillwell/PA via Getty
BUNZL logo on the side of a van in the City of London. Photo: John Stillwell/PA via Getty

Here are the top business, market, and economic stories you should be watching today in the UK, Europe, and around the world.

Bunzl among FTSE laggards

International distribution and services group Bunzl (BNZL.L) bucked the wider FTSE (^FTSE) upward trend and headed lower on Wednesday as it reported that revenue in 2021 is expected to be lower than the current year. This is in contrast to its current reporting period, where it said it expected an 8% increase in group revenue for this year.

For its 2021 outlook, the business also said it is expecting “minimal benefit from larger COVID-19 related orders which have strongly supported the performance in 2020,” the company said in a reporting statement.

Shares were down around 4.6% at 9.30 am in London.

Bunzl shares sank as it announced 2021 revenue would be lower than the current year. Chart: Yahoo Finance
Bunzl shares sank as it announced 2021 revenue would be lower than the current year. Chart: Yahoo Finance

“Looking ahead, visibility remains limited on the future extent and duration of pandemic-related restrictions, the timing of the roll-out of vaccination programmes and the pandemic's macroeconomic impact,” said the company in a statement.

The company also said it has completed the purchase of Snelling, a Canadian business that brings to market cleaning products as well as industrial and foodservice packaging.

Dixons more than doubles sales during lockdown

Strong online sales for electricals helped Dixons Carphone (DC.L) thrive despite sluggish demand in shops caused by forced closures during COVID-19 lockdowns, the company reported on Wednesday in its latest earnings announcement.

Dixons shares reached a one-week high as it reported strong results on Wednesday. Chart: Yahoo Finance
Dixons shares reached a one-week high as it reported strong results on Wednesday. Chart: Yahoo Finance

The stock was up 12.7% at around 10am in London.

The British electricals giant, which owns Carphone Warehouse and Currys PC World in the UK and Ireland, said it made an adjusted pretax profit of £89m ($112m) in the six months to 31 October compared to £2m in the same period last year.

By adapting “quickly to overcome challenges of multiple lockdown,” the business said it had seen a 114% increase in online sales growth to £1.8bn. The UK and Ireland accounted for 145% of those gains, to £1.3bn.

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READ MORE: Surge in online sales key to Dixons overcoming COVID-19 pains

Pound gains as Brexit deal looks promising

The pound headed higher against the US dollar and the euro on Wednesday following promising signs that that Britain and the European Union (EU) are heading towards a Brexit trade deal.

European Commission president Ursula von der Leyen told MEPs that the next few days would be “decisive” in post-Brexit trade talks ahead of the 31 December deadline for the UK to transition out of the bloc.

She said: “As things stand, I cannot tell you whether there will be a deal or not. But I can tell you that there is a path to an agreement now. The path may be very narrow but it is there.”

Sterling was up 0.01% against the euro to €1.1073 (GBPEUR=X) and up 0.4% against the dollar to $1.3504 (GBPUSD=X).

COVID-19 vaccine optimism and US stimulus progress drive European stocks higher

European markets headed higher at the market open on Wednesday as progress on the roll out of COVID-19 vaccines globally and a US pandemic relief package spurred on optimism.

London’s FTSE (^FTSE) was up 0.7% at the market open. Germany’s DAX (^GDAXI) was higher by 0.8%, and France’s CAC 40 (^FCHI) gained 0.7%.

US futures also headed higher. The S&P 500 (ES=F) gained 0.2%, while the Dow (YM=F) tilted upward 0.2% and the Nasdaq (NQ=F) jumped 0.2%.

Following a two-day meeting, markets are also closely watching for a US Federal Reserve’s statement on its final interest rate decision for 2020 and how it will continue supporting the economy.

Asian markets were downcast at market close. Hong Kong’s Hang Seng (^HSI) gained 1%, and Japan’s Nikkei (^N225) was higher 0.3%. The Shanghai Composite (000001.SS) was almost flat.

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