What to watch: Legal & General profits fall, $1.2bn loss for Tullow Oil, and Foxtons narrows losses

Oscar Williams-Grut
·Senior City Correspondent, Yahoo Finance UK
·6 min read
General view of a sign at the offices of Legal and General, in Kingswood, Surrey.
General view of a sign at the offices of Legal and General, in Kingswood, Surrey. Photo: PA

Here are the top business, market, and economic stories you should be watching today in the UK, Europe, and abroad:

Legal & General profits fall

Insurance giant Legal & General (L&G) (LGEN.L) has posted lower profits due to a slowdown in housebuilding and lower life insurance demand during the pandemic.

The FTSE 100 company said operating profits dipped 3% to £2.2bn ($3bn) for 2020. The company said it remains on track to meet its five-year growth ambitions despite the impact of COVID-19.

Chief executive Nigel Wilson called it "a robust and resilient performance."

“Our balance sheet remains strong and trading remains consistent with delivering our growth ambitions which are supported by six long-term growth drivers," he said.

Shares rose 0.6%.

$1.2bn loss for Tullow Oil

Shares in Tullow Oil (TLW.L) rallied on Wednesday morning even as the company posted a $1.2bn (£860m) loss.

The huge post-tax loss was driven by write-offs on explorations and impairment charges. Chief executive Rahul Dhir said the business was now "executing a robust, cash generative business plan which is focused on our most productive assets."

Dhir said the business was "well placed to benefit from higher oil prices" and forecast operating cashflow of $500m in 2021 with oil prices averaging $50 per barrel.

Tullow said it had also secured a $1.7bn borrowing facility after talks with lenders.

Shares rose 4%.

Foxtons narrows losses

Estate agent Foxtons (FOXT.L) managed to narrow losses last year even as revenue fell.

Foxtons said it made a pre-tax loss of £1.4m last year, compared to a loss of £8.8m in 2019. The improvement came despite a 12% fall in revenue to £93.5m.

Foxtons said the performance was driven by slashing costs and leaning on government support. The estate agent cut £15.9m of operating costs last year and the business furloughed 750 staff at the start of the pandemic last year. The business also benefited from £2.5m in business rates relief.

"2021 has got off to a strong start, with further improvement in financial performance and the acquisition of Douglas & Gordon demonstrating the continued progress against our acquisition and growth strategy," chief executive Nic Budden said in a statement.

"The March 2021 budget announcement, which brought more certainty for our customers, and the rollout of the mass vaccination programme is expected to result in higher volumes in the residential sales market which, with our expertise and results focused proposition, we are well placed to benefit from."

Shares rose 2%.

ITV shares under pressure after Morgan departure

Shares in broadcaster ITV (ITV.L) fell on Wednesday morning, seemingly in connection with the departure of morning show anchor Piers Morgan.

ITV shares fell as much as 4% on Wednesday and were still down 3% in London by 9.50am.

The slump followed news on Tuesday night that Piers Morgan would depart ITV's flagship breakfast programme Good Morning Britain (GMB) over comments he made about Meghan Markle.

Neil Wilson, chief market analyst at Markets.com, said ITV's early share price weakness could be linked to Morgan's departure.

"Are they down because of this event or just amid his departure?" he said. "Investors may be a little worried about the loss of ratings for GMB – it wasn’t exactly doing that well before he joined and its primetime slot will have repercussions for ads. Love or loathe, Morgan boosted ratings.

"It could also be that investors are worried about an investigation over comments made by Morgan on air."

Record sales at Lego

With people forced to spend more time at home, many reached out to Lego to keep themselves entertained.

The Danish company posted record 2020 sales on Wednesday. It managed to grow its revenue by 13% year-on-year to DKK43.7 bn (£5bn, $7bn) while consumer sales grew 21%. Sales were up 13% to DKK43.7bn, which according to Bloomberg is the most the company has ever brought in during a single year.

Operating profit was DKK12.9bn, an increase of 19% compared with 2019. Net profit also grew 19%, to DKK 9.9bn.

Apple to invest €1bn in Germany

Apple (AAPL) has announced plans to invest €1bn (£860m, $1.2bn)over the next three years building a new campus and development hub in Munich, Germany.

The technology giant said in a statement on Wednesday that it planned to create a new "European Silicon Design Center" in the Bavarian capital that will focus on 5G technology and the future of wireless.

Apple first opened an office in Munich in 1981 and already employs 1,500 people in the south German city, making it Apple's largest engineering hub in Europe. The iPhone maker said the investment plans announced on Wednesday would add hundreds of new jobs.

Adidas weather pandemic

Adidas' (ADS.DE) operating profit took a slight hit in 2020 due to the pandemic and store closures, but sales ticked up with 53% boost online. The company has decided to resume dividend payments.

Its share price was up roughly 1% on Wednesday morning.

Fourth-quarter sales rose a currency-neutral 1% to €5.6bn euros (£4.8bn, $6.6bn), while operating profit slipped to €225m from €245m in 2019.

The company said its global store opening rate currently standing at above 95%, and it expects a "strong top-line recovery in 2021." Sales are expected to increase at a mid- to high-teens rate on a currency-neutral basis.

Just Eat sales surge in lockdown

Lockdowns around the world have been a boon for food delivery business Just Eat Takeaway (JET.L).

The takeaway platform posted a huge jump in annual sales on Wednesday, saying revenues rose by 54% to €2.4bn (£2bn, $2.8bn). The surge was driver by an increase in the number of returning customers, a higher number of average orders from each customer, and a higher average order value.

Adjusted earnings rose 18% go €256m but the company made a bottomline pre-tax loss of €151m. Just Eat Takeaway said the loss was driven by €102m of costs connected with last year's merger and the proposed takeover of GrubHub, a deal that was announced last June.

Wagamama-owner asks investors for £175m

Wagamama-owner The Restaurant Group (RTN.L) swung to a loss last year as revenue took a major hit amid the pandemic.

The company’s total revenue for 2020 was down 57% to £459.8m and adjusted losses before tax were £87.5m, down from a profit of £74.5m in 2019.

The company has managed to raise £175m ($243m) of capital and is optimistic about 2021, as lockdown restrictions are meant to ease.

Shares were up about 5% Wednesday morning.

The company, which also owns Frankie & Benny’s, Chiquito, and dozens of pubs, earlier announced it had secured £500m of new debt facilities in place.

Stock markets wait for US inflation data

Investors will be watching US inflation data closely later for signs that huge stimulus could push up prices.

European markets were mixed on Wednesday after a tech rally on Wall Street failed to translate into broader appetite for equities.

The FTSE 100 (^FTSE) was down 0.2% by mid-morning in London, while the CAC 40 (^FCHI) was up 0.4% in Paris and the DAX (^GDAXI) was up 0.6% in Frankfurt.

Wall Street had enjoyed a surge in tech stocks overnight. The tech-heavy Nasdaq (^IXIC) closed up 3.8% on Tuesday and Tesla (TSLA) rose close to 20% to record its best day since February 2020.

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