Britvic rejects takeover proposals from Carlsberg
Newsflash: soft drinks maker Britvic has rejected two takeover approaches from Danish brewer Carlsberg.
Britvic has turned down an offer of £12.50 pence per share this week, which would value it at £3.1bn, having already rejected an initial proposal of £12 from Carlsberg earlier this month
Britvic told the City this morning:
The Board together with its advisers carefully considered the Second Proposal, and concluded that it significantly undervalues Britvic, and its current and future prospects. Accordingly, the Board unanimously rejected the Second Proposal on 17 June 2024.
Shares in Britvic have jumped by 15% this morning, to £11.69.
Carlsberg has confirmed it has made two approaches, and points out that the £12.50/share offer is a 29% premium to Britvic’s closing share price on Wednesday.
Carlsberg says it is considering its position, and says:
Carlsberg believes that the Proposal represents a compelling opportunity for Britvic shareholders to realise their investment in full in cash at an attractive valuation.
Updated at 08.20 BST
Could the Taylor Swift effect be boosting clothing sales?
Could the jump in clothes shopping last month have anything to do with Taylor Swift’s Eras Tour, which began this month and runs until August?
Kathleen Brooks, research director at XTB, suspects Swifties have been snapping up new outfits ready for the concerts.
She writes:
UK retail sales surged last month, and core retail sales that exclude auto fuel rose at a 1.2% annualized pace in May, after falling by 2.5% in April. The ONS said that sales rebounded after a wet April, and sales volumes grew across most sectors, with clothing and furniture sales rebounding strongly.
Could this be the Taylor Swift effect, with people (including myself) splurging on new outfits ahead of her era’s tour, the UK leg of which is set to add £1 billion to the UK economy?
There is no denying that today’s retail sales report paints a positive picture for the UK consumer, Brooke adds:
Non -food store sales rose by 3.5% in May, the highest level since April 2021, and online sales surged by 5.9%, the highest monthly increase since April 2022.
The ONS did caveat the boost to sales compared to a year ago, by reminding us that last May there was an extra bank holiday for the King’s Coronation. However, after a slump at the end of spring, the consumer looks to be back as the UK finally moves towards summer.
Updated at 08.03 BST
With inflation falling back to target and consumer confidence improving, UK retail sales may well continue to strengthen, predicts Capital Economics:
The 2.9% m/m increase in retail sales volumes in May fully reversed the 1.8% m/m drop in April (revised up from -2.3%) as rainfall fell back more in line with seasonal norms.
Indeed, the increase on the month was supported by a 5.4% m/m increase in clothing sales. But the strength was broad-based across the retail sector including online (+5.9% m/m) suggesting an underlying strengthening in sales beyond weather effects.
Updated at 07.54 BST
Online clothes shopping is finally recovering, after a slump, reports Tom Youldon, partner at McKinsey & Company.
He says UK retail sales have “bounced back” in May (see intro for the details), and suggests the Euros could support spending.
With inflation down to the Bank’s 2% target, consumer confidence at the highest level since November 2021 and a 2.9% increase in retail sales volumes, consumer activity is picking up.
“In particular, online trading in apparel is finally recovering, with textile, clothing and footwear online sales rising 9.8%. Activity was likely boosted by the May bank holidays and some willingness from shoppers to splurge on discretionary goods. Although sales volumes overall still remain slightly below pre-COVID-19 levels.
“As we head into warmer months, retailers will be hopeful that falling inflation and rising wages will act as a further boost to GfK’s measure of consumer confidence. And that a combination of drier, sunnier weather, big sporting events like UEFA Euro 2024 and summer holiday purchases encourage greater spending at the tills.
England’s performance yesterday could easily have boosted demand for headache pills, for starters….
Updated at 07.52 BST
The UK public finances report shows that central government’s receipts rose by £1bn in May, year-on-year, to £76.8bn.
That includes a £2bn rise in tax receipts, lifted by increased Income Tax, Corporation Tax and Value Added Tax (VAT) receipts.
But compulsory social contributions fell by £900m, due to the cuts to the main rates of National Insurance.
Updated at 07.34 BST
UK national debt highest since 1960s
The latest public finances data shows that the UK’s net debt as a percentage of GDP remains at levels last seen in the early 1960s.
The ONS reported this morning that public sector net debt excluding public sector banks was provisionally estimated at 99.8% of gross domestic product (GDP) at the end of May.
That’s 3.7 percentage points higher than a year ago.
In historic terms, it’s a level last seen in 1961, when Harold Macmillan was prime minister and the UK was paying off the debt incurred in the second world war.
As flagged in the introduction, the UK borrowed another £15bn in May. Although that’s £800m more than a year ago, it’s £600m lower than forecast by the Office for Budget Responsibility.
Updated at 07.32 BST
UK consumer sentiment highest since November 2021
British consumer sentiment has risen to a two-and-a-half year high this month, market research company GfK reports this morning.
The GfK consumer confidence survey has risen to -14 in June, up from from May’s -17, the highest reading since November 2021.
That may well have fed through to the increased retail sales spending last month.
The survey found that households have a more optimistic view of the economic situation over the last 12 months, and the outlook for the next year.
However, people grew gloomier about their own personal finances, highlighting that times are tough even though inflation has fallen back to 2%.
Joe Staton, client strategy director at GfK, explains:
Those measures on the economy registered sharp increases of seven points and six points respectively, and there was a welcome three-point boost in intentions to make major purchases.
While June’s reading of -14 is the third month in a row that confidence has increased, the headline score remains negative owing to the difficulties so many have experienced as the unrelenting cost-of-living crisis batters household budgets.
Updated at 07.23 BST
Introduction: UK retail sales rally in warm May
Good morning, and welcome to our rolling coverage of business, the financial markets and the world economy.
Today we will be digesting the final slug of significant economic data ahead of the UK general election, which have just been released.
The latest retail sales figures show that consumer spending picked up last month, while new borrowing statistics are casting a light on the public finances.
May’s retail sales stats show that sales volumes rebounded in May, after a slump in April when bad weather drove shoppers from the high street. That’s rather stronger than the 1.5% rise forecast by City economists.
Retail sales volumes jumped by 2.9% in May 2024, following a fall of 1.8% in April, the Office for National Statistics reports.
The ONS says:
Sales volumes rose across most sectors, with clothing retailers and furniture stores rebounding following poor weather in April.
Last month was the warmest May on record, in a series going back to 1884, according to the Met Office.
More broadly, sales volumes rose by 1.0% in the three months to May 2024 when compared with the previous three months, the ONS adds.
Retail sales volumes rose across all main sectors, the ONS says.
The biggest growth was seen among “non-store retailers”, such as online shops, where volumes jumped by 5.9% on the month.
At department stores, clothing outlets, household goods sellers, and other non-food stores, volumes rose by 3.5% in May.
These increases suggest people feel more confident about economic conditions – as shown by the latest poll of consumer confidence from GfK. But while that may bolster Rishi Sunak’s claim that the economy is turning the corner, this isn’t providing the PM with a poll boost….
The public finances, meanwhile, show that the UK borrowed £15bn in May to cover the difference between governent spending and income. That’s a little lower than forecast, but £800m more than in May 2023.
It’s the third highest May borrowing since monthly records began in 1993.
The agenda
7am BST: UK public finances for May
7am BST: UK retail sales for May
9am BST: Eurozone flash PMI survey for June
9.30am BST: Eurozone flash PMI survey for June
2.45pm BST: US flash PMI survey for June
3pm BST: US existing home sales for May
Updated at 07.26 BST
UK retail sales rebound in warm May as consumer confidence improves – business live | Business #retail #sales #rebound #warm #consumer #confidence #improves #business #live #Business
Source Link: https://amp.theguardian.com/business/live/2024/jun/21/uk-retail-sales-rebound-may-consumer-confidence-public-finances-business-live
UK retail sales rebound in warm May as consumer confidence improves – business live | Business:
08.20 BSTBritvic rejects takeover proposals from Carlsberg Photograph: Frank Baron/The GuardianNewsf…
