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What to watch: Lockdown lifts Dunelm homeware sales, Redrow dividend, Heineken job cull

Tom Belger
·Finance and policy reporter
·4-min read
A Dunelm store in St Albans, Britain. Photo: Peter Cziborra/Reuters
A Dunelm store in St Albans, Britain. Photo: Peter Cziborra/Reuters

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

Dunelm leaps on surging lockdown homeware sales

Home furnishings retailer Dunelm (DNLM.L) shares leapt on its interim results on Wednesday, as it recorded surging sales during Britain’s coronavirus lockdown last year.

Total sales leapt 23% year-on-year to £719.4m ($995.8m) in the final six months of 2020. Pretax profits were up 34.4% to £112.4m.

Digital sales more than doubled with stores forced to close by lockdown restrictions for parts of the period and more customers looking to spruce up their homes.

B&Q and Screwfix also reported rising sales last month. Thierry Garnier, CEO of parent group Kingfisher, said the public were spending “more time in their homes and focused on improving them.”

Redrow resumes dividends after ‘intensive activity’

Housebuilder Redrow (RDW.L) has reinstated its dividend, with shareholders set to reap the rewards of surging sales fuelled by the pandemic and property tax cuts.

The developer saw group revenue and new-build completions in the second half of 2020 surge 20%, with revenues of £1.04bn. It announced a 6p per share interim dividend as it reported first-half profits of £174m, up 11% year-on-year.

Matthew Pratt, group chief executive, said he was pleased it had retained its five-star customer service rating “during a period of intensive activity” amid the pandemic.

“We have seen a strong sales market during the first half driven by a combination of pent-up demand from the first national lockdown, the introduction of the stamp duty holiday and the impending end of the Help to Buy scheme for existing homeowners,” he said.

But it highlighted the impact of the pandemic on sub-contractors, with UK construction sites remaining open throughout lockdowns despite safety concerns last year. “There has been some impact on build as an increasing number of subcontractor colleagues are unable to work whilst self isolating.”

Shares slipped 2.6% in early trading in London.

Heineken to slash 8,000 jobs as pandemic hits sales

Dutch brewer Heineken (HEIA.AS) said it will cut around 8,000 jobs as part of an organisational restructure, through which it hopes to make €2bn (£1.8bn, $2.4bn) gross savings by 2023. That’s almost 10% of the firm’s 85,000 employees.

The company’s shares ticked down 1.8% in Amsterdam on Wednesday morning. The reduction in headcount will save around €350m, but with an initial restructuring charge of €420m.

The company said the timelines of restructuring will vary depending on the specific circumstances of its local operations, including a reduction of the personnel costs at the head-office “by a run-rate of about 20%” to be implemented at the end of the first quarter of 2021.

Meanwhile, the economic fallout of the coronavirus pandemic, with restaurants and pubs closed in many countries for long periods of time, hit the company’s revenue last year, as it swung to a loss in 2020.

The company posted a net loss of €204m for the year, down from €2.2bn profit year-on-year. Revenue fell 17% to €23.8bn. Heineken’s beer volumes sold shrank 8.1%.

WATCH: Biden discusses relief plan with CEOs

Stocks rise as US and China inflation data comes into focus

European stocks opened higher on Wednesday, after Asian and emerging markets hit record highs earlier in the session.

US president Joe Biden’s stimulus plans continued to boost confidence, while concerns over monetary tightening in China eased as figures showed new bank loans hitting a new high.

Inflation data was in focus on Wednesday in the world’s two largest economies.

Producer price index data in China showed a 0.3% rise in prices year-on-year, higher than expected and the largest growth since May 2019. Investors welcomed the gains as a signal of the manufacturing sector’s recovery.

Meanwhile consumer price index data in the US later in the day was expected to show inflation ticking higher, from 1.4% year-on-year in December to 1.5% in January.

Britain’s FTSE 100 rose 0.3%, and France’s CAC 40 (^FCHI) and the Europe-wide Stoxx 600 (^STOXX) were up 0.2%. Germany’s DAX (^GDAXI) opened flat, however, as chancellor Angela Merkel was reported to have warned lockdown restrictions would last into March.

Stocks had rallied in Asia overnight. The Chinese inflation data lifted the blue-chip CSI 300 (000300.SS) 2.1% to its highest level since 2007. The Shenzhen Component (399001.SZ) also rose 2.1% in the final trading day before the Lunar New Year holiday, and the SSE Composite index (000001.SS) gained 1.4%.

Japan’s Nikkei rose 0.2% after strong earnings reports from carmakers Toyota and Honda, while MSCI's broadest index of Asia-Pacific shares outside Japan rose 0.9% to a record high.

Stocks in the US looked set for gains after ending Tuesday’s session close to flat. S&P 500 futures (ES=F) were up 0.4% as trading began in Europe, Dow Jones futures (YM=F) rose 0.2%, while futures on the Nasdaq (NQ=F) were up 0.5%.