John Lewis Partnership halves losses; OpenAI’s valuation ‘set to hit $150bn’ – business live | Business
Introduction: John Lewis Partnership narrows losses
Good morning, and welcome to our rolling coverage of business, the financial markets and the world economy.
The JohnLewisPartnership has declared it is on track to deliver “significantly higher profit” this financial year, as it tries to put a troubled period behind it.
In its latest financial results, JohnLewis has reported that its losses halved in the first half of its financial year.
The company, which owns Waitrose as well as the John Lewis department stores, has made a pre-tax loss of £30m in the six months to 27 July, down from £59m a year earlier.
Strip out ‘exceptional items’, such as the cost of strategic restructuring and redundancy programmes, and losses are down by 91% to just £5m.
Nish Kankiwala, CEO of the JohnLewisPartnership, says the company has achieved a “marked improvement” compared with two years ago.
These results confirm that our transformation plan is working and we expect profits to grow significantly for the full year, a marked improvement from where we were two years ago.
We continue to invest heavily in quality, service and value, and customers are responding well - with more people shopping with us and customer satisfaction increasing. While we have much more to do, we’re well set up for a positive peak trading period and on target to significantly improve our performance for the full year.”
Looking across the company, Waitrose grew its sales by 5% in the first half of the year, but sales at its John Lewis department stores fell 3% – blamed on “a slower external environment for general merchandise”.
John Lewis returned to profit in the last financial year (to late January) after three years of losses.
Kankiwala says:
While we have much more to do, we’re well set up for a positive peak trading period and on target to significantly improve our performance for the full year.
The company is hoping that bringing back its “never knowingly undersold” price promise will help it win sales in the crucial Christmas period approaching soon…
The agenda
This morning: Chancellor Rachel Reeves to meet with UK bank bosses
9.30am BST: UK’s Office for Budget Responsibility to release its OBR Fiscal Risks and Sustainability Report
1.15pm BST: European Central Bank interest rate decision
1.30pm BST: US weekly jobless claims
1.45pm BST: European Central Bank press conference
Key events
Retail analyst NickBubb has dug into John Lewis’s results, and reports:
We are delighted that JLP has at last gone back to its previous policy of allocating central and property costs against the two Divisions, so that the operating profit splits are now much more realistic.
We are, however, very surprised that Waitrose was much less profitable than we thought on this basis last year and that John Lewis was therefore much more profitable than we’d thought: the adjusted operating margin at John Lewis of 1.7% last year (on ex-VAT sales) was actually higher than the 1.5% achieved by Waitrose (despite its H2 recovery.
John Lewis: Profits should be "significantly" over £42m this year
John Lewis points out that it has historically delivered the majority of its profits in the second half of the year.
The company says:
As a result, we are confident that full year pre-exceptional profits should be significantly above the £42m we reported in 2023/24.
The stronger second-half performance is thanks to the Christmas sales boom (memorably driven by Monty the Penguin a decade ago), and the new year sales.
Today’s John Lewis results are the final set before chair Sharon White hands over the reins to her successor, Jason Tarry, the former UK boss of Tesco.
On White’s watch, John Lewis has been investing in refurbishing its stores – it will soon complete this work at its sites at Oxford Street, High Wycombe and Cheadle; and nine Waitrose stores.
It is also opening of a new convenience store in Hampton Hill in London soon.
OpenAI's valuation set to "hit $150bn" in new funding round
The value of artificial intelligence pioneer OpenAI appears to have almost doubled, according to reports, as the company seeks fresh resources in a new funding round.
Bloomberg reports that OpenAI – the organisation behind the ChatGPT chatbot and and the SearchGPT prototype – is in talks to raise $6.5bn from investors at a valuation of $150bn (£115bn).
The new valuation is significantly higher than the $86bn valuation achieved in a tender offer earlier this year, confirming OpenAI as one of the most valuable startups in the world.
It’s the latest sign that OpenAI has put last year’s boardroom disruption, which saw CEO Sam Altman fired and then rehired a few days later, behind it.
The increased valuation has been achieved despite concerns that the artificial intelligence bubble may have burst – given recent declines in tech share prices.
Introduction: John Lewis Partnership narrows losses
Good morning, and welcome to our rolling coverage of business, the financial markets and the world economy.
The JohnLewisPartnership has declared it is on track to deliver “significantly higher profit” this financial year, as it tries to put a troubled period behind it.
In its latest financial results, JohnLewis has reported that its losses halved in the first half of its financial year.
The company, which owns Waitrose as well as the John Lewis department stores, has made a pre-tax loss of £30m in the six months to 27 July, down from £59m a year earlier.
Strip out ‘exceptional items’, such as the cost of strategic restructuring and redundancy programmes, and losses are down by 91% to just £5m.
Nish Kankiwala, CEO of the JohnLewisPartnership, says the company has achieved a “marked improvement” compared with two years ago.
These results confirm that our transformation plan is working and we expect profits to grow significantly for the full year, a marked improvement from where we were two years ago.
We continue to invest heavily in quality, service and value, and customers are responding well - with more people shopping with us and customer satisfaction increasing. While we have much more to do, we’re well set up for a positive peak trading period and on target to significantly improve our performance for the full year.”
Looking across the company, Waitrose grew its sales by 5% in the first half of the year, but sales at its John Lewis department stores fell 3% – blamed on “a slower external environment for general merchandise”.
John Lewis returned to profit in the last financial year (to late January) after three years of losses.
Kankiwala says:
While we have much more to do, we’re well set up for a positive peak trading period and on target to significantly improve our performance for the full year.
The company is hoping that bringing back its “never knowingly undersold” price promise will help it win sales in the crucial Christmas period approaching soon…
The agenda
This morning: Chancellor Rachel Reeves to meet with UK bank bosses
9.30am BST: UK’s Office for Budget Responsibility to release its OBR Fiscal Risks and Sustainability Report
1.15pm BST: European Central Bank interest rate decision
1.30pm BST: US weekly jobless claims
1.45pm BST: European Central Bank press conference
