BUSINESS LIVE: UK borrowing soars; Mobico to promote US college bus unit

Ford has abruptly cancelled plans to produce a three-row electric SUV, and has delayed building a new EV plant in Tennessee.

The pullback marks a major shift for the car company, amid tumbling demand for electric cars.

GlaxoSmithKline has been granted a fast-track approval process from the US watchdog for a lung cancer drug.

The US Food and Drug Administration (FDA) granted the pharma giant ‘breakthrough therapy designation’ for the drug, which is being developed with Chinese partner Hansoh Pharma.

NatWest is the latest bank to announce mortgage rate cuts for homeowners remortgaging.

The re-pricing follows on from HSBC, TSB and Barclays who all reduced mortgage rates yesterday.

Mobico Group shares soared on Wednesday after the travel business swung back to profit and announced the sale of its North American school bus division was underway.

The National Express owner revealed last October that it was considering the sale of the school bus arm in order to reduce debts and focus on operations with ‘higher return potential’.

Asda sales fell 6.4 per cent in the four weeks to 10 August and the group lost 1.3 percentage points of market share over the year, industry data claims.

Earlier this month, Asda reported a 5.3 per cent drop in second quarter sales and its chairman, Stuart Rose, told the Telegraph newspaper he was ’embarrassed’ by the group’s performance.

Business bosses are warning Sir Keir Starmer that Labour’s plans to bolster the power of trade unions could harm investment in Britain.

Under a planned overhaul of workers’ rights, Labour want to grant unions new rights of access to workplaces to recruit and organise members.

Waitrose plans to open 100 new convenience stores within the next five years, the John Lewis Partnership announced on Wednesday.

The 100 new smaller convenience-style stores form part of the group’s £1billion investment in new stores and refurbishments.

McDonald’s has pledged to breathe new life into British high streets by creating 24,000 new jobs across the UK and Ireland in over 200 new restaurants by 2028.

In its biggest expansion since 2002, the fast food chain has announced a £1billion investment with a view to ‘supporting successful high streets’, with customers likely to see an increase in smaller branches than they are used to.

Student homes and build-to-rent group Watkin Jones has warned it endured a ‘slower than expected’ summer market.

The firm lowered its annual profit guidance and said said ‘uncertainty’ over the pace of interest rate cuts will weigh on its full-year results.

Wilko will open another new store since it was taken over and rebranded following its dramatic collapse last year.

The retailer, which was bought rival budget retailer The Range last year, has announced plans to open a new store in Uxbridge, west London, this autumn.

The pound rose above $1.30 against the US dollar yesterday to hit its highest level in more than a year – in a boost for British holidaymakers.

Sterling has been buoyed by signs of improvement for the UK economy while the dollar is under pressure amid fears of a US slowdown.

The pound advanced to $1.3052 yesterday, its strongest since July last year. But it was flat against the euro at just over €1.17.

Waitrose plans to invest £1billion in new and existing shops over the next three years.

The chain, part of the employee-owned John Lewis Partnership, said it would open up to 100 convenience shops across the UK over the next five years. It currently trades from 329 stores and also trades online.

Waitrose lost some market share through the cost-of-living crisis, but industry data published in July showed it edged higher for the first time since January 2022.

It had a share of 4.5 per cent according to the latest data from market researcher Kantar that was published last week.

Two former bosses of failed department store chain BHS have been ordered to pay £110m to creditors.

Dominic Chappell, the former boss of BHS who bought it for £1 from Topshop tycoon Philip Green in 2015, and his former colleague Lennart Henningson must pay out after breaching their corporate duties.

Richard Hunter, head of markets at interactive investor:

‘Much higher than expected government borrowing in July, coupled with a multi-decade high on national debt, could conceivably presage a tough Budget to come.

‘Even so, the UK economy has displayed resilience which has surprised the doomsayers despite a brief and shallow recession earlier this year, and the more domestically focused FTSE250 has responded accordingly, having now risen by 6.8% in the year to date.‘

Adam Vettese, market analyst at eToro:

‘Mobico shares have been on the slide for some time now with a combination of the pandemic decimating travel demand and inflation driving costs higher. This morning’s update has seen profits spike up 28% and the company maintained their guidance for the year.

‘The focus now will be on cost cutting and deleveraging whilst cost-pressures begin to ease, and in turn Mobico will benefit from the inflation adjusted pricing in the second half.

‘Investors may be cautious about this being the beginning of a huge redemption story as there is still some fat to be trimmed with the company actively looking to dispose of its North American School Bus division.

‘Despite this, the update has been well received by the market albeit with no dividend to be paid still. Shares would have to appreciate over 50% to get back to their highest price of just this year and shares currently one eighth of the price of their pre-pandemic high.’

Watkin Jones shares have fallen sharply this morning after the property developer warned full-year profits would come in lower than previously anticipated.

The group said ‘overall market activity through the summer has been slower than anticipated’, which it blamed on ‘continued uncertainty over the pace of interest rate cuts’.

Watkin Jones shares are down more than 30 per cent as it said it was ‘unlikely that we will close any further transactions before the financial year end’.

National Express owner Mobico is hoping to sell its North America school buss business.

Mobico, which posted a 28.1 per cent jump in its first-half profit, is selling the unit as part of a debt-cutting programme set to be rolled out in the second half of this year.

The bus unit generated £1.12billion in revenue in 2023, while the group’s net debt at the end of June stood at £1.24billion.

Last year, Mobico suspended its dividend and decided not to pay an interim dividend.

Almost £1billion was wiped off the value of BT after a rival struck a major broadband deal.

Shares in the telecoms giant fell more than 6 per cent on the news that network provider CityFibre will partner with Sky next year.

The deal will see Sky rollout its broadband to those on CityFibre’s network, which serves nearly 4million homes.

British public borrowing was £3.1billion in July, according to the Office for National Statistic, smashing both official and City forecasts.

The Office for Budget Responsibility had pencilled in borrowing of just £100million for the month, while economists had predicted it would hit £1.5billion.