WH Smith hit by cyber atack involving ‘illegal access to some company data’ – business live

Books-to-stationery retailer WH Smith has been hit by a cyber attack.

WH Smith has told the City that a “cyber security incident” has resulted in illegal access to some company data, including current and former employee data.

WH Smith, which operates shops on the high street and at airports and railway stations, says it has immediately launched an investigation, engaged specialist support services and notified the relevant authorities.

WH Smith says that its customer accounts and databases are not affected, though.

In a statement to the City, it says:

WH Smith takes the issue of cyber security extremely seriously and investigations into the incident are ongoing. We are notifying all affected colleagues and have put measures in place to support them.

There has been no impact on the trading activities of the Group. Our website, customer accounts and underlying customer databases are on separate systems that are unaffected by this incident.

Such attacks are a growing problem for UK businesses, with a number of high profile hacks in recent weeks.

In January, Royal Mail was hit by a cyber incident which caused “severe service disruption” to international exports for almost six weeks.

Retailer JD Sports also warned in January that around 10 million people might have had their addresses, phone numbers and email addresses stolen in a cyber attack.

Just in: inflation across the euro area only eased slightly last month, as the cost of living squeeze continued to hit households.

Euro area annual inflation is expected to be 8.5% in February 2023, down from 8.6% in January according to a flash estimate from Eurostat.

That’s higher than expected – economists had forecast inflation would drop to 8.2% last month.

Households were hit by accelerating food price inflation, while energy prices eased slightly.

Eurostat says:

Food, alcohol & tobacco is expected to have the highest annual rate in February (15.0%, compared with 14.1% in January), followed by energy (13.7%, compared with 18.9% in January), non-energy industrial goods (6.8%, compared with 6.7% in January) and services (4.8%, compared with 4.4% in January).

Core inflation, which excludes energy, food, alcohol and tobacco, rose to 5.6% per year from 5.3% last month:

UK businesses are struggling to recruit workers, and plan to keep raising wages to attract staff, new data from the Bank of England shows.

The BoE’s last poll of Chief Financial Officers from small, medium and large UK businesses, found that recruitment difficulties started to rise again in February.

Around 45% of firms say they found recruitment ‘much harder’ than usual in February, up from 35% in January.

The Bank says:

In spite of ongoing recruitment challenges, realised employment growth remained strong at 4.3% in the three months to February, although the single month February data were weaker at 3.3%.

Companies expect to raise wages by 5.7% per year, the BoE says – or barely half January’s inflation rate of 10.1%. Over the last year, CFO’s say annual wages have risen by 6.6%.

Encouraging, companies expect to raise their own prices at a slower rate.

The report found that over the next year, businesses expected their output prices to increase by an average 5.4%, down 0.4% from January.

Company’s inflation expectations have also eased, the ‘Decision Makers Panel’ (DMP) found:

DMP members’ one-year ahead CPI inflation expectations decreased to 5.9%, down from 6.4% in January. Three-year ahead CPI inflation expectations also declined to 3.4% in February, from 3.7% in January.

Cost pressures continued to soften in February. Businesses reported that unit costs had grown by 9.8% in the year to February, down from 9.9% in January.

Overall business uncertainty continued to decline in February, with 53% of firms reporting that the overall level of uncertainty facing their business was high or very high, down from 57% last month.

CRH, the world’s largest building materials company, has revealed it plans to move its stock market listing from London to New York, in a new blow to the City.

CRH manufactures and distributes building materials and products for the construction industry.

In its results this morning, CRH says it has concluded that a US primary listing would bring “increased commercial, operational and acquisition opportunities”.

Currently, CRH generates around three-quarters of its profits, on an EBIDTA basis, in the US – helped by “significant increases in funding at both federal and state level”.

It believes this market will provide continued growth as American factories bring manufacturing back to the US, and as government infrastructure spending rises sharply, so having a primary listing in New York would boost commercial, operational and acquisition opportunities.

CRH tells shareholders this morning:

The US is expected to be a key driver of future growth for CRH and our exposure to this market is likely to increase further driven by substantial increases in infrastructure funding, a renewed drive for the onshoring of manufacturing activity and significant levels of under-build in the residential construction market.

Last May, plumbing and heating product make Ferguson shifted its primary listing to New York.

Gambling giant Flutter is also considering the move, and says this morning that early feedback from shareholders has been supportive.

It emerged earlier this week that oil giant Shell recently explored shifting its listing and headquarters to the US, in an attempt to lift its valuation towards those of US rivals.

CRH says it would remain headquartered, incorporated and tax-resident in Ireland, even if its does shift its primary stock market listing across the Atlantic.

Neil Wilson of Markets.com says CRH’s plans are ‘a bitter blow’ to the City, which has seen a swathe of companies snapped up in takeover bids in recent years.

The fact that world’s largest building materials company plans to abandon London for New York is a bitter blow for the former – just as it was revealed that Shell too thought about the move and Flutter looks to take a punt on the US.

About three-quarters of earnings for CRH derive from North America, – the move is pragmatic for the board but far more symbolic for the London Stock Exchange and the City. It’s a sign of decline and underlines the need to revitalise public markets in the UK. It’s not just companies moving listings abroad like Ferguson, it’s the huge slate of takeovers that has decimated corners of our markets due in large part to the weak pound and depressed UK valuations. Time for major change.

Think tank The Centre for Cities warns this morning that London is falling behind other international capitals, as red tape and years of underinvestment are hampering “superstar” businesses – more on that here.

The boss of gambling giant Flutter Entertainment has said he watched the Fifa World Cup final “through my fingers”, after paying out heavily to punters at the end of last year.

The tournament’s classic final game – which Argentina won on penalties after the match with France ended 3-3 – saw lots of payouts for goals for the gambling company, PA Media report.

Flutter chief executive Peter Jackson said.

“While the World Cup final was a real spectacle to watch and very entertaining, I was watching it through my fingers because it was a very expensive event for us with all that goal scoring and Argentina winning,”

Argentina had gone into the World Cup as the second favourite, behind Brazil.

Overall, Flutter says “customer friendly sports results” in December cost nearly £40m, which included a flurry of wins for favourites in the Premier League once games resumed on Boxing Day, Jackson says.

Taylor Wimpey’s full year results this morning show it achieved a very robust performance in 2022, but faces a “challenging, but manageable, outlook” for 2023.

So says Oli Creasey, equity research analyst at Quilter Cheviot, who flags that the housebuilder hopes to maintain prices, while building fewer homes.

“What is particularly notable is the interplay between volumes and prices.

Taylor Wimpey has indicated that sale prices are likely to remain firm despite recent house price index evidence, with an average price for private completions of £367k – equal to the average over H2’22. However, the company also guided to a significant drop in volumes to a range of 9,000-10,500, a fall of around -30% year-on-year.

That equates to a weekly sales rate of 0.5-0.7x, and suggests further falling confidence amongst buyers given the sales rate for February was 0.66x, at the top end of this range. Likewise, it suggests that analyst consensus figures, which are currently forecasting 11,000+, are too high and will be downgraded this morning.

“The sales price is likely influenced by the level of reservations made prior to completion, which is lower than last year but still equal to over 8,000 homes / £2.2bn. Crucial to Taylor Wimpey’s strategy will be replacing these reservations for next year and at least maintaining or growing sales rates to more normalised levels.”

Staff at sandwich chain Pret a Manger are getting a pay rise next month, as the company looks to avoid breaking minimum wage laws.

Pret a Manger will increase the salaries of its workers from April 1, when the National Living Wage (NLW) set by the government will increase.

Pret’s “team members” will see pay increase to between £10.60 and £11.90 per hour, up from £10.30- £11.55 per hour at present.

Barista pay will increase to between £11.20 and £12.85, depending on location and experience, up from £10.85-£12.50.

The move will keep Pret on the right side of the law, as the minimum amount companies are allowed to pay people over 23 is set to increase to £10.42.

Pret workers last saw their pay rise in December, as the hospitality sector scrambled to attract workers during the busy run-up to Christmas.

These wage rises should help Pret staff through the ongoing cost of living crisis, at a time when grocery inflation has hit a record 17.1%.

But it may add to the Bank of England’s concerns that inflationary pressures are building in the economy.

Good morning, and welcome to our rolling coverage of business, the financial markets and the world economy.

One of the UK’s largest housebuilders has flagged that sales and reservations have weakened this year, as the housing market is cooled by higher interest rates.

But, there are also signs that the market may be picking up after demand slumped at the end of last year.

Taylor Wimpey reports this morning that its private sales rate is running at 0.62 homes per outlet per week so far this year, down from just over 1 per week in 2022.

The cancellations rate is running at 17%, up from 14% for the equivalent period in 2022, suggesting more customers are abandoning plans to buy a home.

Taylor Wimpey says that current trading does show “some signs of improvement from the fourth quarter of 2022” – when the market turmoil triggered by the mini-budget hit demand.

But, it adds, we are only at the start of the Spring selling season:

While it is encouraging to see an uptick in sales and ongoing robust customer interest in our homes, as previously announced, our reservation rate is significantly lower than in recent years as affordability concerns weigh, particularly for first time buyers, and we have reflected this in our build programmes for the year.

As this blog covered yesterday, UK mortgage approvals and lending fell in January while annual house price growth turned negative in February for the first time in almost three years.

Taylor Wimpey’s full-year results show that its pre-tax profits grew by almost 22% last year, to £827.9m from £679.6m.

Pricing-wise, the company expects average pricing for private completions in the first half of 2023 to be at a similar level to the £367k achieved on completions in the second half of last year.

Jennie Daly, chief executive, says ‘tight operational controls and price discipline’ helped to grow profit margins last year. But, she warns that the ‘weaker economic outlook’ will hit demand in the near term.

“In a year marked by two distinct halves, we acted quickly and decisively to address rapidly changing market conditions in the second half of the year and continued to focus on operational excellence and efficiency.

While the weaker economic backdrop continues to impact the near-term outlook, customer interest in our homes remains good and, whilst it is still early in the year, trading has shown some signs of improvement compared to Q4 2022.”

Also coming up today

We’ll hear the Bank of England’s chief economists’ views on the economic outlook today. Huw Pill will give a speech, on whether 2023 will be “a year of growth or survival”, this afternoon.

Yesterday, BoE governor Andrew Bailey signalled that interest rates may have peaked, after being raised 10 times in a row since December 2021.

The latest eurozone inflation data will show if the cost of living squeeze eased at all in February. Annual CPI inflation across the euro area is forecast to drop to 8.2%, from 8.6% in January, still four times the European Central Bank’s official target.

But, the report could be an ‘upside surprise’, fears Michael Hewson of CMC Markets. He points out that food prices continue to climb (as in the UK):

Hewson says:

Much was made of the fact that EU headline inflation saw a sharp drop from 9.2% in December to 8.6% in January, with many taking the view that we could well continue to see sharp declines in the headline numbers over the course of the coming months.

While an encouraging development, along with the sharp declines also being seen in headline PPI, any hopes of that continuing appear to have receded after this week’s flash CPI numbers from France, Spain and Germany, for February all of which saw surprise increases in the headline rate of inflation, driven by sharp increases in food prices.

The recent declines in headline inflation also aren’t being reflected in core prices, and as far as wages are concerned these are still rising.

The agenda

• 10am GMT: Eurozone inflation rate for February

• 10am GMT: Eurozone unemployment rate for January

• 12.30pm GMT: European Central Bank’s monetary policy meeting accounts

• 1.30pm GMT: US initial jobless claims report

• 3pm GMT: Bank of England chief economist Huw Pill gives a speech on ‘2023 economic outlook – a year of growth or survival?’