More UK retailers in critical financial distress; fashion brand Quiz needs more funding soon – as it happened

A late newsflash: UK fashion brand Quiz has just warned shareholders that it will need extra funding by early next year, after a disappointing Christmas.

Quiz has told the City that it made a loss of £4.7m in the six months to 30 September, compared with a loss of £1.5m a year earlier.

Since then, it admits, it suffered a “marked decline in traffic both online and in-store” in November.

And in December, while online revenues have been broadly stable year-on-year, they have fallen again in physical stores.

As of yesterday, Quiz says, it had net borrowings of £3.5m, giving it £500,000 of headroom within its £4.0m of bank facilities.

It warns:

Given the disappointing level of revenues in the important Christmas trading period, as announced on 6 December 2024, the cash headroom available to the business is less than previously anticipated.

As a result, the Board anticipates that additional funding will be required by the Group in early 2025.

Time to wrap up…

After a weak Boxing Day, UK, shoppers are returning to the high street today in greater numbers than last year.

New data from MRI Software shows that footfall across all UK retail destinations had risen by +8% as of 12pm, compared to 27^th December 2023.

That might help the sector, where the number of UK retailers on the brink of collapse has risen by a quarter in the final three months of the year, driven by a combination of rising business costs and weak consumer confidence, according to a report.

The proportion of retail businesses classed as being in “critical” financial distress increased by 25% to 2,124 in the fourth quarter compared with the previous three months, the insolvency specialists Begbies Traynor said.

The general retail sector is under most pressure, with a 29% quarterly increase in businesses in critical financial distress, rising to 1,457 from 1,127 in the third quarter.

Stocks on Wall Street have fallen in morning trading in New York…

…while a rally in Japan pushed the Nikkei to a five-month closing high….

…and South Korea’s won has dropped to a 16-year low after lawmakers voted to impeach the country’s acting president.

Thousands of Land Registry workers have voted to strike in a dispute over office working.

There’s no sign of a festive Santa Rally on Wall Street, where the US stock market has fallen at the start of trading.

The Dow Jones Industrial Average dropped by 270 points, or 0.6%, to 43,055 at the open.

The broader S&P 500 index, and the tech-focused Nasdaq, have both also fallen by 0.6%.

Thousands of staff at the Land Registry have voted for strike action after being ordered back to the office for three days a week.

The Public and Commercial Services (PCS) union says 3,800 workers based in 14 offices across England and Wales have voted to strike, and are also concerned about the employer inappropriately using personal data and having to accept extra responsibilities without extra pay.

The Land Registry is a goverment agency that handles the registration of land and property ownership in England and Wales.

PCS general secretary Fran Heathcote said:

“The government doesn’t seem to learn that applying arbitrary targets on office attendance doesn’t increase productivity and is unpopular with staff members.

“If they want a motivated, hard-working workforce, ministers should trust their own employees to have some say over their working conditions, rather than acting like Victorian bosses.

“It’s not too late for management to avoid strike action by ending this dispute.”

A Land Registry spokesperson has said the agency “will respond as needed to maintain essential services as we have done during previous periods of industrial action.”

After yesterday’s drop in footfall, shoppers are returning to the high street today in greater numbers than last year.

New dat from MRI Software shows that footfall across all UK retail destinations had risen by +8% as of 12pm, compared to 27^th December 2023.

They report that shopper numbers on the high street is up 8.7% year-on-year, alongside a 7.3% increase in footfall at retail parks, and 7.2% at shopping centres.

This suggests that consumers are on the lookout for post-Christmas bargains, or restocking their fridges and cupboards after a flurry of festive feasting.

Shoppers are “shaking off their post-Christmas slumber”, says Jenni Matthews, marketing and insights director at MRI Software, adding:

Following a subdued start to the Boxing Day sales, this uplift is promising for for retail stores and destinations.

It’s expected that footfall will continue to rise as the day progresses and into the weekend as consumers restock on groceries, prepare for New Years celebrations, and hunt for Boxing Day bargains.

The London-listed mining company Gemfields said it had temporarily halted its ruby mining operation in Mozambique after groups “took advantage” of political unrest to set fire and attempt to invade its site, resulting in two fatalities.

Gemfields, one of the world’s largest miners of coloured gemstones, said that more than 200 people associated with illegal ruby mining attempted to invade the residential village built by the company next to its Montepuez Ruby Mining (MRM) operation in northern Mozambique on Christmas Eve.

The company, which is incorporated in Guernsey and is listed on the London and Johannesburg stock exchanges, said that the groups were trying to take advantage of the widespread civil unrest after the controversial and disputed recent national election.

Thames Water finances on ‘shaky ground’ even after debt restructuring

Anna Isaac

Thames Water’s finances are on “shaky grounds” even if it secures investor and court approval to restructure its debts, analysts have warned.

The company’s woe are set against an challenging outlook for the rest of the English and Welsh water sector too, according to financial services and research firm Morningstar.

While regulator Ofwat has greenlit significant bill increases for consumers of £31 a year on average up to 2030, companies may still face an uphill climb to secure the necessary investment to meet increasingly stringent standards.

Morningstar said in a research note:

“We believe the UK water utilities will still face considerable challenges over this period given the heightened environmental concerns and large funding needs for their capital programmes.”

Water companies have two months to lodge an appeal with the UK’s Competition and Markets authority if they believe the bill increases signed off by Ofwat before Christmas are unfair.

Still, even if other companies face higher borrowing costs and greater investment demands, Thames stands out as a troubled case. It is battling to secure court approval for a £3bn credit lifeline and it has said it needs to raise an additional £3.25bn in equity funding.

“However, both funding plans remain on shaky grounds as equity investors are concerned with the viability of the utility and the investability of the industry, while a smaller group of B-class debtholders oppose the emergency cash line as it will likely wipe out their investments in a restructuring scenario,” Morningstar said.