Three things you need to know in the financial markets this morning from investment writer, Tony Cross.
There has been a long running dispute between HMRC and a major gambling entity over the incorrect application of VAT for revenues received from gaming machines prior to 2013. Finally it seems that the taxman has admitted defeat and won’t appeal the latest judgement, which has pushed William Hill [LON:WMH] to publish a statement saying it expects to receive between £125m and £150m in settlement. This is a material figure and will be welcomed by shareholders, although given the extensive government support the industry has received in recent weeks, a degree of tact is probably necessary from all in the sector who stand to win here.
Full year results from Experian [LON:EXPN] are out today and have come in at the upper end of expectations. However this period was largely unaffected by the COVID-19 crisis, which is hitting revenues, with the company splitting out April’s performance by territory and operations. Organic revenues for the month fell by 5% although expectations are that downside for Q1 won’t be much lower than this, either. The belief is that the company can ride out this bout of uncertainty and as such a second interim dividend is being paid at the expected rate.
Marks and Spencer
Marks and Spencer [LON:MKS] has printed its full year numbers today, headlined ‘securing the future, accelerating change’. That’s where the optimism ends however, with pre-tax profits off by 20%, earnings per share down by almost a half and the dividend being culled by 70%. COVID-19 has taken a toll on the business, but the report also goes on to detail the impact the pandemic is forecast to have in the coming months, too. A series of cost saving measures have been taken, but there’s cause for optimism with the start of Ocado distributing M&S food from September 1st being seen as a potential game changer. Retail has had a tough ride of late and this company is no exception. However, with a nation that may be far more inclined to shop at home in the longer term, this distribution deal could provide a much needed break.
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