What to Watch: Aston Martin sinks, Premier Oil deal and supermarket woes

Tom Belger
·Finance and policy reporter
LONDON, ENGLAND - FEBRUARY 01:  An Aston Martin DB5 sits in the new 'Heritage' Showroom' in Hammersmith on February 1, 2012 in London, England. The showroom is the UK's first high street 'Heritage' showroom specialising in vintage and classic Aston Martin cars, and opens to the public on February 2, 2012.  (Photo by Dan Kitwood/Getty Images)
Aston Martin shares sank after sales plummeted. Photo: Dan Kitwood/Getty Images

Here are the top business, market and economic stories you should be watching today in the UK, Europe, and abroad:

Aston Martin issues stark profit warning

British luxury carmaker Aston Martin (AML.L) warned investors today that it faces a sharp drop in annual earnings after a year of plummeting sales, including a 7% fall in wholesale volumes in its European market and weak demand for the Vantage model.

The carmaker said that annual earnings before interest, tax, depreciation, and amortisation in 2019 would be up to 47% down on 2018, falling to between £130m ($171m) and £140m.

“From a trading perspective, 2019 has been a very disappointing year,” Aston Martin CEO Andy Palmer said. “Whilst retails have grown by 12%, our best result since 2007, our underlying performance will fail to deliver the profits we planned, despite a reduction in dealer stock levels.”

READ MORE: Aston Martin opens new factory in Wales

Shares in Aston Martin tanked more than 13% on Tuesday following the announcement.

Its troubles were exacerbated by better news emanating from its rival Rolls-Royce (RR.L) said on Tuesday it recorded a 25% jump in sales in 2019, underpinned by solid demand for its first-ever SUV, Cullinan, just a year after the launch.

The 116-year-old British company said it sold a record 5,152 cars in 2019, compared with 4,107 units in the prior year.

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Morrisons sales fall as Big Four supermarkets struggle

File photo dated 30/09/16 of a Morrisons store. The supermarket is to urge the UK's highest court to overturn a ruling which gave the go-ahead for compensation claims by thousands of staff whose personal details were posted on the internet.
Morrisons sales fell over Christmas. Photo: PA

Morrisons (MRW.L) reported falling sales over the crucial Christmas period, with the supermarket’s CEO blaming “unusually challenging” conditions.

Morrisons said Tuesday same store sales fell by 1.7% in the 22 weeks to 5 January.

The slump was driven entirely by a slowdown at its supermarkets, but the results appeared better than expectations as its shares were trading 2.7% higher at around 9.40am on Tuesday.

Morrisons didn’t break out sales for the 9 weeks up to Christmas day but Bruno Monteyne, a retail analyst at Bernstein, forecast a fall of 2.6% in the period based on Tuesday’s numbers.

The sales slump came as market research firm Kantar Worldpanel said separately Tuesday that all of the ‘big four’ UK supermarkets lost market share over Christmas.

BP sells two North Sea assets to Premier Oil

Premier Oil (PMO.L) has announced plans to buy two oilfield assets from BP (BP.L) in the North Sea for $625m (£474m).

The oil company said on Tuesday it would snap up BP interests in five fields in the Andrew area, which is currently producing around 18,000 barrels of oil equivalent per day.

It said it would also buy BP’s interest in a significant production and infrastructure hub in Shearwater, adding 25 million barrels of oil equivalent in reserves.

A separate deal was announced for a stake in the Tolmount area from Dana for $191m, which Premier said would deliver its first gas by the end of the year.

European and Asian markets rebound

European stocks rose higher on Tuesday in spite of tensions between the US and Iran, bringing to an end the two-day sell-off sparked by the US assassination of a senior Iranian general.

Reuters reports the lack of any immediate escalation on Tuesday had eased investors’ fears. The Euro Stoxx 50 (^STOXX50E) and the French CAC 40 (^FCHI) were trading 0.4% higher, and the German DAX (^GDAXI) surged 0.8%.

But the FTSE (FTSE) posted lower gains of 0.1%, with Aston Martin shares crashing more than 10% at 10am in London after sales slid.

Overnight in Asia, the Hong Kong Hang Seng Index (^HSI) rose 0.3%, the Nikkei (^N225) leapt 1.6%, while China’s Shanghai Composite index (000001.SS) was 0.7% higher.

What to expect in the US

US stocks also looked set to rise, with Dow Jones futures (YM=F) up 0.1%, S&P 500 futures (ES=F) up 0.2% and Nasdaq futures (NQ=F) 0.3% higher.