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What to Watch: Wetherspoon profit dives, Interserve faces administration, and Apple hits back at Spotify

Oscar Williams-Grut
Senior City Correspondent, Yahoo Finance UK
Spotify picked a fight with Apple. Photo: Andrew Matthews/PA

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

Wetherspoon profits dive

Profits at JD Wetherspoon (JDW.Ltumbled in the first half of the year after the pubs firm was stung by a rise in costs.

Pre-tax profits in the six months to 27 January fell 18.9% to £50.3m. However, revenue rose 7.1% to £889.6m and like-for-like sales were up 6.3% in the period. Costs rocketed, especially labour, which increased by about £33m in the period.

Brexit-backing chairman Tim Martin used the company’s half-year earnings report to lash out at the “establishment” that supports Britain staying in the EU.

“The vexed debate about Brexit has continued since the referendum, nearly three years ago. Although the public voted to leave, the majority of ‘the establishment,’ including most MPs, most universities, the Bank of England, the CBI, and media organisations such as The Times, the Financial Times, and The Economist favoured ‘Remain’,” Martin said.

Interserve faces administration

Interserve (IRV.L) faces a crunch shareholder vote over its future on Friday as the outsourcing giant fights for survival and looks to avert administration.

Investors in the firm — which holds crucial UK government contracts for a range of services in prisons, schools, and hospitals — must decide whether to approve a restructuring proposal tabled by Interserve.

The group is proposing a debt-for-equity swap with its lenders, aimed at slashing a near-£650m debt mountain.

If approved, existing investors would see their holdings slashed to 5% and lenders such as RBS, HSBC, and BNP Paribas — together with Emerald Asset Management and Davidson Kempner Capital — would seize control of the remaining equity.

New York hedge fund Coltrane, Interserve’s largest shareholder with more than 27%, has reacted angrily and could yet scupper the plan as it seeks better terms. The vote will take place at 11am UK time.

Apple hits back at Spotify claim

Apple (AAPL) has hit back at Spotify’s (SPOT) claim it uses the app store to unfairly benefit Apple Music.

Spotify filed an anti-trust case with the EU earlier this week, claiming that Apple’s 30% charge on in-app purchases for App Store apps meant Apple Music was unfairly able to undercut Spotify and other rivals on price.

Apple responded with a lengthy blog post on Friday, accusing Spotify of using “misleading rhetoric” about the tech giant.

Spotify seeks to keep all the benefits of the App Store ecosystem — including the substantial revenue that they draw from the App Store’s customers — without making any contributions to that marketplace,” Apple said in a statement.

“At the same time, they distribute the music you love while making ever-smaller contributions to the artists, musicians and songwriters who create it — even going so far as to take these creators to court.”

Britain to ask for Brexit extension

UK politicians voted Thursday to ask the EU for an extension to the Brexit deadline, currently set for 29 March.

The EU still needs to agree to any request. European Council leader Donald Tusk said on Friday that he would be open to a “long extension” of the negotiating period.

UK prime minister Theresa May is expected to try and get her deal approved in a third meaningful vote next Tuesday before meeting with EU leaders on Wednesday to seek a short extension to allow time for the deal to be ratified.

The pound was down 0.2% against the euro (GBPEUR=X) and down flat against the dollar (GBPUSD=X).

SEC sues VW

The US Securities and Exchange Commission (SEC) has charged Volkswagen (VOW.DE) and its former CEO Martin Winterkorn with defrauding bond investors during the emissions scandal dubbed “dieselgate.”

The SEC filed a civil complaint in San Francisco late on Thursday. It covers the period from April 2014 to May 2015.

The regulator’s alleges that VW issued more than $13bn (£9.8bn) in bonds and asset-backed securities in the US markets “at a time when senior executives knew that more than 500,000 vehicles in the United States grossly exceeded legal vehicle emissions limits, exposing the company to massive financial and reputational harm.”

European markets

European stock markets were higher after a solid session overnight for Asian markets.

Britain’s FTSE 100 (^FTSE) was up by 0.4%, Germany’s DAX (^GDAXI) was 0.1% higher, France’s CAC 40 (^FCHI) was 0.3% higher, and the Euronext 100 (^N100) was up by 0.3%.

Japan’s Nikkei 225 (^N225) was up by 0.7%, Hong Kong’s Hang Seng index (^HSI) was up by 0.5%, and China’s benchmark Shanghai Composite (000001.SS) was up by 1%.

What to expect in the US

US stock futures were pointing to a higher open. S&P 500 futures (ES=F) was up by 0.2%, Dow Jones Industrial Average futures (YM=F) was up by 0.3%, and Nasdaq futures (NQ=F) were up by 0.4%.