FTSE 100 Live: Marks & Spencer pleased with festive sales and Tesco raises ‘Super Thursday’ profit forecast
Arks & Spencer and Tesco today added their names to the list of major retailers reporting strong Christmas sales.
M&S boss Steve Rowe said the holiday season had been strong for the chain as it increased clothing and home sales for the second consecutive quarter and the food division maintained its recent momentum.
Tesco said market share growth in the UK meant retail operating profits for the year would be slightly above its current forecast of £2.6bn. There are also updates today from Halfords and ASOS, as well as Persimmon in the homebuilding sector.
FTSE apartment in the midday trade
The FTSE 100 shot higher to climb into positive territory this afternoon: fair.
Next follows the index, down 3.7%. It said today it would stop offering full sick pay to unvaccinated workers, although it is not clear that this is influencing the shares.
The tranquility of the broken countryside
Countryside’s share price is tumbling today after the homebuilder reported an almost 50% drop in first quarter sales despite the booming UK property market.
The grim numbers sent investors packing, sending Countryside’s share price down more than 27% to 287p in a generally flat FTSE 250.
The developer’s CEO, Iain McPherson, stepped down today with immediate effect as a ceasefire agreement was brokered with activist investor Browning West.
ASOS Heads to Core Market
ASOS is preparing to enter the main London market after 20 years on the AIM junior index.
The online fast fashion seller – which sucked up Covid-19 victims TopShop, TopMan and Miss Selfridge last year – has brought former Paddy Power boss Patrick Kennedy to its board as he is preparing for the jump.
Its shares have fallen nearly a third since last March amid compressed supply chains and soaring shipping costs. Sales growth slowed to 2% in the four months to January.
But a market capitalization of £2.25 billion would secure a place on the FTSE250, opening up access to new investors and passive follow-on funds.
Retail analyst Nick Bubb noted that the promotion is likely to “put the cat among the pigeons at [AIM-listed] Boohoo HQ”.
Shares of ASOS jumped 10% to 2500p.
Sad News For Retail Nerds: The Christmas Winners Game Is Over
Determining the retail winners of the Christmas trade period is a favorite task for the (immaculate) anoraks who are obsessed with stores.
Did Tesco whip up a little more Albanian Prosecco than Sainsbury? Didn’t Waitrose’s selection of cheese platters leave M&S in the dust?
For retail nerds – weird people who think like-for-like sales are key to understanding the universe – this game might be up.
Tesco, Sainsbury’s and M&S are still dutifully trading, for now, which means we can believe the numbers they put out.
Mitchell & Butler sees pint and meal sales hit by Omicron
Mitchells & Butler, owners of All Bar One and Toby Carvery, tried to give a high mark today despite a drop in business over Christmas.
M&B, which runs around 1,700 bars and restaurants across the country, said the introduction of measures to curb the spread of Omicron had led to a 10% drop in sales over the past four weeks. This derailed what looked like a decent recovery at the start of the quarter. The Christmas and New Year crisis meant total sales in the 15 weeks to January 8 were down 1.5% from a year earlier.
CEO Phil Urban put a positive spin on things, saying sales of Yorkshire pints and puds were likely to rebound quickly as restrictions were rolled back and Britain learned to live with Covid.
“Experience shows that as restrictions ease and confidence returns, our business is able to recover quickly,” he said. “To that end, while we expect the business to continue to be impacted in the near term, we are encouraged by the latest data on the Omicron variant which we believe will boost consumer confidence to return to the pubs and restaurants, which will allow us to regain the momentum that was beginning to build.
Omicron isn’t the only problem the company faces: M&B, which also owns the Harvester chain, said it faced rising costs due to rising wages and energy costs. The hotel business expects costs to rise by £60-65m from pre-pandemic levels due to inflationary pressures.
The shares improved 2.8p, or 1%, to 260.4p.
Sophie Lund-Yates, equity analyst at Hargreaves Lansdown, said: “The group has been forced to stutter, start and stop a few times, but trading when it’s going is going well. Longer term, the challenge remains how best to tackle the fierce competition in mid-market restaurants and bars, but that’s a question that can be put aside until the short term hurdles come to an end. term have been eliminated.
Standard Life lands £1.8bn pension deal with Imps
The trend of big companies shifting their staff’s pensions to insurers continued today with a £1.8billion deal between Standard Life and pension fund Imperial Tobacco.
The deal sees the pensions of 6,600 Imps employees move to the insurer, ensuring the security of funds.
Helen Clatworthy, Chair of the Fund Trustee, said: “We are delighted to have entered into this block annuity transaction with Standard Life. This redemption is a major step in the fund’s risk reduction strategy and considerably improves the security of members’ benefits.
Standard is part of the Phoenix Group, which is large in the block purchase annuity market.
Hymans Robertson acted as lead advisor to the Trustee for this transaction.
M&S shares fall, ASOS rebounds 8%
Marks & Spencer shares are down 5% amid signs investors used today’s update as a chance to lock in profits after a strong run.
Despite further signs of recovery, the widely held shares fell 11.6p to 241.4p in the FTSE 250 index. They were at 263p on Monday, after surging 145p in August.
It was a similar story for Tesco, which raised its profit forecast but still fell 5.15p to 287.1p in the FTSE 100 index. Other retail droppers included Next and JD Sports Fashion. .
The FTSE 100 index was down 13.08 points to 7538.74, after hitting its highest level since the start of 2020 during yesterday’s session. The FTSE 250 index remained broadly unchanged, helped by engineering consultancy Wood rising 9% following a trade update.
Countryside Properties fell 15% after announcing trading below par and the immediate departure of its chief executive Iain McPherson.
Halfords was down 4% after its trade update, but ASOS’ latest helped fast fashion shares rise 8%.
Tesco profits will hit £2.6bn after bumper Christmas
TESCO said today it has defied rising inflation and supply chain issues to ensure customers have a great Christmas, which is reflected in the surge in sales.
Sales were well up on the pre-pandemic period and slightly up on a year ago when there was panic buying and a lockdown that saw Christmas effectively canceled for many.
Tesco, the UK’s biggest grocer, now expects profits to hit £2.6bn, ahead of previous forecasts.
Yesterday Sainsbury’s told a similar story but was able to raise profit forecasts by a higher percentage.
Aviva CFO khaki pockets
Homebuilder Persimmon has poached Aviva chief financial officer Jason Windsor as its new chief financial officer.
Windsor, a former Oxford-trained investment banker, replaces Mike Killoran, who has worked at Persimmon for 25 years and is retiring.
Roger Devlin, Chairman of Persimmon, said: “Jason is a respected and proven FTSE 100 CFO and we are delighted to have recruited someone of his caliber and experience as a CFO to complement our strong team. of management.
Windsor, a former top-class cricketer who is still dabbling, has been with Aviva since 2010 and has been chief financial officer since 2019. He helped oversee the company’s slimming down under CEO Amanda Blanc.
He said: “I am delighted to join the Group and excited about the opportunities ahead. Persimmon is in a leadership position in a critical sector of the UK economy and I look forward to working with the team as they continue their journey to become Britain’s best homebuilder, while maintaining financial returns. at the forefront of the industry.
He will join in July. Blanc thanked Windsor for his “commitment and contribution during this time here.”
News of Windsor’s appointment came as Persimmon reported strong trading in 2021. Turnover rose 10%, supported by a rebound in new home sales.
Some purchases were delayed in late 2021 by people in isolation with Omicron and inflationary pressures continue, but the company said these issues were minor.
Mitchells upbeat despite festive downturn
Mitchells & Butlers, owner of Harvester, Toby Carvery and All Bar One, today highlighted Omicron’s impact on the hospitality industry.
The chain’s comparable sales fell 10.2% in the four weeks of the holiday season, after rising 2.7% before the variant was discovered.
Managing Director Phil Urban is encouraged by recent data from Omicron and hopes Mitchells will soon regain its previous momentum.
He said: “Experience shows that as restrictions ease and confidence returns, our business is able to recover quickly.”