Market report

M&S lifts guidance | ITV rises on strong figures


5pm: London higher on strong earners

Stock prices in London closed higher on Wednesday, with the FTSE 100 outperforming continental peers to close 66.11 points, or 0.9%, higher at 7,340.15. 

ITV shares rose 13%, the best large-cap performer in London after the broadcaster said it saw an “outstanding” nine months with strong performances from its Studios and Media & Entertainment businesses driving revenue growth. Full story here.

Marks & Spencer jumped 16%, as top FTSE 250 performer. It raised its annual profit outlook for the second time in less than three months after a sales rebound. Full story here.

9am: ITV leads risers

A positive nine-month statement from ITV (see below) saw the commercial broadcaster top the FTSE 100 risers, up 9.5p (8.69%) at 118.8p.

FTSE 250 stock M&S shot up 30.85p (15.87%) at 225.25p even though its figures reflected a continuing divide between food and clothing (see below). Ross Hindle, Analyst at Third Bridge, notes that the online tie-up with Ocado “looks tasty” for M&S.

“However this bright spot can’t mask M&S’s structural challenges, particularly in clothing & home, where the store experience, fashion proposition and clothing range remains far off its competitors.

“M&S’s proposition continues to draw consumers towards the upper end of the target 35-55 target age range, with the Group unable to shake its “out-dated” fashion label.”

AJ Bell’s Russ Mould, said: “Something spectacular must have happened since August for Marks & Spencer to upgrade earnings guidance once again.

“Back then, it believed pre-tax profit for the year would be above the upper end of a previously guided £300 million to £350 million range. Now it’s talking about profit hitting £500 million which is quite some jump.”

The FTSE 100 was trading 19 points higher at 7,292.55.

7am: Marks & Spencer improves


Marks & Spencer said it expects profit before tax and adjusting items for the year to be ahead of expectations and in the region of £500m after reporting gains in market share during the first half.

Profit before tax and adjusting items for the period was £269.4m compared to a £17.4m loss last time. The figures include £47.5m of UK business rates relief, and a net rates charge of £50.3m in the period.

The retailer reported consistently strong growth in food sales of 10.4% and an improving margin mix which helped to deliver an increase in operating profit before adjusting items compared to 2019/20.

Clothing & Home delivered a substantial improvement in profitability with sales down 1% on 2019/20 despite lockdown extending into the first week of the period. Sales grew in Q2 and overall full price sales were up 17.3% for the period. Operating profit before adjusting items was £156.2m as compared to £109.6m in 2019/20.

Chief executive Steve Rowe said: “It is clear that underlying performance is improving, with our main businesses making important gains in market share and customer perception. The hard yards of driving long term change are beginning to be borne out in our performance.”

7am: Wetherspoon age split

Young drinkers have been pouring into pubs while older customers stay away, according to figures from pub chain Wetherspoon.

Full story here

7am: ITV ‘strong’

ITV chief executive Carolyn McCall said: “By any standards ITV has had an outstanding nine months. Both our Studios and Media & Entertainment (M&E) businesses have performed very strongly.

“Revenue from each business over the nine months is up both on last year and on 2019. This drove total external revenue up 28% compared to 2020 and 8% higher than 2019.”

The company said it has a a strong programming slate going into next year as it continues to invest in content and expects total schedule costs will be around £1.16 billion in 2022.

This includes the FIFA World Cup, the FA Cup and a strong schedule of dramas which will drive increased levels of live and streaming viewing.

For the nine months to 30 September total external revenue was up 28% at £2.38 billion (2020: £1.86bn) and up 8% compared to 2019.

7am: Menzies in Mexico

Aviation logistics firm John Menzies has secured a significant contract win with Mexico’s flagship carrier and largest international airline, Aeromexico, which includes ground services at 15 airports across the country.

Full story here

Global markets

A recovery in global markets and growing demand for air travel is working through to oil prices which extended strong gains in the previous session.

Industry data showed US crude stocks unexpectedly fell last week just as near-term travel demand picked up with COVID-19 pandemic curbs easing.

Brent crude futures climbed 32 cents, or 0.4%, to $85.10 a barrel after rising 1.6% on Tuesday.

US West Texas Intermediate crude futures rose 9 cents, or 0.1%, to $84.24 a barrel, adding to Tuesday’s 2.7% gain.

Stock prices fell in China after data showed factory gate prices rose at the fastest pace in 26 years last month, reducing the chances of a policy rate cut by the central bank in the near term.

The Shanghai Composite Index lost 1.2% while the Hang Seng index dropped 1.2%.

Japan’s Nikkei dipped as latest earnings from a number of companies underscored the fallout from rising costs of raw materials, although analysts said the overall earnings picture was not dull.

The Nikkei average was down 0.30%, on course for its fourth straight day of losses.

Wall Street ended lower, with the Dow Jones Industrial Average down 0.3%, S&P 500 down 0.4% and Nasdaq Composite down 0.6%.

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