Market report

Ocado hails M&S JV | Drahi raises BT stake | Tesco strike halted


5.15pm: Tesco strikes suspended

Usdaw will recommend its members in nine Tesco distribution centres accept an improved pay offer and has suspended the planned industrial action in the week before Christmas Eve pending the ballot result.

The two ballots involve over 5,000 Usdaw members, employed as drivers and warehouse workers, at nine Tesco distribution centres in: Daventry Clothing, Goole, Hinckley, Lichfield, Livingston, Magor (both trunk and main sites), Peterborough and Southampton.

Unite last week suspended its planned strikes.

5pm: National Express deal in focus

Having been in positive territory all day the FTSE 100 closed 12.8 points lower at 7,218.64, though the action focused on the FTSE 250 constituent National Express which was among the gainers, rising 2.98% to 242.20p after it agreed to buy Stagecoach in a deal the combines two of Britain’s biggest public transport operators.

On the blue chip index, Rentokil fell sharply after agreeing to buy US extermination firm Terminex in a stock and cash deal that values the business at roughly $7.6bn.

Russ Mould, investment director at AJ Bell, said: “The shares were up initially but soon traded lower as investors digested the information.

“The company is paying a fairly chunky premium, though a significant component is accounted for by its own shares.”

BT slumped after French telecoms giant Altice said it had increased its stake to 18% and reiterated that it had no plans to stage a takeover under UK rules.

Altice, owned by entrepreneur Patrick Drahi, bought a further 585.5m BT shares after building a 12% stake in June at a cost of £2.2bn, making it BT’s biggest shareholder.

Ocado jumped to the top of the index after the online supermarket group said it had won a patent infringement lawsuit filed by Norwegian robotics company AutoStore Holdings.

10.45am: Pipeline firm STATS sold

STATS (UK), the Aberdeenshire-based specialist pipeline engineering company, has been acquired by SRJ Technologies Group in a cash and shares deal worth £73.1 million.

Full story here

10am: Stagecoach-National deal

Stagecoach and National Express have agreed to an all-share merger, creating a company worth around £1.9 billion based on their current market capitalisations.

Full story here

9am: Ocado lifts market – BT investor raises stake

Online groceries firm Ocado helped lift the FTSE index, adding 3.33% after an initial win in a patent infringement case in the US against Norwegian firm AutoStore.

The court development compensated from a 3.9% drop in Q4 sales (see below).

The FTSE 100 was up 40.10 points at 7,271.54.

BT’s largest shareholder has increased his stake in the telecoms giant from 12.1% to 18%, prompting more speculation of a takeover bid.

Israeli-French billionaire Patrick Drahi said he has no plans to take the business private, as he announced he has snapped up a further 585 million shares.

However, his move prompted the Government to warn it could intervene if required, with ministers concerned that any pressure on BT to cut costs could affect the ongoing broadband rollout.

A spokesman said: “The Government notes the latest acquisition of BT shares by Altice. We are monitoring the situation carefully.

“The Government is committed to levelling up the country through digital infrastructure, and will not hesitate to act if required to protect our critical national telecoms infrastructure.”

BT shares fell back as Drahi’s Altice group reiterated that it had no plans to stage a takeover.

8.30am: Edinburgh SIPP provider acquired

SIPP provider iPensions Group has acquired the business assets of Edinburgh-based Forthplus Pensions, currently in administration, providing certainty to its 2,500-plus customers. 

Full story here

7am: Ocado sees M&S benefits


Ocado Retail, the joint venture with M&S, said fourth quarter sales declined 3.9% year on year, largely because of labour shortages, but were up 31.6% on 2019.

Management estimates M&S products now represent more than 30% of Ocado’s total retail sales.

Ross Hindle, retail sector analyst at Third Bridge, said: “Ocado’s M&S partnership continues to dish up impressive results with customers even more hungry for M&S products than those of predecessor Waitrose.”

7am: Begbies Traynor rises

Begbies Traynor, the business recovery and advisory firm, said revenue grew 39% to £52.3m in the six months to the end of October with an increase operating margins to 16% (2020: 14.4%) .

Adjusted profit before tax was 60% higher at £8m (2020: £5m).

The board has declared a 10% increase in the interim dividend to 1.1p (2020: 1.0p).

Ric Traynor, executive chairman, said: “I am pleased to report a strong financial performance in the period, which is testament to the benefit and integration of our recent acquisitions and maintains our track record of growth in revenue and adjusted earnings.

“This strong performance, and an anticipated increase in national insolvency numbers following the removal of the Government’s pandemic support measures, leaves us confident of delivering market expectations for the full year.

“We have a strong platform for growth, and we continue to progress a pipeline of acquisition opportunities, which together with organic growth initiatives across the group, will enable us to build upon our track record and we remain confident in our outlook for the current year and beyond.”

7am: Unemployment falls

A further fall in the UK’s unemployment rate has shown that the end of the furlough scheme in September did not result in a surge in job losses.

The Office for National Statistics (ONS) said the jobless rate fell to 4.2% in the three months to October as employment continued to recover though it remained 0.2 percentage points above its pre-coronavirus pandemic level.

The data also showed that employers added 257,000 staff to their payrolls in November, adding to signs that the labour market withstood the end of the furlough wage support.

Scotland’s estimated employment rate rose over the quarter to 74.6% while the estimated unemployment rate fell to 4.1%.

Global markets

London’s blue chips were expected to bounce back from yesterday’s 60 points fall as volatility remained the major tone amid continuing uncertainty around the Omicron variant.

On Wall Street the Dow Jones slipped 0.9%, while the S&P 500 index fell 0.9% and the Nasdaq Composite was 1.4% lower.

Asia-Pacific shares were lower ahead of the US Federal Reserve’s two-day meeting starting today.

The Fed will release a statement on Wednesday with quarterly projections for the economy, inflation and interest rates.

China’s Shanghai Composite fell 0.36% while Hong Kong’s Hang Seng index slumped 1.14% with shares of recently listed Weibo dropping more than 5%.

The Nikkei in Japan declined 0.62% and South Korea’s Kospi slipped 0.17%.

Leave a Reply

Your email address will not be published. Required fields are marked as *

This site uses Akismet to reduce spam. Learn how your comment data is processed.