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M&S shares soar | Vertu sales strong | retail sales fall
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5pm: Market lifted by retailers
After yesterday’s rout the FTSE 100 regained some ground, closing up 29 points, or 0.41%, at 7,087. Wall Street was also higher.
In London, supermarkets gained as the takeover deal for Morrisons was sparked into a frenzy of buying.
Shares in Britain’s fourth biggest grocer closed up 4.2%, the second best mid-cap performer behind M&S which soared by 14% on the back of positive trading (see below).
However, the travel sector struggled, amid Delta variant concerns.
British Airways parent International Consolidated Airlines Group fell 0.6%, budget carrier easyJet lost 0.2% and holiday firm On the Beach ended 4.1% lower.
Brent oil was quoted at $66.02 a barrel late Friday, down from $66.1 yesterday.
9am: M&S and Morrisons stabilise markets
Markets regained a little stability after a difficult week.
Marks & Spencer was the best performer in the FTSE 250, up 11%, after making a strong start to its financial year (see below).
Morrisons was 4.6% higher after private equity firm Clayton, Dubilier & Rice announced a revised bid for the supermarket group late on Thursday.
Sainsbury and Tesco were up 1.8% and 1.1%, respectively. Ocado gained 1.2%.
The FTSE 100 index was down 17.65 points, or 0.3%, at 7,041.21 after opening 0.3% higher. The FTSE 250 index was down 19.70 points, or 0.1%
7am: Marks & Spencer ‘on track’
M&S said it has seen an encouraging performance providing confirmation that the transformation programme is on track.
In an update on trading for the 19 weeks to 14 August it said: “Assuming no further Covid-related restrictions on trading, at this early stage we expect adjusted profit before tax for the year to be above the upper end of previous guidance of £300-350m,”
The company added that the figures endorsed its “Never the same again” strategy.
Food: revenue in the period has outperformed, increasing 10.8% on last year and 9.6% on 2019/20.
Clothing & Home has seen a good recovery in its performance. Revenue is up 92.2% on last year and down just 2.6% on 2019/20. “The change in our approach to trading, including more focussed ranges, fewer promotions and a substantially smaller summer sale, has resulted in full price sales up c.9% on 2019/20,” said the company.
7am: Retail sales fall
Retail sales across the UK unexpectedly fell sharply last month, according to official data which suggested the Euro 2020 tournament proved a diversion from shopping.
Retail sales volumes dropped by 2.5% in July from June, the Office for National Statistics said.
Food store sales were down by 1.5% while non-food stories reported a fall of 4.4%.
However, sales were up by 5.8% compared with their pre-coronavirus pandemic levels in February 2020.
7am: Vertu sales strong
Motor dealer Vertu said it continues to experience strong used vehicle gross margin retention, driven by the “exceptional” UK used car market conditions.
Consequently, the group expects that it will deliver an adjusted profit before tax of no less than £50m in the six months to 31 August 2021. It will also resume dividend payments with interim figures.
“Like-for-like new vehicle order take for the key month of September is currently running in excess of prior year levels, however, there is a risk that well documented new vehicle supply shortages will result in vehicle deliveries being delayed into future periods. As a consequence of reduced new vehicle supply, used vehicle supply may also be restricted in the coming months.”
The board is upgrading the estimate for profit before tax for the current financial year to be in the range of £50m to £55m (previously £40m to £45m).
7am: STV studios acquired
A property investment trust has acquired STV’s media studios and HQ in Glasgow, a recycling centre in Aberdeen and the life science and biotech campus in York in a deal worth £80 million.
The FTSE 100 was looking at another nervy start following a 110-point plunge yesterday amid concern at tightening of stimulus measures, a tightening of China’s economy and the spread of the Delta variant of Covid..
M&A activity, led by the new bid for Morrisons, may help stimulate some confidence among traders.
US markets closed broadly flat overnight even though new data suggests the economy there is growing faster than first thought.
The Dow Jones Industrial Average lost 0.2% and the S&P 500 shed 0.1%, but the Nasdaq Composite closed 0.1% higher.
Asian markets looked to be heading for their lowest close collectively since November following their worst week since February.
In Tokyo, the Nikkei 225 index was down 1% while the Shanghai Composite was 1.8% lower and the Hang Seng index in Hong Kong was down 2.4%.