Market report

M&S bid talk for Ocado stake | Ryanair quits LSE | retail uplift


5pm: Ocado top on M&S talk


Ocado closed top of the FTSE 100 index, up 6.8%, after Deutsche Bank highlighted Marks & Spencer could buy out Ocado’s half of their online retail joint venture.

Deutsche Bank said cash flow at M&S “is no longer being squandered on an unsustainable dividend but saved to recover the investment grade credit rating that may be required to buy out Ocado.” M&S shares ended up 2.5%.

At the other end of the large-caps, travel stocks were among the worst performers on fears over the Covid resurgence on the continent.

British Airways parent International Consolidated Airlines closed down 3.8%, while aviation aftermarket services providers Rolls-Royce and Melrose Industries lost 3.9% and 4.4% respectively.

Midcap carrier Wizz Air, which has recently ordered new aircraft, closed down 4.7%.

Ryanair, which announced plans to de-list from London due to declining trading volumes, finished 1.8% lower.

The FTSE 100 closed 32.39 points lower at 7,223.57.

7am: Kingfisher confident

B&Q store

B&Q owner Kingfisher said it had made a good start to its final quarter and expects second half LFL sales and full year adjusted pre-tax profit to be towards the higher end of previously guided ranges.

B&Q’s third quarter sales fell 5.2% and by 5.6% like for like but were up 17.1% on a two-year basis reflecting resilient demand against the backdrop of very strong prior year comparatives.

Total group sales for the UK and Ireland were down 1.9% (LFL – 3.5%; 2-year LFL + 15.7%). The company said it was continuing to grow sales ahead of the market with strong engagement from new and existing customers.

Thierry Garnier, chief executive, said: “Kingfisher has delivered another successful quarter, with 2-year LFL sales growth of 15% and strong growth across both retail and trade channels, and across all categories.

“These are even stronger sales trends given the backdrop of an increasingly ‘normalised’ consumer spending environment. Demand remains supported by what we believe are enduring new industry trends, including more working from home.

“We have entered our final quarter with positive momentum and now expect sales and profits to be towards the higher end of our previously guided ranges. Overall, with strong execution and supportive new long-term trends for our industry, we remain confident of continued outperformance of our markets.”

7am: ONS figures show retail uplift

UK retail sales figures published by the ONS showed a 0.7% year-on-year sales in October, which contrasted with figures earlier this week from the Scottish Retail Consortium showing an 11% slump.

Helen Dickinson, chief executive of the British Retail Consortium, said: “Retailers will be relieved by the improvement in sales as they enter the final straight in the run up to Christmas.

“Footfall growth on UK streets is the highest among major EU economies, and this is clearly translating into consumer spend.

“Furthermore, with Halloween heavily curtailed by the pandemic last year, October showed chocolates and children’s costumes selling a treat as families made the most of the occasion.

On Wednesday David Lonsdale, director of the Scottish Retail Consortium said its figures were “underwhelming”, adding: “Not even the return of Hallowe’en and guising could lift Scottish retail sales last month as frightening figures showed a 11% slump compared to the similar trading period prior to the pandemic.”

7am: Ryanair cancels listing

Ryanair has notified the UK Financial Conduct Authority that it wants to cancel its listing on the London Stock Exchange, claiming the cost outweighs the benefits.

In a statement the airline said: “As indicated at our interim results, and following subsequent shareholder engagement, Ryanair has decided to request the cancellation of London listing as the volume of trading of the shares on the London Stock Exchange does not justify the costs related to such listing and admission to trading, and so as to consolidate trading liquidity to one regulated market for the benefit of all shareholders.”

The last day of trading in its shares on the London Stock Exchange would be 17 December.

The company will continue to have a primary listing on the regulated market of Euronext Dublin, “which offers shareholders the highest standard of protection, including compliance with the UK Corporate Governance Code, and its ADRs are listed on NASDAQ.”

Global markets

London was expected to recover the bulk of yesterday’s losses ahead of today’s retail sales figures.

Wall Street failed to give clear direction with the Dow Jones Industrial Average down 0.17% while the S&P 500 rose 0.34% to hit another record high and the Nasdaq was 0.45% higher.

Investors focused on upbeat retail and technology earnings which outshone hawkish inflation comments from a Federal Reserve policymaker.

Asian markets were also a mixed bag, with Tokyo’s Nikkei 225 showing a 161 points rise while Hong Kong’s Hang Seng dipped 314 points.

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