Market report

Inflation hits consumer stocks | Ted Baker talks | Weir refinances


5pm: Retailers take inflation hit

European equities had mixed fortunes as traders digested more robust inflation data from both sides of the Atlantic.

The FTSE 100 index managed to eke out a gain of 4.14 points to close at 7,580.80 and the CAC 40 in Paris closed up 0.1%, while the DAX 40 in Frankfurt ended down 0.3%.

Retailers largely struggled, with traders mindful of an inflationary hit to consumer spending. High street chain Superdry lost 4.2%, while fast-fashion company boohoo dropped 4.8%.

Ted Baker bucked the trend, however, rising 3.3% after it confirmed that Sycamore Partners Management will participate in the retailer’s formal sale process, but cautioned that there is no certainty any offer will be made (see below).

7am: Tesco profits rise but fall due next year

Tesco posted group adjusted operating profit of £2.8bn, up 58% and in line with the average analyst forecast, but cautioned profit was likely to fall in the current year in view of the cost of living squeeze on consumers.

The supermarket group, which has a 27% share of Britain’s grocery market, reported retail adjusted operating profit of £2.65 billion in the year to 26 February, slightly above guidance.

Edinburgh-based Tesco Bank returned to profitability, posting a profit before tax from continuing operations of £188.5m (2021: loss of £154.9m).

Full story here

7am: Inflation at 30-year high

Prices rose by 7% in the 12 months to March, their fastest rate for 30 years and up from 6.2% in February.

The cost of living continues to outstrip wage growth, putting further pressure on the government to do more to help struggling households.

Full story here

7am: Sycamore confirms Ted Baker talks

Fashion retailer Ted Baker says Sycamore Partners Management will participate in the formal sale talks announced on 4 April.

As such, Sycamore is no longer required to abide by the Takeover Code to meet a deadline set for 5pm on Friday.

There can be no certainty that an offer will be made, nor as to the terms on which any offer will be made.

7am: Weir refinances

Weir Group has completed the refinancing of its main banking facility, with a syndicate of 11 global banks. The new $800m Revolving Credit Facility (RCF) will mature in April 2027 with the option to extend for up to a further two years. 

The margin on the new facility is significantly lower than the previous facility that was agreed during the early stages of the Covid-19 pandemic and reflects positive credit rating momentum over the last two years as Weir has continued to reduce leverage and show its resilience as a mining technology focused business . 

This new facility replaces the existing $950m RCF that was due to mature in June 2023. All key terms including covenants remain unchanged. 

Global markets

Wall Street stocks ended the session in the red on Tuesday as investors digested a key inflation report from the Labor Department.

Consumer price inflation jumped to 8.5% – its fastest annual rate of growth since 1981 – from 7.9% in February. Analysts had been expecting a figure of 8.4%.

At the close, the Dow Jones Industrial Average was down 0.26%, while the S&P 500 was 0.34% weaker and the Nasdaq Composite saw out the session 0.30% softer.

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