Market report

Property stocks lower | Marshalls | UU | TRG


4.45pm: Property stocks turn lower

British Land was down 1.79%, Hammerson slid 4.04% and Land Securities was dented 1.87% after rating downgrades at RBC Capital Markets amid concerns over a weakening property market.  A recession could lead to higher vacancy rates and weaker market rents.

Luxury car maker Aston Martin Lagonda tumbled a further 7.2%, continuing its recent volatility.

Centrica added 1.38% and SSE rose 1.78% after the government said on Monday that it would not be extending the windfall tax to electricity producers.

United Utilities Group was in the black by 0.77%, after agreeing to sell its portfolio of renewable energy assets in a £100m deal (see below).

After spending most of the session under water, the FTSE 100 closed 13.27 points higher at 7,209.86.

In economic news, the latest BRC-KPMG Retail Sales Monitor showed that retail sales fell in June, as surging inflation and the cost-of-living crisis caused shoppers to cut spending.

Total sales fell 1.0% last month, compared to an increase of 10.4% in June 2021.

Sales have now declined for three months in a row for the first time since the start of the pandemic in 2020, although the falls then were considerably larger.

7am: Restaurant Group acquisition

The Restaurant Group, owner of Wagamama and Franke and Benny’s, has acquired Barburrito, a Mexican style fast-casual restaurant chain for £7m.

The business operates across 16 sites in high-footfall locations across a range of retail formats.

7am: Marshalls revenue rises

Building materials and landscaping group Marshalls posted figures revealing the benefit of the Marley acquisition.

Group revenue for the half year ended 30 June 2022 was £348 million (2021: £298m). This represents year on year growth of 17% including the benefit of the acquisition of Marley.

On a like-for-like basis, group revenue growth was 7%.  Within this, Marley has traded strongly in the first two full months of Marshalls’ ownership.

The FTSE 250-listed group said the integration is progressing in line with the internal plans it put in place at the time of the acquisition.

The board confirms that its expectations for the current financial year are in line with market forecasts.

7am: United Utilities disposal

United Utilities Group is selling its renewable energy business, United Utilities Renewable Energy to SDCL Energy Efficiency Income Trust for approximately £100 million enterprise value.

UU has developed a portfolio of solar, wind and hydro renewable assets since 2014 and UURE comprises 69 MW of renewable generation assets across 70 sites. 

12.01am: Shop sales fall

Retail sales volumes have plunged to levels last seen in the depths of the pandemic, according to industry data revealing the third consecutive monthly decline.

The British Retail Consortium (BRC) said the value of total sales was 1% lower in June than a year ago. Like-for-like sales, which adjusts for changes in floor space, fell 1.3%.

BRC chief executive Helen Dickinson said: “Retailers are caught between significant rising costs in their supply chains and protecting their customers from price rises.

“The government needs to get creative and find ways to help relieve some of this cost pressure.”

Global markets

A combination of factors is putting downward pressure on equity markets. Worries over China’s Covid action along with fears that Russia will keep the Nord Stream 1 gas pipeline offline after its planned 10-day maintenance shutdown are among the issues unnerving traders as well as Wednesday’s US inflation data.

London was expected to open lower following following falls on Wall Street. The Dow Jones closed Monday’s session down 0.52%. The S&P 500 lost 1.15% while the Nasdaq fell 2.26%.

In Asia, Japan’s Nikkei was down 1.8%, Hong Kong’s Hang Seng was 0.97% lower and the Shanghai Composite was 0.57% softer.

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