Market report

Pay growth matches prices | Primark elevates ABF


Pay-wage-slip

Wage growth has caught up with rising prices for the first time in more than a year, meaning that people’s real pay is no longer falling behind inflation.

Regular pay, excluding bonuses, rose by 7.8% in May to July compared with the same period last year.

Inflation rose at the same pace over the same period.

Between June and August, the estimated number of vacancies fell by 64,000 on the quarter to 989,000. Vacancies fell on the quarter for the 14th consecutive period. 

Labour disputes were responsible for 281,000 working days lost in July.

Chancellor Jeremy Hunt said: “It’s heartening to see the number of employees on payroll is still close to record highs and that our unemployment rate remains below many of our international peers.   

“Wage growth remains high, partly reflecting one-off payments to public sector workers, but for real wages to grow sustainably we must stick to our plan to halve inflation.”

Scotland’s employment rate rose over the quarter to 75.1% and unemployment rate increased to 4.3% in May to July.


Poundland swoops on Wilko

Wilko

Poundland has agreed to take on the leases of 71 Wilko shops, providing hundreds of jobs and easing pressure on the retail sector.

Pepco Group, which owns Poundland in the UK, is expected to convert the stores to the Poundland brand.

Full story here


Primark

Primark

Shares in Primark‘s owner closed almost 6% higher after the chain’s like-for-like sales growth for the financial year is now tipped to be around 9%, with like-for-like sales likely to be around 7% in the second half. For the financial year as a whole, sales are forecast to be around 15% ahead year on year, it added.

“These higher sales are the result of limited and carefully selected price increases through this financial year to partially recover high levels of input cost inflation, assisted by a strong performance from new stores opened in the year, and by demand for our attractive ranges,” said parent company Associated British Foods.

However, it said adjusted operating profit margin would be weaker in the second half due to higher-than-expected stock loss from stores across its estate and a modest amount of German restructuring costs, coming in at slightly below 8% and the same figure for the full financial year.


Smart Metering Systems

Smart Metering Systems, the Glasgow-based meter installer, posted a 31% increase in the first half on a 26% rise in revenue to £79.3 million.

The pre-tax profit rose to £8m from £6.1m, while the company declared a 10% rise in interim dividend to 22.689p per share.

SMS said it is  on course to install about 500,000 smart meters this year.


Ithaca Energy and Cambo

Ithaca Group is acquiring the remaining 30% stake in the Cambo oil and gas field from Shell to give it 100% ownership.

The acquisition, which has minimal near-term cost exposure, will provide Ithaca Energy with full control over the progression of the future development of Cambo, the second largest undeveloped discovery in the UK North Sea.

Full story here


Market close

The FTSE 100 closed up 0.41% at 7,527.53.

Sterling was last down 0.33% on the dollar, trading at $1.2468, while it remained stable against the euro at €1.1636.



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