Leading UK shares were marked lower in early trading on Friday as retail sales figures for May came in below expectations.
Retail sales fell by 1.4% between April and May as people chose to visit reopened bars and restaurants instead of buying food at supermarkets. The Office for National Statistics said sales fell most significantly at food stores as consumers took advantage of Covid restrictions being lifted in the hospitality sector to eat out.
The UK’s benchmark FTSE 100 index fell 0.25% to 7,135.50, though the midcap FTSE 250 gained 0.17% to 22,572.85.
Meanwhile in Asia stocks had a mixed day, with the Hang Seng in Hong Kong up 0.59% while China’s Shanghai Composite traded virtually flat and Japan’s Nikkei 225 fell 0.19%.
As for commodities, gold gained 0.6% to $1,787 per ounce and Brent crude oil futures were 0.6% lower to $72.63 a barrel.
CORPORATE NEWS
In company news, supermarket Tesco (TSCO) fell 1.8% to 277p even though it managed to continue growing sales in the 13 weeks to 29 May compared with a year earlier, despite that same period in 2020 being during the height of the first lockdown when supermarket shelves were stripped bare.
Sales in its UK supermarkets grew 0.5% to £10 billion - up 9.3% on the same period two years ago before the pandemic. Its wholesale division Booker saw the strongest growth, with sales up 9.2% to £1.77 billion as the leisure sector started reopening with lockdown restrictions easing in April and May.
Ken Murphy, chief executive, said: ‘We delivered a strong performance in the first quarter, even as we lapped the high demand of last year due to the pandemic. We have further strengthened our commitment to delivering consistent, reliable value and to rewarding loyalty, as we extended Clubcard Prices to all Express stores.’
Automotive distributor Inchape (INCH) gained 2.7% to 791p as it said it expected to deliver annual pre-tax profit ‘significantly’ ahead of market consensus as performance year to date had exceeded its expectations.
Market consensus for pre-tax profit was around £2.16 million. ‘We expect the strong first half performance will underpin our full year results,’ the company said.
But it added: ‘There is still a high level of uncertainty about the second half, both in terms of the pandemic situation and issues relating to supply due to shortages of semiconductors, which have had a limited impact on the group to date.’
Irish food company Kerry (KYGA) gained 3.5% to €109.70 after it reached an agreement to sell its consumer foods meats and meals business in the UK and Ireland to Pilgrim’s Pride for €819 million (£704 million).
Kerry said the proceeds from the sale would be used for general corporate purposes and the continued development of its taste and nutrition business.
AIM ROUNDUP
US-based advertising firm Tremor International (TRMR:AIM) fell 1.8% to 766p after announced it has raised proceeds of $128.6 million ahead of the stock market float of its ADS (American Depositary Shares) on the Nasdaq.
The company said it raised the funds through the issue of ADS representing around 13.5 million ordinary shares in the company at a price of $19 (£13.70) per ADS, each of which represents two ordinary shares in the group.
The pricing of the ADS was equivalent to 685p per ordinary Tremor share, a 12.2% discount to Tremor’s closing price in London on Thursday.
Biotech company Hutchmed (HCM:AIM) was flat at 386p after it said it was planning to raise more than $600 million through a secondary listing in Hong Kong.
Virtual reality technology company VR Education (VRE:AIM) fell 9.2% to 17.5p as it raised gross proceeds of £7.7 million through the sale of the shares at price of 16p per share. The company placed a total 48,350,191 shares, representing 20% of the company’s issued ordinary share capital.
