UK stocks traded lower on Tuesday, in spite of an advance in US markets and better than expected jobs numbers from the Office for National Statistics.
According to the latest data, the number of UK workers rose by 241,000 between July and August, sending employment back to levels not seen since the start of the pandemic.
By the close, however, the FTSE 100 of leading shares was down 34 points or 0.5% at 7,031 points, pulled lower by miners and bank stocks.
SALES RECOVERY
Shares in shoe and sports apparel retailer JD Sports Fashion (JD.) jumped 10% to £11.54 after it said first half revenues bounced back strongly, surging by 53% to £3.89 billion, while pre-tax profit jumped from £41.5 million to £364.6 million.
For the full year the firm forecast an ‘outturn headline’ pre-tax profit of at least £750 million. The company said it was encouraged by trading in the second half but cautioned footfall remained comparatively weak in many countries.
FIRE DAMAGE
Food retail and technology company Ocado (OCDO) reported a 10.6% fall in revenues to £517.5 million at its joint venture retail business with Marks & Spencer (MKS) over the 13 weeks to 17 August, as tough comparatives and disruption caused by the fire at its Erith CFC impacted trading.
Operating losses in the second half due to lost orders and write-downs of stock and fixed assets are expected to be around £10 million on a net basis after insurance payouts.
The company also flagged that rising labour costs could impact full year earnings by around £5 million. The company said it expected to deliver ‘strong’ revenue growth in 2022. Shares dropped as much as 7% initially but recovered to trade down 0.7% at £18.71 at the close.
ACQUISITION
Distribution and services group Bunzl (BNZL) announced it had agreed to acquire US-based safety business and a medical supplies distributor McCue Corporation, for an undisclosed sum.
Boston-based McCue, which also has operations in Australia and Singapore, would provide Bunzl with a strong position in a fast-growing market segment, the company said. The shares added 1.7% to £25.67.
Food retailer Morrisons (MRW) said its pension trustees had agreed in principle a support package with private equity group CD&R in relation to the scheme’s aims to be in a position to buy out the liabilities over the next 10-years.
Andrew Higginson, chair of Morrisons, said: ‘The board is pleased that the trustees and CD&R have engaged constructively and have now reached an agreement, which safeguards the interests of the members of Morrisons' pension schemes’. Shares edged up 0.1% to 291p.
RIDING HIGH
Train and bus ticket distributor Trainline (TRN) revealed ticket sales in the second quarter had recovered to 71% of same period in the 2020 financial year, their highest level since start of the pandemic.
The company expects first half adjusted EBITDA (earnings before interest, tax, depreciation, and amortisation) to be between £13 million and £15 million. The shares gave up earlier gains of 3% to trade 2% lower at 378p.
Alternative asset and corporate services provider Sanne (SNN), which recently agreed to be acquired by private equity buyer Apex, booked a 19% fall in first-half profit as currency headwinds squeezed its margins.
Pre-tax profit for the six months through June decreased to £9.4 million, down from £11.6 million year-on-year, even as revenue rose 8.1% to £90.7 million. The shares were unchanged at 910p.
OTHER NEWS
IT group Bytes Technology (BYIT) said first half adjusted operating profit grew by a high teens percentage driven by strengthened demand in the corporate sector alongside continued growth from the public sector. The shares closed down 0.9% at 526p.
Music products group Focusrite (TUNE:AIM) increased its annual earnings and sales guidance, although it cautioned it faced supply constraints due to the semi-conductor shortage and higher freight rates.
Revenue for the year through August was expected to rise to around £173 million, up from £130 million year-on-year and ahead of market expectations, the firm said.
Earnings before interest, tax, depreciation and amortisation also were expected to beat market expectations, it added. The shares were were down 1% at £17.15.
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