London’s FTSE 100 opened higher on Wednesday after groceries giant Tesco (TSCO) delivered a rise in first-half profits and upped its dividend.
At 8.30 am, the blue chip benchmark was up a modest 5.6 points at 5,955.5, while the FTSE 250 edged ahead 0.17% to 17,828, despite Donald Trump’s decision to abruptly end talks with Democrats on a new Covid-19 stimulus package.
Britain’s biggest supermarket Tesco ticked up 2.4% to 219p after serving up a better-than-expected 29% rise in first-half pre-tax profit to £551 million, although operating profit was lower amid a rise in Covid-related costs, while also hiking the dividend.
In its first results presented by new chief executive Ken Murphy, Tesco reported 7.2% like-for-like sales growth in its UK & Republic of Ireland business.
In terms of the outlook, Tesco expects ‘a broadly even balance to the year in terms of 1H/2H retail profitability. Whilst significant uncertainties remain, we now expect retail operating profit in the current year to be at least the same level as 2019/20 on a continuing operations basis’, although Tesco Bank is expected to post a loss of between £175 million and £200 million.
Security giant G4S (GFS) softened 0.2% to 201.5p after once again spurning an offer from GardaWorld on the grounds the hostile bid ‘continues to significantly undervalue the company’.
Retailer Frasers (FRAS), formerly known Sports Direct, fell 1.9p to 359p after urging shareholders to vote in favour of a £100 million bonus scheme that could see employees receive cash or share bonuses if performance targets are met.
Vertu Motors (VTU:AIM) accelerated 6% higher to 33.4p, despite posting a 75% first-half profits plunge, as the automotive retailer said performance had bounced back strongly after lockdowns were eased.
Racing games developer Codemasters (CDM:AIM) sped 9% higher to 391p on news it expects first-half revenue and earnings to more than double, thanks to the launch of new games.
‘Trading in H1 2021 benefited from the launch of F1 2020, Fast & Furious Crossroads, Project CARS 3, and continued sales of the company’s back catalogue of games - in particular F1 2019 and DiRT Rally 2.0,’ said Codemasters, which expects its F1 2020 title to ‘perform strongly throughout the Black Friday, Christmas and New Year promotional periods’.
Online women’s fashion retailer Sosandar (SOS:AIM) jumped 10% to 16.5p as it guided for a substantial narrowing in first-half losses amid a 52% rise in sales.
Inkjet printing technology group Xaar (XAR) fell 3% to 130.5p after it revealed it was the victim of a cyber attack that involved unauthorised access to its computer systems.
