London’s FTSE 100 edged 0.25% higher to 7,190.61 points early on Wednesday as investors waited the latest decision on interest rates from the US Federal Reserve and the market took news of another sharp jump in inflation in its stride.
UK CPI rose by 2.1% in May on an annual basis, ahead of consensus expectations of 1.8% and coming in higher than the 1.5% rate in April, though investors were seemingly focused more on this evidence of economic recovery rather than inflationary risks.
Sterling rallied after the pick-up in inflation, which has been driven by the cost of fuel and clothing, with the pound advancing 0.3% against both the US dollar to $1.4119 and the euro at €1.1638.
CORPORATE NEWS
On a busy day for retail news, nearly-new car seller Motorpoint (MOTR) motored 4% higher to 290p as resilient full year results showed better than expected pre-tax profits of £9.7 million and the news trading has been strong since branches reopened driving earnings upgrades.
Motorpoint also outlined a bold strategy to at least double total sales to over £2 billion ‘in the medium term’, with ‘an improved margin and strong cash generation as we leverage the operating cost base’, including a target to grow online sales to £1 billion.
Also sitting pretty was value-centric sofas and carpets retailer ScS (SCS), which surged 10.3% higher to 320p on a surprise update, in which it said trading since re-opening its stores has been very strong and it now expects results for the year to July 2021 will beat market expectations.
Given management’s confidence in the business going forward, ScS also re-introduced dividends and said its outlook for full year 2022 is ‘substantially’ better than current market forecasts.
N BROWN CLOBBERED
Online clothing and homeware retailer N Brown (BWNG:AIM) cheapened 7.5% to 59p after disclosing that the potential cost of a spat between its JD Williams subsidiary and Allianz Insurance has been expanded, which if successful could lead to it paying out an additional £36 million of compensation as part of a customer redress exercise.
Castings (CGS) cheapened 3.8% to 382p as the iron casting and machining company reported a sharp decline in annual profit as revenue was hurt by the pandemic impact and supply chain issues.
And fryer management services business Filta (FLTA:AIM) firmed 2.5p to 181.5p after assuring that the recovery of its business in the UK won’t be impacted by the government’s decision to delay the full reopening by four weeks to July.
IN OTHER NEWS
Elsewhere, online competitions provider Best of the Best (BOTB:AIM) slumped 20% to £21 despite declaring a special dividend after reporting that annual profit more than trebled as the company benefitted from its transformation to an online-only operation.
However, investors were spooked as Best of the Best warned it has experienced ‘somewhat of a reduction in customer engagement’ since the latest easing of lockdown restrictions on 12 April 12, ‘specifically relating to the understandably long-awaited re-opening of hospitality and non-essential retail’.
Consultancy firm Elixirr International (ELIX:AIM) sparked up 3.7% to 565p after upgrading its outlook following a sales surge in the first five months of 2021.
Recruitment software and services company Dillistone (DSG:AIM) was marked down 8.3% to 22p, despite the company expecting to report ‘significantly reduced’ losses in 2021 amid signs of return to normal in several of its markets.
And Jangada Mines (JAN:AIM) was marked up 15.1% to 9.2p as the company updated the mineral resources estimate for its Pitombeiras operation in Brazil North.
