The FTSE 100 started Friday’s trading session in negative territory, opening marginally lower at 7047.91 points.
This followed a distinctly muted performance in American equity markets and weakness overnight in Asia, with the Nikkei, Hang Seng and Shenzhen Indices also closing lower.
In the UK, attention was focused on the latest UK retail sales figures which revealed a marked decline in food store sakes last month as customers took advantage of the easing of social restrictions, and returned to hospitality venues.
Retail sales declined by 2.5% during June and July, however they were 5.% ahead of pre-pandemic levels. The -2.5% headline figure compared with a consensus analyst forecast figure of +0.2% for the month. An interesting feature of the data is the continued trend towards retail sales occurring digitally. The proportion of digital retail sales increased from 27.1% in June to 27.9% in July.
COMPANY NEWS
Food and clothing retailer Marks & Spencer (MKS) was marked up 10.8% to 158.2p as it upgraded earnings guidance in a trading statement for the 19 weeks to 14 August.
The retailer is on track to exceed the top end of its previously outlined profit guidance of £300-£350 million for the year. Food sales increased by 10.8% for the 19 weeks to August, and were ahead 9.6% on the comparative 2019 period.
Clothing sales were 92.2% ahead of last year’s figures, although down 2.6% on the comparable 2019 period. A costs reduction programme has helped to offset both increased staff costs, supply disruption, and cost inflation.
Food retailer Morrisons (MRW) firmed 4.3% to 291p after agreeing to an improved offer of 285p from American private equity group Clayton Dublier and Rice (CD&R), which compares to its previous offer of 230p a share and rival offer of 270p a share (plus a special dividend of 2p), from Fortress.
Supermarket rivals Sainsbury’s (SBRY) and Tesco (TSCO) were marked up 1.75% and 0.84% respectively in early trading in response to the earnings upgrade announced by Marks and Spencer and the improved agreed offer for Morrisons.
Specialist lending and retail savings group OneSavings Bank (OSB) announced interim results for the six months to June which revealed a sharp increase in profitability.
On a statutory basis profit before tax increased to £221.9 million compared to £99.3 million for the comparable prior year period. The shares were trading 1.4% lower in early trading.
AND ELSEWHERE
Pharmaceutical giant AstraZeneca (AZN) traded 0.7% lower at 8667p following two contrasting news updates.
On a positive note the company announced a positive update on its Covid-19 antibody combination. However this positive news was to some extent offset by news that its rare disease business Alexion is terminating trials of a drug candidate for amyotrophic lateral sclerosis, a rare neurodegenerative disease due to a lack of efficacy.
