UK stocks continued to trade in positive territory through the morning, despite the release of figures from the Society of Motor Manufacturers and Traders showing a 34% slump in car registrations to the lowest level since September 1988.
The shock figure was a result of weak consumer confidence on the one hand and a widespread shortage of semiconductors coupled with supply bottlenecks on the other, impacting the availability of new vehicles.
At midday the FTSE 100 traded 0.6% higher at 7057 while the FTSE 250 Index gained 0.6% at 22,784.
OCADO/FLUTTER TOP RISERS
A surge in crude oil prices had only a marginal positive impact on the UK’s blue-chip index, which was led by Ocado’s (OCDO) near 3% rally to £16.99 and betting and gaming firm Flutter Entertainment (FLTR), which edged 1.2% higher after appointing a new chief executive to its FanDuel US business, which is being eyed covetously by rival DraftKings.
Engineer Melrose Industries (MRO) topped the FTSE loser board meanwhile with a 2% decline to 167p after it reported it had been hit by automotive industry-wide supply constraints, not least in microchips, which knocked its performance there and in its Powder Metallurgy division.
Talk of uncertainty over how long these constraints may last unsettled investors, although the company said it was confident the scale of the impact on profits from any revenue adjustment would be limited due to margin drop-through progress from the restructuring of its operations.
There was more encouraging news from high street food-to-go purveyor Greggs (GRG), which forecast a full-year outcome ‘ahead of our previous expectations’, even though it warned of rising cost pressures.
Greggs’ two-year like-for-like sales for the third quarter were up 3.5% despite staffing and supply chain disruption. The market liked the numbers, marking the shares nearly 9.8% higher at £31.56.
SMALLER CAP WRAP
Furniture and flooring retailer ScS (SCS) dropped nearly 6% to 256p even as it swung to a full-year profit, with talk of supply-chain challenges, including driver shortages, and higher material and shipping costs dragging on the stock.
ScS, which also reported a lower year-to-date order intake, declared a final dividend of 7p per share, upping the full-year payout to 10p, compared to no payout year-on-year.
Industrial laser technology developer Gooch & Housego (GHH:AIM) rallied 1.1% to £12.79 after guiding for full-year results to be ‘slightly ahead’ of expectations amid strengthening demand in the second half of its financial year.
Industrial and medical lasers were demonstrating a sustained recovery, the company said, while telecommunications and life sciences continue to perform well.
Logistics group Wincanton (WIN) jumped nearly 8% to 357p in response to its announcement that it was on track to meet profit expectations even as it grapples with the nationwide driver shortage.
In a trading update for the six months through September, Wincanton said it had continued to deliver ‘strong’ revenue growth and agreed rate changes in response to the supply constraints.
Upmarket chocolate retailer Hotel Chocolat (HOTC:AIM) advanced 10.5% to 447p, having swung to a full-year profit as sales growth accelerated following a re-opening of UK stores.
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