UK supermarket leader Tesco (TSCO) saw pre-tax profits rise 2% to £564m for the half year to 25 August with sales up 12.8% to £28.3bn. But while chief executive Dave Lewis described the performance as a ‘good start to the year’, investors disagree.
Shares in the group plunge around 5% to 224.3p in early trade, heading the FTSE 100 loser board. That’s because of the underlying operating profits increase of 24.4% to £933m coming in below analyst expectations, weaker thanks to poor performance in mainland Europe and Asia.
Tesco, which recently launched its own discount chain called Jack's in a bid to fend of intense competition from Lidl, Aldi and other discounters, has made a hefty hike in the interim dividend, which jumps 67% to 1.67p a share.
Bookie Paddy Power Betfair (PPB) is Wednesday biggest FTSE 100 winner, chalking-up a 1.5% gain at £66.65, lending support to a marginally positive wider blue chip index, which rises about 16 points in early trade to 7,490.67.
JAMES BOND’S CAR MAKER DEBUTS
Prestige car maker Aston Martin Lagonda (AML) made its debut on the London stock market on Wednesday after confirming its offer price for shares at £19.00.
But it’s a slow start to say the least with early trades marking the stock down at £18.102, presumably as IPO investors that had hoped for an encouraging start of trade pop sell out with that bump higher not happening.
The £19.00 offer had valued the business at £4.33bn meaning it was always likely to struggle to qualify for the FTSE 100 index at the next reshuffle, made all the more unlikely now.
Aston Martin, which has floated 27.5% of its business, had originally set a £17.50 to £22.50 range for its stock market flotation, pricing that was subsequently narrowed to between £18.50 and £20.00.
After surprisingly strong sales from furniture chain ScS (SCS) yesterday it is the turn of Topps Tiles (TPT) to pleasantly shock retail watchers. The home improvement and trade supplier said that trading showed signs of improvement in the final quarter of its financial year, with like-for-like sales up 1.2%.
The company says that for the full year to 29 September, like-for-like revenue was flat compared to a 2.9% fall in the previous 12 months. Topps Tiles now expects adjusted pre-tax profits to be ‘slightly ahead’ of the top end of expectations, which had been pitched at £15.5m, according to data from Reuters.
Word that trading is not as bad as many anticipated goes down very well with investors, sending Topps’ shares soaring more than 10% to 69.1p, valuing the business at close on £135m. That is, however, still a far cry from the 93p levels of March and 165p of three years ago.
INVESTORS GET FX SCARE AT ITE
Exhibition organiser ITE (ITE) sees its share price slump more than 5% to 71.2p after spooking investors over currency effects on profits this year. That’s largely thanks to its large exposure to struggling emerging markets, including Russia and Turkey.
On a brighter note, ITE does now expects like-for-like annual revenue to rise 10%, helped by its focus on core markets under an ongoing transformation plan.
On a related note, British business-to-business information company Euromoney (ERM) said on Wednesday it would sell Mining Indaba, the world’s largest mining investment conference, to ITE in a £30.1m deal.
Shares in Euromoney, still 49% owned by Daily Mail & General Trust (DMGT), remain flat at £13.40.
Gold prices edged up on Wednesday after gaining over 1% in the previous session, buoyed by safe-haven demand as Italy’s budget plan sets it on course for a potential clash with the European Union.
Oil prices were firm on Wednesday on expectations of tighter markets once US sanctions target Iran’s petroleum industry from next month, although a strong dollar and rising US crude supply curbed gains.
