London’s FTSE 100 softens 70.2 points to 7,567 on Monday, the UK stock market following parts of Asia lower with weak oil prices dragging shares in Royal Dutch Shell (RDSB) and BP (BP.) lower, as well as many of the big mining stocks.
Groceries goliath Tesco (TSCO) cheapens 0.9p to 255.8p, despite announcing a potentially interesting strategic alliance with France’s Carrefour, a likely response to J Sainsbury’s (SBRY) planned merger with Asda, competition from Aldi and Lidl and the inroads into the industry being made by US tech titan Amazon.
The global purchasing alliance, which will be formally agreed within the next two months, will help both retailers to cut costs and lower prices. ‘By working together and making the most of our collective product expertise and sourcing capability, we will be able to serve our customers even better, further improving choice, quality and value,’ enthuses Tesco CEO Dave Lewis.
Vedanta Resources (VED) surges 26.2% higher to 816p as chairman Anil Agarwal’s family trust Volcan Investments agrees to buy the rest of the mining conglomerate it doesn’t already own in an all cash deal priced at 825p and valuing the company at over £2.3bn.
Aerospace and defence engineer Meggitt (MGGT) is marked up 3.8% to 512.2p after upgrading its 2018 organic revenue growth guidance to a range of 4-to-6%, up from 2-to-4% previously, helped by stronger than expected second quarter trading with good growth across its civil aftermarket, military and energy market segments. Though Meggitt tempers full year operating margin expectations, investors also welcome news of a divisional rejig to support plans to accelerate growth.
Also in demand is Micro Focus (MCRO), bid up 45.5p or 3.4% to £13.69 after agreeing to sell its SUSE Business to private equity for $2.535bn, a move that will sharpen the focus on infrastructure software assets and help Micro Focus pay down debt.
A profit warning from FTSE 250 gambling technology group Playtech (PTEC) sends the shares down 26.4% to 554.4p amid heightened competition and industry price pressures in Asia. These problems have taken a bite out of earnings and triggered Playtech’s second profit warning in a year.
Plus500 (PLUS) powers ahead by 4% to £16.79 after once again materially upgrading full year expectations for the year ending 31 December 2018, the online service provider for trading CFDs saying its recent financial performance has been boosted by higher than expected levels of market volatility.
There’s a nightmare start to the week for investors in Eve Sleep (EVE:AIM), the premium memory foam mattress business slumping 59% to 28.5p. This follows the news first half sales fell short of expectations amid a challenging backdrop for consumer spending and management missteps, triggering the shock departure of CEO Jas Bagniewski.
Fresh cream cakes retailer Cake Box (CBOX:AIM) sweetens up 7.3% to 147.5p after a positive write-up in the weekend financial press. The fast-growing franchise business made its AIM debut on Wednesday at an issue price of 108p, with CEO Sukh Chamdal confident his charge has ‘all the ingredients to continue to grow our franchise estate to 250 stores and further expand our slice of the sizeable UK cake market, with a unique customer proposition and limited direct competition.'
