UK stocks are mostly treading water on Wednesday ahead of yet another Brexit Summit in Europe and a meeting of the European Central Bank. The FTSE 100 is unchanged on last night's close at 7,427 points while the FTSE 250 is up a smidge at 19,463 points.
Supermarket giant Tesco (TSCO) reports full year sales and margins which are above its own forecasts, under-pinning the stock’s recent strength and sending the shares up 1% to 236p.
Sales including Booker were up 11.5% to £56.9bn in the 12 months to the end of February while the group operating margin was almost 4% in the second half of the year, a level which chief executive Dave Lewis called ‘aspirational’ four years ago.
Online fashion retailer ASOS (ASC) delivers a 14% rise in first half sales to £1.3bn and confirms its full year targets, sending the shares up 6% to £33.30.
‘ASOS is capable of a lot more. We have identified a number of things we can do better and are taking action accordingly’ says chief executive Nick Beighton.
Homewares retailer Dunelm (DNLM) is also having a good day with shares up 3% to 890p after the company reports third quarter sales up 12.4% £284m supported by in-store like-for-like sales up an impressive 9.8%.
Margins increased thanks to better sourcing at the core business and the closure of the money-losing Worldstores business.
Continuing the positive consumer theme, shares in leisure group Hollywood Bowl (BOWL) gain 2% to 225p after the firm announces solid first half revenues driven by like-for-like growth of 4.4%.
On top of growing sales at its existing sites, the company has rolled out two new centres in the first half taking it to a total of 60. The latest centre, at the Lakeside shopping centre in Essex, is the largest bowling centre to open in the UK in the last 10 years.
There’s no good news for Sports Direct (SPD) founder Mike Ashley however. As well as losing an estimated £150m on his 30% shareholding in Debenhams (DEB) as its lenders take control, his attempt to take over Findel (FDL) has hit the rocks.
Just 1% of shares in Findel were tendered at 161p which, combined with Sports Direct’s holding means acceptances were less than 38%, far short of the level needed for the offer to be declared unconditional.
Sports Direct shares are flat at 284p while Findel shares dip 1% to 162p.
Also licking its wounds today is bus and rail operator Stagecoach (SGC) which has been disqualified from all three current rail franchise competitions.
The Department for Transport (DfT) has verbally told Stagecoach that its bids for East Midlands, South Eastern and West Coast, were non-compliant ‘principally in respect of pensions risk’ according to the company’s statement. Shares slip 3% to 129p.
To add insult to injury, the DfT announced today that it has selected Netherlands-based operator Abellio to run the next East Midlands rail franchise from this August.
The worst-performing stock today by a mile is Indivior (INDV) with shares down 57% to a record low of 46p after the firm was indicted by a US grand jury for what it claims was fraudulent marketing of its Suboxone Film.
The Department of Justice claims that while Indivior was still owned by Reckitt Benckiser (RB.), it engaged in ‘an illicit nationwide scheme to increase prescriptions of Suboxone Film’, obtaining ‘billions of dollars in revenue by deceiving health care providers and health care benefit programs into believing that Suboxone Film was safer, less divertible, and less abusable than other opioid-addiction treatment drugs’.
Shares in Reckitt Benckiser fall 5% to £61.00 on the back of today’s news.
