Sector movers: Retailers rise after results impress
The retailers were in demand on Thursday afternoon, defying a generally gloomy outlook for the UK consumer, after some pleasing results from giants Morrison and Home Retail Group.
Supermarket chain Morrison’s focus on value – and longer opening hours – helped it post sales and profits ahead of expectations in the half year to 31 July. Pre-tax profits rose from £412m to £449m, while like-for-like (LFL) sales rose by 2.2%, surpassing Panmure Gordon’s estimates of £440m and +2%, respectively.
“In a tough economy shoppers are looking for unbeatable value on fresh food, great deals on national brands and the best prices at the petrol pump,” said chief executive Dalton Philips.
Helping the general retailers higher was Argos and Homebase owner Home Retail Group. Even though Argos - which is by far the bigger operation – registered a 7.1% LFL decrease in sales to £859m, the rate of decline slowed to 8.6% from 9.6% in the first quarter. However, its smaller operation Homebase, saw a decline of 3.1% in LFL sales to £382m.
Helping the FTSE 250 stock were comments from Seymour Pierce, which upgraded Home Retail from sell to hold.
Laura Ashley, the homeware and ladies fashion chain, also bolstered gains for the general retailing sector, after pre-tax profits (excluding exceptional items) climbed from £5.7m to £7.3m in the half year to 30 July. Total sales climbed by just 0.1% to £135.3m, but the closures of unprofitable shops helped drive like-for-like sales up by 3.5%
Meanwhile, a 2.59% share price fall for FTSE 250 food manufacturer Premier Foods was dragging down the food producing and processing sector.
Plant-based sweetener maker and sector peer PureCircle, which yesterday announced that it is expanding its European presence with the opening of a new European headquarters in London, was also in the red.
Top performing sectors so far today
Technology Hardware & Equipment 708.91 +2.16%
Food & Drug Retailers 4,455.78 +1.72%
Forestry & Paper 5,741.13 +1.43%
General Retailers 1,504.60 +1.35%
Oil Equipment, Services & Distribution 21,833.60 +1.27%
Bottom performing sectors so far today
Industrial Metals & Mining 5,859.43 -1.60%
Food Producers & Processors 5,264.95 -1.37%
Electricity 8,111.14 -0.87%
Gas, Water & Multiutilities 4,635.06 -0.70%
Automobiles & Parts 4,418.94 -0.53%