FTSE 100 Live 5 June: Index higher but Centrica falls, WHSmith in robust update
Retail trading conditions are in focus today after discounter B&M and the travel-focused chain WH Smith updated investors.
Centrica’s AGM and the prospect of an interest rate cut by the Bank of Canada are among other areas of interest.
The inflation outlook has been boosted by a drop in the price of oil, with Brent Crude today still well below $80 a barrel.
FTSE 100 Live Wednesday
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Cadogan boss hails ‘enlightened self-interest’ as income and values at £5bn Chelsea estate grow
The boss of Cadogan, Chelsea’s largest landlord, hailed the family-owned property group’s “enlightened self-interest” as income grew from the group’s estate in some of London’s most exclusive areas.
Cadogan Estates, which manages the Cadogan family’s portfolio of land, including much of Sloane Street and the Kings Road, brought in £216 million of income. The value of the portfolio edged up by 3% to £5.4 billion.
said the landlord’s “enlightened self-interest” helped ensure that Cadogan was making the best long-term choices for the area.
B&M shares slide as results leave analysts with 'more questions than answers'
Analysts said results from discount retailer B&M left them with “more questions than answers” today, as the chain offered little insight into current trading despite a strong performance in the year to 31 March.
Profit for the year rose to almost £500 million as revenue grew by 10% to £5.5 billion. But there were signs of growth slowing during the first three months of 2024.
Analysts at Investec said guidance on B&M’s performance in recent weeks would have been helpful, as the business is lapping tough comparatives.
FTSE 100 higher despite Lloyds and Centrica weakness
Centrica shares are down 5% or 6.7p to 134.6p, even though the British Gas owner said its year-to-date performance has met expectations amid the return of more normal trading conditions.
Lloyds Banking Group also lost half a penny to 55.1p and Barclays dipped 2.3p to 212.7p but the FTSE 100 index is still 17.61 points higher at 8249.65.
Smith & Nephew rose 40.8p to 1036p after UBS said shares in the medical devices maker looked cheap at a near five-year low. Taylor Wimpey also lifted 2.55p to 152.35p thanks to the Buy stance of analysts at Berenberg.
The FTSE 250 index improved 52.38 points to 20,770.37, with Paragon Banking Group among the frontrunners after a 3% results-day surge.
The buy-to-let lender added 20p to 790p after a 13.5% rise in half-year underlying profits led to improved guidance for 2024. It also announced a 20% hike in interim dividend.
Budget retailer B&M enjoys higher sales after opening nearly 50 new stores
Budget retailer B&M is planning to roll out hundreds of new stores across the UK after seeing its yearly sales grow as cash-squeezed consumers hunted for deals.
B&M European Value Retail, which sells a range of household products, DIY, food and clothing, said the past year was a turning point in its ambitious expansion plans.
Total group revenues jumped by a 10th in the year to the end of March, compared with the previous year, the company reported.
Zara owner shares rise as Ukraine stores reopen
Zara owner Index has said it had begun reopening stores in Ukraine as the fashion giant reported a jump in profits.
The firm, which also owns the Pull&Bear and Massimo Dutti brands, said it had opened 19 stores in the war-torn country at the beginning of April, rising to 48 by the end of the month as well as the resumption of online sales.
Inditex previously had 85 stores in Ukraine but suspended operations following the invasion of Russia in 2022. But it said 34 sites are located in areas directly affected by the war in south and east Ukraine, where the government has blocked commercial operations.
The Spanish company today reported a 7% rise in sales in the three months to end April to €8.2 billion (£7 billion), while pre-tax profits climbed 11% to €1.7 billion.
Robyn Duffy, senior analyst at RSM UK, said: C”entral to Inditex's success is its fashion-forward approach, allowing the business to pitch itself at the higher end of the fast-fashion market with higher prices to reflect its position.”
Inditex shares rose 4.3% to €45.83.
B&M and Centrica lower in FTSE 100, Paragon jumps 8% in FTSE 250
The FTSE 100 index is 17.18 points higher at 8249.22, short of earlier hopes due to further weakness for commodities-focused stocks.
B&M European Value Retail shares also posted a results-day fall of 4% or 20.6p to 525.8p, with British Gas owner Centrica 4.25p weaker at 138p after an in-line AGM trading update.
Smith & Nephew is the best performing blue-chip stock, up 31.3p to 1026.5p, and GSK has rallied after recent weakness to stand 30.5p higher at 1645.5p.
Taylor Wimpey is 2.7p stronger at 152.5p after Berenberg analysts gave the housebuilder a “Buy” recommendation and new target price of 175p.
The FTSE 250 index rose 64.68 points to 20,782.67, led by Paragon Banking Group after the buy-to-let lender’s shares jumped 8% or 64p to 834p on the back of improved guidance in half-year results.
WH Smith shares have risen 33p to 1176p, boosted by another strong performance in its travel division in today’s quarterly update.
Ramsdens ups dividend after solid growth
A jump in demand for holidays to Turkey helped pawnbroker Ramsdens to another period of sales and profits growth as it eyes further store expansion.
The Middlesbrough-based business, which buys and sells gold and offers a foreign currency exchange service, upped its dividend by 9% to 3.6p after sales rose 12% to £43.8 million for the six months to end March. Three new stores are in the pipeline to open.
CEO Peter Kenyon said: “Holidays are usually the last thing people give up on their wish list. Our currency sales are up and people are clearly spending it as we purchase back a lot less after their trip.
“The destination that’s creeping up the list is Turkey – it’s become more affordable to holiday there.
Shares rose 3.2% to 204p.
WH Smith bullish over summer season as travel sales continue to rise
Retailer WH Smith has said it is well set for the peak summer holiday season as buoyant sales across its travel sites continue to offset slower trading in its high street arm.
The group posted like-for-like sales growth of 4% for the 13 weeks to June 1, with a 5% rise across global travel stores and a 1% drop for its high street business.
But the figures showed a slowdown from the 15% sales growth notched up in the first half across its travel shops based in railway stations, airports and hospitals worldwide.
Bank of Canada seen cutting key interest rate
The Bank of Canada is today set to announce a 0.25% cut in interest rates, a day before the European Central Bank is forecast to do the same.
Canada’s key lending rate currently stands at 5% but easing wage pressures and weaker trends on core inflation mean this is expected to fall to 4.75%.
Economists at Bank of America have forecast a year-end level of 3.75%, although uncertainty over the Federal Reserve policy outlook means there’s a risk the first move could be put back to July and for a more gradual pace.
Switzerland’s central bank has already cut interest rates, with the European Central Bank set to reduce from 4.5% to 4.25% at its meeting tomorrow.
FTSE 100 seen higher after US rebound, Brent Crude below $78
FTSE 100 futures trading is pointing to a stronger session for London’s top flight, boosted by a turnaround in fortunes for US markets yesterday.
The Wall Street recovery was fuelled by signs of a cooling US jobs market, which has made traders more optimistic on interest rate cuts later this year.
Lower oil prices have also improved the inflation outlook, with Brent Crude still below $78 a barrel this morning after a run of price falls over the past week.
The S&P 500 index finished 0.15% higher and the Dow Jones Industrial Average rose by 0.4%, setting the tone for today’s positive session in London.
The FTSE 100 is forecast to open up by about 0.7% or 61 points this morning, having closed 30.71 points lower at 8232.04 in yesterday’s session.