Proactive Investors -
- FTSE 100 up 51 points to 8,092
- BHP makes bid for Anglo American (JO:AGLJ)
- AstraZeneca (NASDAQ:AZN), Unilever (LON:ULVR) and Barclays (LON:BARC) rise
Sainsbury’s non-food exposure still a lag - analyst
J Sainsbury PLC (LON:SBRY)’s results appeared to be overshadowed by a fall in general merchandise sales over the course of last year, analysts have pointed out.
FTSE 100-listed Sainsbury’s had said underlying profit would top £1 billion this year as it hailed progress in its strategic shift toward prioritising grocery sales.
However, shares fell 1.1% on the update, which showed pre-tax profit grew 1.6% to £701 million on stronger grocery sales, as general merchandise and clothing revenue fell 0.5% and 6.4% respectively.
“Despite the positivity, Sainsbury’s does carry much higher exposure to general merchandise, which isn’t faring so well,” Hargreaves Lansdown’s Sophie Lund-Yates said.
This includes through the likes of Argos, and the supermarket’s clothing and homeware brands, Tu and Habitat.
Lund-Yates added sales had been downtrodden “partly because of where we are on the economic merry-go-round,” but may also have partly reflected “specific stocking decisions”.
9.08am: WH Smith (LON:SMWH) falls as high street struggle eats into profit
WH Smith PLC (LSE:SMWH) fell 7.8% on Thursday morning after unveiling a fall in interim operating profit.
Group pre-tax profit fell from £45 million to £28 million in the six months to February, the retailer announced on Thursday.
This was in spite of an 8% jump in revenue to £926 million, fueled by a 13% increase from WH Smith’s travel business, which has shops in the likes of airports and train stations.
Travel profit climbed 6% to £50 million, but fell 8% to £22 million in WH Smith’s high street business as revenue declined.
“The struggle on the high street is likely to persist, with our experts forecasting continued decreases in like-for-like sales,” Third Bridge analyst Yanmei Tang commented... Read more
The morning so far
The FTSE 100 index is on the front foot again amid a packed day for company news.
Blue chips including AstraZeneca, Barclays, Sainsbury’s and Unilever all delivered a top set of financial results, leading to low-to-mid-single-digit rises in all of their share prices.
But it was Anglo American that led the risers with a walloping 13% rally on its share price.
This follows a shock bid approach from BHP Ltd. Terms of the offer were not disclosed, though Anglo, valued at £29 billion, said the deal would require the demergers of its platinum and iron ore businesses.
Anglo called it an “unsolicited, non-binding and highly conditional” all-share buyout proposal.
The London Stock Exchange Group (LON:LSEG) used a trading update to tout the benefits of the capital markets and data group’s partnership with Microsoft (NASDAQ:MSFT).
Chief executive David Schwimmer noted “strong progress in our Microsoft partnership, with a number of products expected to be in external pilot or general release this half”.
LSEG shares, however, didn’t join the party, instead dipping 0.3%.
Housebuilder Persimmon (LON:PSN) saw new home completions fall slightly in the first quarter on a year-to-year comparison, though this was in line with expectations. Shares were up 0.8%, buoyed by a forward order book up 18%.
On the macroeconomic front, UK car production presented some fairly glum figures.
Year-on-year production declined 27.1% to 59,467 units in March 2024, breaking six consecutive months of growth.
But that was a sideshow to the string of quality earnings prints, leading the FTSE 100 to add 40 points to 8,080 at the time of writing. This is just seven points off the all-time high achieved yesterday.
Stocks bounce higher
The FTSE 100 bounced higher in early exchanges despite opening flat at 8am.
At the time of writing, the blue-chip index was up 38 points to 8,078, nearing yesterday’s all-time high.
A robust set of results from FTSE 100 constituents has supported the market.
Top morning risers include Anglo American (thanks to a shock bid from BHP), AstraZeneca, Unilever and Barclays.