FTSE 100 Live Wednesday
- Kingfisher UK sales surge
- Pets at Home sees lower profit
- Thames Water record fine
Market update: FTSE 100 run continues, Pets at Home shares up 4%
10:13 , Graeme EvansIn-demand Rolls-Royce and BAE Systems today offset a 3% reverse for B&Q owner Kingfisher as the FTSE 100 index stayed in sight of record territory.
London’s top flight followed yesterday’s 0.7% advance by adding another 21.14 points to 8799.19, leaving it within 100 points of the all-time high close in March.
The risk-on mood followed rises of between 1.8% and 2.5% for US benchmarks after sentiment yesterday was boosted by optimism of a US-EU trade deal.
US futures are pointing to a session of consolidation later today as traders await the first quarter figures of tech giant Nvidia after tonight’s closing bell.
In the FTSE 100, the defence spending outlook continues to propel Rolls-Royce and BAE Systems to new records after their shares lifted another 15.8p to 867.4p and 28.5p to 1928.5p respectively.
They were joined on the risers board by Rentokil Initial, which added 3.3p to 357.5p after announcing the sale of its workwear business in France.
The deal with HIG Capital, which is expected to generate proceeds of 370 million euros, is part of moves by Rentokil to focus its portfolio on pest control and hygiene.
Kingfisher fell 7.8p to 288p, even though UK and Ireland sales jumped 5.9% on a like-for-like basis in the first quarter of its financial year.
The performance by the B&Q and Screwfix owner was boosted by favourable weather conditions, prompting speculation in the City that some seasonal sales may have been brought forward from the current quarter.
There was also disappointment over the latest decline for Kingfisher’s Castorama and Brico Depot division in France, although the company pointed to a quarter-on-quarter improvement.
Reiterating guidance for the year, chief executive Thierry Garnier said: “It is still early in the year and consumer sentiment remains mixed across our markets.”
Other fallers in the FTSE 100 included private equity group 3i, which dropped 53p to 4084p, and Legal & General after a reverse of 1.7p to 241.8p.
The FTSE 250 index rose 66.27 points to 21,004.85, aided by a positive response to the full-year results of Pets at Home.
The retailer rose 4% or 9.4p to 271.8p as trading in its veterinary services business helped to deliver annual profits in line with expectations at £133 million.
This was 0.7% higher than last year although the group is braced for a fall to between £115 million and £125 million in the current financial period.
Peel Hunt, which reiterated a Buy recommendation with a price target of 300p, described the update as solid: “We see material strategic value here, but forecast momentum is flat.”
FTSE 100 higher, Rentokil disposal boosts shares
08:46 , Graeme EvansRentokil Initial shares are top of the FTSE 100 index after the company announced the sale of its workwear business in France.
The deal with HIG Capital, which is expected to generate 370 million euros, comes as Rentokil steps up the focus of its portfolio on pest control and hygiene.
The shares rose 2% or 7.2p to 361.45p, still 10% lower for this year.
The FTSE 100 index followed yesterday 0.7% improvement by adding another 15.55 points to 8793.60.
BAE Systems and Rolls-Royce added another 29.5p and 15.8p respectively, moving them deeper into record territory at 1929.5p and 867.4p,
In the FTSE 250, Pets at Home shares recovered from a weak start to stand 6.8p higher at 269.2p. It reported annual results in line with expectations but also forecast weaker underlying profits for this year.
Kingfisher shares fall despite UK progress
08:32 , Graeme EvansKingfisher shares have fallen 3p to 292.8p after the B&Q owner’s strong trading performance in the UK was offset by further sales weakness in France.
Total sales of £3.3 billion for the first quarter represented growth of 3.1% when adjusted for calendar impacts, with the UK 6.2% higher and the Castorama and Brico Depot division in France down 3.2% on a constant currency basis.
The shares have rallied by 17% so far this year.
Richard Hunter, head of markets at Interactive Investor, said it seemed unlikely that the market consensus of the shares as a hold will be boosted until more measurable and sustained progress can be demonstrated.
He added that the favourable weather which led to a spike in seasonal products in the UK may also have resulted in some customer purchases being brought forward, implying that numbers in the second quarter could marginally suffer.
Hunter said: “Caution prevails at Kingfisher despite an opening quarter which saw the group exceeding estimates.”
Pets at Home braced for lower profit
07:56 , Graeme EvansPets at Home today reported flat annual profits of £133 million after strong trading in its veterinary business was offset by sharply lower retail revenues.
Vet Group profit of £75.9 million rose 23.3% following a 13% increase in revenues to £655.1 million for the year to 27 March.
Retail underlying profit of £72.9 million slid 16.6% after subdued conditions in the pet sector contributed to a 1.8% decline in revenues to £1.3 billion.
The first six weeks of the new financial year have begun as expected, with the group’s current view of demand and costs resulting in a forecast for lower profits of between £115 million and £125 million.
Chief executive Lyssa McGowan said: "The past two years have seen a profound transformation at Pets at Home. We have moved from a business with a strong presence in pet retail and vets, to a true pet care platform.”
Thames Water handed record Ofwat fines
07:37 , Graeme EvansThames Water has been handed record fines totalling almost £123 million following two investigations into the company by the industry regulator.
Ofwat said Britain’s largest supplier will have to pay £104.5 million for breaking rules relating to waste water. It is the biggest fine the watchdog has ever issued.
Thames Water, which is trying to seal a takeover deal to stabilise its finances, will also pay an additional penalty of £18.2 million for breaches of rules relating to dividend payments.
Ofwat said the fines have to be paid by the company and its investors, and not passed on to customers.
Kingfisher hails strong UK trading, on track for year
07:16 , Graeme EvansThe B&Q and Screwfix business Kingfisher today said it had traded particularly well in the UK and Ireland, with like-for-like sales up 5.9% on a year earlier.
Kingfisher, which also has operations in France and Poland, posted a group-wide figure of 1.8% for the first quarter of its financial year to 30 April.
Total sales of £3.3 billion were 1.6% higher, keeping the FTSE 100-listed company on track to meet full-year guidance.
Chief executive Thierry Garnier said: "Our UK banners performed particularly well, driven by strong seasonal sales and growth in trade and e-commerce.”
He added: “It is still early in the year and consumer sentiment remains mixed across our markets.”
FTSE 100 set to consolidate gains, US stocks rally
07:02 , Graeme EvansLeading US benchmarks last night closed between 1.8% and 2.5% higher as Wall Street followed Europe’s lead during a strong start to the trading week.
Stock market sentiment was boosted by optimism of a US-EU trade deal, as well as better-than-expected US consumer confidence figures.
The FTSE 100 index earlier rallied 0.7% to finish at 8778.05, leaving London’s top flight within 100 points of the record close set in early March.
Futures trading points to a session of consolidation on both sides of the Atlantic later today as attention turns to Nvidia results after the US closing bell.
Asia markets have posted a mixed performance, with the Hang Seng index down 0.6% and the Nikkei 225 up 0.3% in afternoon trading.
