Ahead of its first quarter figures a week today, Tesco is leading the FTSE 100 risers.
The supermarket’s shares are up 5.1p to 214.6p in the wake of reports that Google had teamed up with UK private equity firm Permira to bid for Tesco’s data business Dunnhumby. The two are said to be on a long list of 10 parties to buy the division, which runs Tesco’s Clubcard and could be worth as much as £2bn.
Still in the sector Ocado has added 2.2p to 386p despite a sell note from Deutsche Bank:
Ocado is due to report first half results on 30 June. Since signing its first joint venture with Morrisons two years ago, the focus of Ocado’s next potential licensing deal has narrowed in on the US grocery market and given management’s target to sign its first “Ocado Smart Platform” client in 2015, confirmation of being on or off track in this regard, is likely to be as big a share price driver as the results themselves.
In terms of the results, we expect Ocado’s UK retail business to come under increasing gross margin pressure as the Big 4 continue to invest in prices and find it difficult to place a higher value on the licensing business, when the profitability of the underlying retail business remains unproven.
