London’s FTSE 100 was 0.9% higher at 7,028.1 points by lunchtime on Friday, supported by gains in the US and a positive retail sales report for last month.
Wall Street closed higher with the Nasdaq posting a new high led by Big Tech stocks, although trading was choppy as higher jobless claims raised doubts about the pace of economic recovery. Alphabet, Amazon, Apple, Facebook and Microsoft are due to report quarterly earnings next week.
Brent crude oil climbed $1.50 overnight to $73.80 per barrel on expectations that second half demand would outstrip supply, despite an agreement by OPEC+ to boost production by 400,000 barrels per day from August.
A rise in UK retail sales in June bucked predictions of a drop and regained some of May’s significant decline as England’s Euro 2020 success drove up food and alcohol sales.
Shares in mobile network operator Vodafone (VOD) was the biggest riser on the FTSE 100, gaining 2.7% to 119.2p after the company posted 3.3% growth in first quarter organic service revenues, comfortably beating market forecasts of a 1.9% rise, and said it was on track to deliver on its FY22 profit guidance issued in May.
Chief executive Nick Read highlighted the return to growth in service revenues in Europe and Africa: ‘This growth was broad-based within both consumer and business segments, with the vast majority of our markets contributing’.
Defence equipment maker Ultra Electronics (ULE) revealed it had received an all-cash offer of £35 per share from rival Cobham, with shareholders also entitled to the 16.2p per share interim dividend announced by Ultra earlier this month.
The firm said it had indicated to Cobham that the bid was ‘at a value the Board would be minded to recommend to Ultra shareholders, subject to consideration and satisfactory resolution of other terms and arrangements, including the establishment of safeguards for the interests of Ultra's stakeholder groups’. Shares jumped 33% to £32.84.
Bisto gravy and Mr Kipling cake-maker Premier Foods (PFD) reported a strong start to the year with first quarter sales up 6.3% on the same period of 2019, at the top end of its expectations, led by branded goods sales with 9.3% growth.
The firm’s expansion into new product ranges using well-known brands is also bearing fruit and the firm now expects full year pre-tax profits to be at the top end of estimates. Shares rose 3.6% to 109p.
Thanks to the release of $95.7 million of prior-year reserves, on top of the jump in premiums, first half pre-tax profits were $167.3 million against a loss of $13.8 million last year. Shares added 6.3% to 384p.
The net proceeds will be used to double the firm’s capacity to support revenues of up to around £500 million by expanding its factory footprint to 160,000 square feet.
Fashion brand Ted Baker (TED) announced it had signed a 10-year lease on a new headquarters – the ‘Gorgeous Brown Building’ – at a much lower rent than its current premises (the ‘Ugly Brown Building’) meaning a cash flow benefit of more than £13 million over the next five years.
The fitting out of the new building is being paid for with an £8 million cash payment from its landlord, the BA Pension Fund, meaning no additional capex is needed. Shares gained 0.5% to 138.3p.