UK stocks continued their positive run on Tuesday after official figures showed payrolls surged by almost 200,000 in April, the fourth consecutive monthly rise and the biggest rise on record, as companies rushed to hire.
The headline jobless rate fell to 4.7%, the lowest since last August, as firms chased workers and the government was able to reduce furlough payments. At the peak last May, the government was supporting almost 9 million workers, but that has fallen to just over 3 million this month.
At 8.45am the FTSE 100 index was up 32 points or 0.4% to 7,179 points led by consumer stocks such as Primark owner AB Foods (ABF), fast-food delivery firm Just Eat Takeaway (JET) and DIY retailer Kingfisher (KGF).
Operating earnings rose 95% in the fourth quarter, reducing the full year fall to 3%, showing the resilience of the business in difficult markets. Shares dipped 0.6% to £50.56.
House builder Bellway (BWY) reported a 51% increase in weekly reservations for the period from the start of February to the start of June and a 20.5% rise in the value of its order book to £1.89 billion.
Due to the strength of demand, the firm now sees its average selling price topping £300,000 for the first time, although completions in the second half will be lower than the first half. Shares traded sideways at £34.81.
The contract includes £66 million of revenue for 2022 which qualifies for inclusion in the order book, unlike previous contract wins. Shares gained 2% to 40.4p.
Online fashion group Boohoo (BOO:AIM) released a trading update for the quarter to the end of May showing 32% growth in revenues and a gross margin of 55%, down 0.6% on last year but consistent with pre-pandemic levels.
The Dorothy Perkins, Wallis and Burton brands are being integrated into the firm’s multi-brand platform, but due to continuing ‘uncertainty’ in some markets there is no change to guidance for the year to next February. Shares eased 0.6% to 326p.
Holiday firm On the Beach (OTB:AIM) posted a predictably weak set of results for the six months to March, with revenues on a generally accepted accounting principle (GAAP) basis down 79% and gross profits down 51%.
The group decided in early May not to take holiday bookings for departure before 1 September, a move which is looking increasingly prescient given the government’s tinkering with the ‘traffic light’ system for overseas countries. Shares dipped 0.7% to 356p.
While jewellery sales were up, pawnbroking income fell as customers repaid their loans during lockdown and foreign currency sales were heavily impacted by travel restrictions. Shares gave up 5% to 150p.
Specialist engineering firm Pressure Technologies (PRES:AIM) delivered a small rise in sales and moved to an operating profit during the six months to the start of April thanks to a strong order book from the defence industry.
The firm reported improving momentum in the hydrogen storage and refuelling market with Royal Dutch Shell (RDSB) placing its first order and another order expected ‘imminently’. Curiously, shares dropped 6% to 92p in response.
Growth was helped by existing customers who saw a surge in usage of their digital channels during lockdown, as well as new client additions. Still, shares dipped 1% to 915p.
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