London’s FTSE 100 started Thursday on the front foot, gaining 31.4 points to top the 7,600 mark as tensions between the US and Iran seemed to cool overnight.
Corporate news was dominated by a flurry of festive updates from the hard-pressed retail sector, with the British Retail Consortium (BRC) stating that annual sales dipped in 2019 for the first time since 1995.
Embattled retail giant Marks & Spencer (MKS) was marked down 6.5% to 204.3p after it revealed worse than expected festive trading in Clothing & Home, with like-for-like sales down 1.7% for the third quarter including Christmas.
Encouragingly, the food business served up a ‘standout performance’ over the two week Christmas period and Marks & Spencer also left full year profit guidance unchanged, although gross margins are expected to be around the lower end of guidance amid promotional market conditions.
Britain’s biggest retailer Tesco (TSCO) ticked up 1.9% to 255.7p after reporting a 0.1% rise in UK like-for-like sales over what proved a ‘subdued’ Christmas for consumer spending. Tesco insisted it outperformed the market in both volume and value terms over the festive period, delivering a strong performance in fresh food.
Elsewhere in retail, Card Factory (CARD) crashed 19.6% lower to 112.6p as the budget greetings cards-to-gifts purveyor lowered full year profit guidance following a ‘softer than anticipated Christmas trading period’, warned declining high street footfall and wage inflation headwinds would continue into next year and said it has launched a strategic review.
Away from the retail sector, building materials supplier SIG (SHI) slumped 25% lower to 89.6p on news of a difficult 2019. Having suffered a 6.1% decline in like-for-like revenues amid challenging market conditions, SIG also disappointed the market by downgrading its 2019 pre-tax profit guidance to roughly £42m.
Galliford Try (GFRD) surged 12.5p higher to 156.6p on a positive first half trading update. Having sold its housing and partnership divisions, chief executive Bill Hocking says Galliford Try is now ‘a well-capitalised and focused UK construction group’ which enters the new year with a high-quality order book of £3.2bn.
British Airways-owner International Consolidated Airlines (IAG) rose 7.2p to 625.6p, despite news chief executive Willie Walsh is to retire with Iberia boss Luis Gallego set to succeed him in the hot seat.
All Bar One-to-Harvester pubs play Mitchells & Butlers (MAB) frothed up 3.4% to 436p after reporting a strengthening of like-for-like sales over the 14 weeks ended 4 January with a strong performance over the Christmas period.