London’s FTSE 100 was down sharply by close of play on Friday, the blue chip benchmark shedding 1.7% to 7,029.92 points as oil prices slumped, hurting the shares price of index heavyweights BP (BP.) and Royal Dutch Shell (RDSB).
Investors have been in ‘risk off’ mode in the latter half of the week, unsettled by guidance from the US Federal Reserve suggesting rate hikes will come in 2023 and with UK retail sales figures for May also coming in below expectations.
Retail sales fell by 1.4% between April and May as people chose to visit reopened bars and restaurants instead of buying food at supermarkets. The Office for National Statistics said sales fell most significantly at food stores as consumers took advantage of Covid restrictions being lifted in the hospitality sector to eat out.
In company news, supermarket Tesco (TSCO) fell 3.8% to 222.4p even though it managed to continue growing sales in the 13 weeks to 29 May compared with a year earlier, despite that same period in 2020 being during the height of the first lockdown when supermarket shelves were stripped bare.
Sales in its UK supermarkets grew 0.5% to £10 billion – up 9.3% on the same period two years ago before the pandemic. Its wholesale division Booker saw the strongest growth, with sales up 9.2% to £1.77 billion as the leisure sector started reopening with lockdown restrictions easing in April and May.
Ken Murphy, chief executive, said: ‘We delivered a strong performance in the first quarter, even as we lapped the high demand of last year due to the pandemic. We have further strengthened our commitment to delivering consistent, reliable value and to rewarding loyalty, as we extended Clubcard Prices to all Express stores.’
Automotive distributor Inchcape (INCH) gained 3.1% to 786p as it said it expected to deliver annual pre-tax profit ‘significantly’ ahead of market consensus as performance year to date had exceeded its expectations.
Market consensus for pre-tax profit was around £2.16 million. ‘We expect the strong first half performance will underpin our full year results,’ the company said.
But it added: ‘There is still a high level of uncertainty about the second half, both in terms of the pandemic situation and issues relating to supply due to shortages of semiconductors, which have had a limited impact on the group to date.’
Irish food company Kerry (KYGA) softened 0.6% to €105.4 after it reached an agreement to sell its consumer foods meats and meals business in the UK and Ireland to Pilgrim’s Pride for €819 million (£704 million).
Kerry said the proceeds from the sale would be used for general corporate purposes and the continued development of its taste and nutrition business.
Shipping services group Braemar (BMS) was marked down 5.7% to 271p after warning results for the year to February 2022 may include a £900,000 loss from discontinued operations.
This follows speculation that the buyer of Wavespec, a business Braemar sold in March 2021, ‘has not fulfilled certain contractual obligations, with the result that Wavespec is unlikely to be able to continue to operate’.
Smartspace Software (SMRT:AIM) skipped 3.9% higher to 160p after inking a major new contract with airline catering-to-hospitality products company Gategroup.
US-based advertising firm Tremor International (TRMR:AIM) fell 15.4% to 660p after announcing it has raised proceeds of $128.6 million ahead of the stock market float of its ADS (American Depositary Shares) on the Nasdaq.
The company said it raised the funds through the issue of ADS representing around 13.5 million ordinary shares in the company at a price of $19 (£13.70) per ADS, each of which represents two ordinary shares in the group.
The pricing of the ADS was equivalent to 685p per ordinary Tremor share, a 12.2% discount to Tremor’s closing price in London on Thursday.
Virtual reality technology company VR Education (VRE:AIM) fell 13% to 16.75p as it raised gross proceeds of £7.7 million through the sale of the shares at price of 16p per share. The company placed a total 48,350,191 shares, representing 20% of the company’s issued ordinary share capital.