UK shares traded lower on Thursday following a weak session in Asia after Chinese data showed bank lending fell more than expected in December, hitting property and consumer stocks.
The SE Composite fell 1.2% and Japan’s Nikkei 225 dropped 1%.
Gold was down 0.2% at $1,823 an ounce while Brent Crude was 0.2% higher at $84.35 a barrel.
At 8:50, the FTSE index of leading shares was down 0.2% at 7,537 points.
CORPORATE NEWS
Supermarket chain Tesco (TSCO) increased its guidance for retail operating profit to be slightly above the top end of its previous £2.5 billion to £2.6 billion guidance range after seeing stronger than expected sales in the third quarter and Christmas.
Like-for-like retail sales in the third quarter were up 2.4%, while Christmas sales increased 3.2%, taking the total sales growth for the 19 weeks through 8 January to 2.6%.
Sales in its banking division were up 33%, and the company said operating profit for the division was now expected to be between £160 million and £200 million. The shares dropped 1.7% to 287.2p after the company flagged 5% cost inflation.
Retailer Marks & Spencer (MKS) said trading over the Christmas period had been strong with food outperforming the market over the last 12 and 24 months.
The business generated its highest ever Christmas sales with December growth inline with third quarter growth. For the 13 weeks to 1 January group revenues increased 18.5% to £3.3 billion.
As a result of the strong performance the company said it was confident of delivering the increased guidance set now expects full year profit before tax and adjusting items of at least £500m. However, the shares dropped 4.5% to 241.7p after a very strong run.
Global specialist veterinary pharmaceutical group Dechra Pharmaceuticals (DPH) said strong trading had continued through the first half with group revenues increasing 15% at constant exchange rates for the six months ended 31 December.
The company maintained a positive outlook for the financial year in line with the upper end of management expectations and said that results should continue to benefit from good growth in the companion animal market. The shares gained 1.5% to £45.32.
RAISED GUIDANCE
Recruitment firm Hays (HAS) said it recorded a record second quarter to 31 December with excellent fee income growth across all regions.
Like-for-like fees were up 37% led by permanent up 61% and temporary up 22%, with strong margin and volume growth through the quarter.
Strong trading prompted the company to increase guidance for operating profit to 30 June 2022 to be around £200 million, ahead of market consensus. The shares added 0.5% to 152.5p.
Shares in consulting and engineering company Wood Group (WG.) gained 10.8% to 220.6p after the company said it expected activity levels to improve across 2022 with the order book ‘significantly’ higher than in December 2020.
Full year results were in lime with expectations with revenues down 14% to around $6.4 billion and operating profit before exceptionals of around $195 million to $205 million compared with $214 million last year.
OMICRON CHALLENGES
Pub group Mitchells & Butlers (MAB) said like-for-like sales for the 15 weeks to 8 January 2022 were down 1.5% as the emergence of Omicron weighed on performance.
Over the important festive season like-for-like sales were 10.2% lower. The shares slipped 1% to 255p.
Homebuilder Persimmon (PSN) said full year revenues to 31 December increased 8.4% to £3.6 billion driven by increased home sales and higher prices.
New home completions were 7% higher at 14,551 at an average selling price of about £237,050, up 2.8% over last year.
Looking ahead, the total forward sales stood at £1.62 billion, up from £1.36 billion in 2019. In a separate statement the company said it had appointed Jason Windsor as chief financial officer.
He will succeed Mike Killoran, who announced in July 2021 that he would be retiring in mid-January 2022 after more than 25 years with the Group. The shares dropped 3% to £25.43.
A list of FTSE 100 index movers can be seen HERE.
