UK share prices watch: Retailers take centre stage
Blue-chip grocers Tesco (LON:TSCO) and Wm Morrison Supermarkets (LON:MRW) have been among today’s most notable UK share prices, with results impacting shares in the former, and an expanded partnership with US e-commerce giant Amazon (NASDAQ:AMZN) fuelling demand for the latter’s stock. FTSE 100 retailer Marks & Spencer Group (LON:MKS) meanwhile has been in the doldrums as it announced the outcome of its rights issue, while elsewhere in the London market, Majestic Wine (LON:WINE) has tumbled after posting its full-year results.
Retailers in focus on London market
Tesco’s shares have been volatile this Thursday, as Britain’s biggest grocer posted slower growth for the first quarter of its financial year. The company also suffered downbeat performance in Central Europe on account of store closures and two fewer trading days in Poland, along with cooler weather across the region.
“We do sense that those tough comparatives and awful June weather may mean that the Q2 UK out-turn, at least, could be tougher,” said Shore Capital analyst Clive Black, as quoted by Reuters. Proactive Investors meanwhile quoted Richard Hunter, head of markets at Interactive Investor, as commenting that the trading update was ‘unsurprisingly light’ on strategic detail ahead of next week’s Capital Markets Day, but that the trading performance showed “positive trends across the board, with the exception of its Central European business”. Tesco’s share price has been little changed with a 0.1-percent fall in early afternoon trade, compared with about a 0.3-percent gain in the benchmark FTSE 100 index.
Morrisons is also among today’s UK share prices to watch after announcing that it was expanding its same-day delivery service with US e-commerce giant Amazon. The service, currently available to Amazon Prime Now customers in Leeds, Manchester, Birmingham, and parts of London and the home counties, will begin to be rolled out to other cities, including Glasgow, Newcastle, Liverpool, Sheffield and Portsmouth this year.
Proactive Investors quoted Neil Wilson, chief market analyst at Markets.com, as commenting that the extended deal was “nothing fundamentally the market didn’t anticipate here”.
“But having trialled out the service in key locations, the nationwide rollout is a major step up for Morrisons and a sign that a) the service is delivering and fundamentally is a success, and b) ties with Amazon remain firm,” he pointed out, adding that while Morrisons’ share price had climbed about one percent, valuations “remain depressed as the market has decided the steady growth under Dave Potts is just about run its course – the tie-up with Amazon will matter more and more”. Shares in Morrisons are trading about one percent higher.
Marks & Spencer, however, is underperforming the market, with investors digesting the results from the company’s recent rights issue. The high street retailer said that it had received valid acceptances for about 85.14 percent of the new ordinary shares offered. The group’s shares are down by about 1.6 percent intraday.
In smaller London-listed retailers, Majestic Wines is down by nearly eight percent after reporting lower full-year profit before tax. The company further suspended its payout to shareholders and said that its Chairman Greg Hodder would step down. Reuters reported that Liberum had called Hodder a ‘highly regarded’ executive and said that his departure was a surprise.
Blue-chip packaging specialist DS Smith (LON:SMDS) meanwhile is rallying more than six percent, having reported record return on sales, and a surge in profit before tax and free cash flow. Shares in Vodafone (LON:VOD) have been steady as the blue-chip telco announced that its unit in Germany had acquired radio spectrum for next-generation 5G mobile networks at the Federal Network Agency auction for a total cost of €1.88 billion. Shares in the London-listed telecoms giant are up by about 0.15 percent. In mid-caps, Just Group (LON:JUST) is rallying more than 14 percent in early afternoon trade as it said in an annual general meeting statement that it remained “focused on delivering capital self-sufficiency by 2022”.
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UK share prices to watch on Friday
Tesco is likely to remain among tomorrow’s UK share prices to watch, with analysts commenting on the company’s first-quarter update. In expected releases, specialist staffing group SThree (LON:STHR) is the only London-listed company scheduled to update investors on its performance. Earlier this year, SThree reported an “encouraging start to the new financial year,” with a nine-percent rise in gross profit in the quarter ended February 28.
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