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London open: Stocks edge up ahead of retail sales; but Debenhams dives
London stocks edged higher in early trade on Thursday as investors eyed the latest retail sales data, with Debenhams casting a small shadow after it posted a big drop in profit.
At 0850 BST, the FTSE 100 was up 0.2% to 7,332.41, while the pound was down 0.2% against the euro at 1.1459 and 0.1% lower versus the dollar at 1.4156.
On the data front, UK retail sales data for March is due at 0930 BST. Month-on-month sales are seen falling 0.5% after a 0.8% rise in February, leading to a 2.0% rise for the year-on-year figure.
Spreadex analyst Connor Campbell said: “Though not quite a needle-mover of the same pedigree as Tuesday’s jobs reports and Wednesday’s CPI data, the figures are nevertheless noteworthy enough to define the session’s UK trading. Admittedly March’s number is going to be somewhat complicated by the impact of the ‘Beast from the East’, meaning the severity of the forecast plunge from 0.8% to -0.5% may be written off as an anomaly.”
Ahead of that data, department store chain Debenhams slumped as it posted an 85% drop in half-year profits, with a “material” impact from the aforementioned Beast. As expected, directors decided to halve the dividend to 0.5p, ‘rebasing’ the payout in order to keep dividends covered at least twofold by earnings.
Rentokil International was the standout gainer in the FTSE 350, however, despite saying that revenue growth slowed in 2018 because of the impact of the hurricane in Puerto Rico and cold weather in the US that delayed the emergence of spring pests.
Elsewhere, broadcaster Sky – which is currently the subject of a bidding war – was in the black as it posted a 5% rise in nine-month like-for-like revenues as core earnings rose 14%, and the company said it remains on track for the full year.
BHP Billiton edged up after saying it will produce less iron ore than expected this year due to unplanned maintenance work, and cutting its expectations for the Olympic Dam copper mine in Australia.
Essentra was on the front foot after the supplier of plastic and fibre products said trading in the financial year-to-date has been in line with the board’s expectations, as it announced the departure of its group finance director.
Engineer Weir Group rallied as it launched a rights issue after striking a $1.3bn deal to take over US mining tools manufacturer Esco Corp.
Utility player Telecom Plus advanced as it reported record revenue, profits and dividend for the year to the end of March 2018.
Unilever fell as it said sales growth slowed in the first quarter from the end of last year, though the consumer goods colossus remained confident of hitting its full-year target for underlying sales growth of 3-5%.
Defence company Ultra Electronics was under the cosh as the Serious Fraud Office said it has opened a criminal investigation into suspected corruption in the conduct of its business in Algeria.
Acacia Mining lost its shine after it posted a 33% drop in first-quarter revenue as it took a hit from export ban in Tanzania.
In broker note action, Hammerson was in focus after abandoning its bid for Intu Properties on Wednesday. Peel Hunt upgraded the stock to buy’, while Jefferies lifted it to ‘hold’, but Goldman Sachs cut Hammerson to ‘neutral’. Intu meanwhile was downgraded to ‘underweight’ by Barclays.
Elsewhere, Peel Hunt upgraded Bellway to ‘buy’, while National Express was cut to ‘hold’ at Liberum, Croda was cut to ‘neutral’ at JPMorgan, while Polymetal was upgraded to ‘neutral’.
The main FTSE indices were higher in spite of a large mass of large stocks going ex-dividend, including Aggreko, BAE Systems, Balfour Beatty, Barratt Developments, Bodycote, Capital & Counties Properties, Croda, Drax, Greggs, Informa, Inmarsat, Intu Properties, Lloyds Banking, Polypipe, RPS Group, Rathbone Brothers, Standard Life Aberdeen and UBM.
