Tesco, BHP Billiton and Dunelm

“Blue-chips opened on the front foot with traders looking to UK average earnings and jobless data out mid-morning,” says AJ Bell Investment Director Russ Mould.

“Supermarket giant Tesco was the biggest FTSE100 faller in early trading after its full-year profits took a £235m hit for overstating results in 2014. Overall, Tesco’s results were better than expected with like-for-like sales up and margins improving to 2.3% from 1.8%. Tesco’s aim is to increase this figure to between 3.5% and 4.0% by 2019-20 and it is currently ahead of where it expected to be at this stage. Tesco’s shares were down by more than 2.9% in early trading.

“BHP Billiton has rejected restructuring proposals put forward by shareholder Elliott Associates. It wants to BHP to scrap the dual listing of its shares in the UK and Australia and replace it with a single UK incorporated company. Elliott also wants BHP to spin-off its US oil business. BHP believes both are bad ideas as the change in structure would destroy at least $1.3bn in value to save less than $2.5m a year while oil had the potential to create significant long term value at high returns. BHP’s shares were virtually flat in early trading.

“Homewares retailer Dunelm's shares edged up after the group reaffirmed its full-year forecasts. The homewares sector remains in decline but Dunelm has continued to outperform the market and its margin of over-performance has increased. Dunelm’s shares were up by over 0.7%.”

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