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Markets
“The FTSE 100 goes into reverse and follows a similar pattern seen with Asian stocks earlier today as markets reacted to comments from US president Donald Trump regarding dissatisfaction with the latest round of trade talks with China.
“The commodities sector was worst hit with shares in miners and oil producers taking a tumble, not helped by talk that Chinese authorities want to intervene in the coal market to bring down prices,” says AJ Bell Investment Director Russ Mould.
Marks & Spencer
“Marks & Spencer’s plan to close stores is only a small part of a bigger scheme to keep the company relevant in today’s fast-moving world of retail. The scale of its challenge is made clear in full year results published today which show a 62.1% drop in pre-tax profit to £66.8m.
“The results are a mess with endless amounts of adjustments yet the retailer does its best to try and present them in a positive fashion.
“Fundamentally the business has been in turnaround mode for some time and the need to take more than half a billion pounds in additional exceptional costs to try and reshape the business shows that there is still much to be done.
“To look at it glass half-full, the accelerated pace of change suggests that chairman Archie Norman is just starting to get going and help chief executive Steve Rowe with the tough decisions that need to be made (and should have been made some time ago).
“To look at it glass half-empty, even Mr Rowe admits that it is going to be a long haul, as the goal now is to deliver sustainable, profitable growth ‘within three to five years.’ Investors now have to decide whether that’s too long to be left waiting at the checkout, even if an unchanged dividend offers some comfort (and a juicy yield).”
Dairy Crest
“Despite its name, Dairy Crest no longer participates in milk production; instead cheese is the focus for this FTSE 250 constituent.
“The announcement of a near-£70m fundraising alongside today’s full year results has put some pressure on the share price as investors react to the implied dilution as the company seeks to issue new shares.
“However, this looks to be an example of a company investing for future growth and the short-term pain of a discounted fundraise might be soothed by long-term gain if the company can execute on its expansion plans.
“Amid strong demand for its leading Cathedral City brand of cheddar cheese, the company can see capacity constraints coming at its factory in Davidstow, Cornwall – something it will look to address with an £85m investment.
“The firm spies opportunities in snacking and convenience products as well as demand for ‘high quality cheddar’ in geographies like Europe, the US and Asia.”
Britvic
“Demand for soft drinks can often fluctuate in accordance with the weather. In this context the market is clearly impressed with Britvic’s ability to deliver a strong set of first half numbers despite the period encompassing the ‘Beast from the East’ as well as other spells of very cold temperatures in several of its key markets.
“The company behind brands such as Robinsons and Tango beat expectations with its revenue performance, a 4.5% advance outpacing the 3.5% penciled in by analysts.
“Crucially the company also remains positive on its future prospects despite the introduction of the so-called sugar tax which took effect at the start of the new tax year in April.”
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