UK stocks inches lower on pressure from Marks & Spencer, Tesco; Wood Group jumps

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UK stocks opened lower on Thursday, following pressure from weakness in Tesco and Marks & Spencer even as both retailers delivered an upbeat outlooks on performance.

At 08:46, the benchmark FTSE 100 index was down 12 points, or 0.16%, at 7,539.47.

Supermarket giant Tesco lifted its profit guidance for the year, driven by a rising sales in the third quarter and the key Christmas period. Its shares fell 2% to 286.15 pence.

As a result of stronger than expected sales to date, the company said it now expect retail operating profit slightly above the top-end of our previous £2.5 billion to £2.6 billion guidance range.

Retailer Marks and Spencer fell 4.9% to 240.67 pence despite saying it was 'more confident' to deliver on its recently increased guidance after reporting a rise in sales in third quarter of the year including the key Christmas period.

'[W]e are more confident of our ability to deliver the increased guidance we set, and now expect full year profit before tax and adjusting items of at least £500m,' the company said.

John Wood Group jumped 12% to 233.6 pence as the company said it would sell its environment business, with a sales agreement expected as soon as Q2.

The company also reported a fall in profit as revenue was hurt by weakness in its projects business as the company shifted focus away from large-scale fixed price work.

Recruitment company Hays firmed 1.5% to 154.10 pence after upgrading its profit outlook after reporting that net fees rose by more than a third in the second quarter of the quarter, led by jump in permanent hiring activity amid a buoyant labour market.

Given the strong fee performance, operating profit for the year to 30 June 2022 was expected to be about £200 million, ahead of consensus market expectations of about £183.5 million.

Pub group Mitchells & Butlers was flat at 257.60 pence after reporting a fall in first-quarter sales as emergence of the Omicron variant in December weighed on performance.

For the 15 weeks ended 8 January 2022, like-for-like sales were down 1.5%.

Insurance company Aviva was down 0.5% to 432.70 pence after announcing that Jason Windsor would resigned as chief financial officer on July 2022, to take up the position of CFO at Persimmon.

Homebuilder Persimmon fell 3% to £25.43 even as it reported a rise in annual revenue following increased home sales at higher prices.

For the year ended 31 December 2021, revenue rose to £3.61 billion from £3.33 billion in the year as new housing revenues increased 10% to £3.45 billion