Tesco basks in sunshine as bid target Booker soars

SHARES in Tesco soared to the top of the FTSE yesterday after recent hot weather led takeover target Booker to post ‘outstanding’ sales.

Investors had worried that Tesco’s proposed £3.7bn purchase of Booker – currently being investigated by the UK competition regulator – could affect a turnaround under boss Dave Lewis.

But these fears seem to dissipate yesterday, with £ 532.4m being added to Tesco’s market value after Booker said nontobacco like-for-like sales jumped 9.6pc in the quarter to June 16.

Despite tobacco sales falling 7.9pc year- on-year as a result of tighter cigarette regulations Booker’s total sales rose 4.2pc.

The supplier for corner shops like Budgens and Londis and restaurants like Wagamama put the jump down to hot weather, this year’s late Easter, and a strong quarter for customer satisfaction.

Analysts at Shore Capital called the results ‘outstanding’. Accord- ingly, Booker’s shares rose 3.5pc, or 6.5p, to 190.7p.

Tesco’s investors could now throw more weight behind its acquisition of Booker, which the two companies requested be fasttracked by regulators last month.

Tesco shares rose 3.8pc, or 6.35p, to 173.45p.

Shares in SIG jumped as analysts poured faith into the troubled building supplier’s new management team.

The FTSE 250 company, which specialises in insulation, roofing and interior fittings, reported that revenues grew by 2.4pc over the first half of the year.

Mixed performance in the UK was cancelled out by strong sales in Europe. It will now try to cut debt and expects stronger performance in the second half as improvements in Europe cancel out growing UK political risk.

Shares shot up 4.5pc, or 6.6p, to 152.5p as brokers claimed the first figures under new chief executive Meinie Oldersma indicated the beginning of a longer-term turnaround. Shares have jumped 32.7pc since Oldersma’s appointment was announced.

Broker Peel Hunt was encouraged by the figures and said the turnaround under his leadership has ‘a lot further to go’.

Analysts also praised Biffa, one of the UK’s leading rubbish processing firms, after it bought a rival in England for £35.2m. Biffa expects O’Brien WRS, which serves around 3,600 customers and has 190 employees, to add a significant chunk to its earnings, which came in at £6.6m last year.

Broker Peel Hunt agreed, claiming the purchase came at a reasonable price. It upgraded the firm’s price target from 250p to 265p. Shares rose 4.3pc, or 9.5p, to 229p, an all-time high.

The FTSE 100 crept back into the black after Tuesday’s losses, rising 0.1pc, or 10.37, to 7367.60.

Mobile phone gambling game developer Nektan shot up after taking on £2.5m worth of debt to help to bring it into profit.

Due to continued heavy investments in its UK and US businesses the firm said it needs further long-term funding to keep cash on its book.

Nektan will also buy out its marketing department from a joint venture partner for £500,000.

It believes this will give it greater control over its players and marketing. In an update for the fourth quarter, the company has also revealed that its gaming revenues had risen 110pc year-on-year – to £4.2m from £2m.

Performance was driven by an extension of Nektan’s gaming licence across Europe and new casino clients in the US. Shares rose 17.1pc, or 3p, to 20.5p.