Ocado shares on slide as analysts back arch-rival
SHARES in Ocado fell 3pc after a leading City analyst said one of the company’s founders was creating a viable competitor to the online grocer.
Barclays Capital’s James Anstead reckons Today Development Partners (TDP) is on to something, having been set up by Jonathan Faiman, who co-founded Ocado with Tim Steiner and Jason Gissing. Anstead pointed to the recruitment by TDP of Jon Hillary, one of Ocado’s longestserving employees.
‘Hillary was reportedly responsible for helping develop Ocado’s logistics and automation processes, as well as designing and building its customer fulfilment centres,’ said Anstead. ‘Creating a viable competitor to Ocado is certainly a huge task, but this move gives TDP a credibility boost.’
TDP was recently chosen by Waitrose to help develop its online offering, replacing Ocado (down 53.1pc, or 37.5p at 1167.5p). Sticking with the retail sector,
Marks & Spencer topped the FTSE 100’s list of fallers following a technicality related to its £600m City fundraiser. The rights issue will bring in the bulk of the £750m required to bankroll a food delivery deal with Ocado.
Yesterday’s fall for M&S – it was down 7.4pc,or 18.5p, to 232p – raised the distinct possibility of an ignominious ejection from the top flight after shake-up day next week. It was one of the founding stocks back in 1984.
Laith Khalaf, senior analyst at Hargreaves Lansdown, thinks Marks will survive, but only just.
The FTSE 100 itself had a poor day, falling 83.65 points to 7185.30 amid worries over the deteriorating state of trade relations between China and the US. Wall Street booked a second consecutive session of heavy losses.
Beijing has hit back at President Trump’s sanctions by threatening to restrict the export of rare earth minerals used in computer memories, rechargeable batteries used in electric vehicles and catalytic converters. Telecoms firm Huawei, meanwhile, is mulling US legal action. Neil Wilson, analyst at Markets, said: ‘China’s threat is clearly a bargaining chip, if not exactly a trump card, but one the market is starting to really take seriously.’
Stobart Group, the logistics firm that owns Southend Airport, motored 6pc, or 7p, to 124.4p, despite a full-year loss peppered with a series of expenses and writedowns. Among the small- caps, shares in Xtract Resources rocketed up 46.4pc, or 0.33p, to 1.02p after it signed a collaboration agreement to process hard rock gold deposits in Mozambique.
Rainbow Rare Earths rose 25.9pc, or 0.88p, to 4.25p after investors flooded to non-Chinese rare earth stocks following the threats by Beijing. India-focused clothing firm Koovs jumped 22.8pc, or 1.4p, up to 7.55p after receiving £3.7m as part of an agreement with conglomerate Future Lifestyle Fashions, which has the licence in India for brands such as Converse and Champion.
Meanwhile, solid state battery maker Ilika said it had developed processing methods that would allow its power cells to be used more easily in medical devices such as insulin pumps and smart contact lenses, sending the shares up 15pc, or 4.5p, to 34.5p.
In the fallers, customer communications group Netcall sank 11.9pc, or 6.75p, to 50p after warning that purchasing delays meant its product revenues would be lower for its current financial year. Cancer drug developer Valirx fell 11.8pc, or 0.03p, to 0.23p after its losses widened.