Shareholders cheer B&M profit surprise
The FTSe 100 risers were topped by B&M after the bargain retailer hiked its half-year forecasts in a surprise update.
The chain, which has over 600 stores in the UK selling everything from wallpaper to vacuum cleaners, said profit margins had been stronger than originally predicted, thanks partially to lower levels of discounting, while sales were broadly in line with expectations.
As a result, it expects to earnings of between £275m-£285m for the six months to September 25, higher than the £235m predicted by analysts.
B&M also said it is ‘well positioned’ for the upcoming ‘golden quarter’, the final three months of the year when retailers usually make most of their profits in the run-up to Christmas.
however, it also warned that trading and customer demand remained ‘highly uncertain’. Analysts at Peel hunt said B&M may have benefited from its reputation as an essential retailer last year, boosting customer loyalty.
The broker added that B&M’s decision to order Christmas stock two to three weeks earlier than usual ‘may prove a masterstroke’ and shield it from shortages caused by supply chain issues.
‘This is especially important in lines such as toys: any sniff that they are in short supply could mean a bit of a run on stock, so being loaded with product is surely the right strategy,’ Peel hunt said. B&M jumped 6.9pc, or 37.4p, to 578p.
But the FTSE 100 had a lacklustre session, falling 0.75pc, or 53.84 points, to 7095.53, while the FTSE 250 dropped 1.03pc, or 248.59 points, to 23,848.89.
Investors fretted that the Delta variant of Covid-19 is hurting the global economic recovery following subdued property and car sales data from China.
Oil prices were also in focus as crude producers struggled to restart operations in the Gulf of Mexico following the devastation of hurricane Ida. Brent crude rose 1pc to $72.59 a barrel, while shares in BP fell 0.1pc, or 0.15p, to 298.25p and Royal Dutch Shell was up 0.2pc, or 3.2p, at 1437.4p.
Avon Protection, which makes oxygen masks and armour for the military, police and fire brigades, climbed 1.4pc, or 24p, to 1800p as it unveiled a contract with the US Army for a new type of helmet.
Fellow FTSe 250 constituent Airtel Africa also rose 0.9pc, or 0.85p, to 93.65p following a target price hike from analysts at UBS.
Accesso Group, a provider of electronic ticketing technology to theme parks, museums and venues, shot up 14.7pc, or 122p, to 950p after raising full-year guidance on the back of ‘very strong trading’ over the summer.
Small-cap property firm U+I Group climbed 6.9pc, or 5.6p, to 86.6p after it secured planning permission for its £770m Morden
Wharf project in London. Medical imaging group Ixico was up 2.2pc, or 1.7p, at 80.7p after it inked a contract to support the clinical trial for a potential therapy for multiple system atrophy, which damages the brain’s nerve cells.
And estate agent M Winkworth rose 9pc, or 17p, to 207p after reporting a 330pc rise in profits to nearly £2m in the six months to the end of June. The period was marked by ‘an exceptional level of sales activity’.
In the fallers, shares in AIM miner Pan African Resources headed underground, tumbling 5.1pc, or 0.86p, to 16p after the group warned its taxes for the year to the end of June had soared by 281pc to $30m.
Glasses retailer Inspecs dropped 1.3pc, or 5p, to 395p after a set of half-year results that saw its losses narrow by nearly 69pc to $2.6m in the six months to the end of June failed to excite investors.
Oiler Jadestone Energy sank 2.5pc, or 2p, to 78p after it extended the deadline for its acquisition of a majority stake in an oil field in New Zealand.