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FTSE Falls After Weak Retail Sales; Tesco Loses Ground

06/18/2021 | 04:42am EDT

FTSE 100 Falls After Weak Retail Sales Data; Tesco Loses Ground

0805 GMT - The FTSE 100 index falls 0.4% to 7126.46 as investors remain cautious after the U.S. Federal Reserve this week warned of possible interest-rate increases in 2023 and data showed an unexpected fall in U.K. retail sales. Retail sales fell by 1.4% during May, sending sterling lower and potentially raising concerns about a slowing economic recovery, particularly once furlough payments are withdrawn. Grocer Tesco is among the biggest fallers, down 1.8% after it said first-quarter retail sales edged up 1% on year on a comparable basis and left the full-year outlook unchanged. Oil stocks fall as Brent crude prices slip by 0.6%. Precious metal miner Fresnillo is the biggest riser, up 2.2%. (jessica.fleetham@wsj.com)

 
Companies News: 

Kerry Sells U.K., Irish Consumer Foods' Meats and Meals Business to Pilgrim's Pride

Kerry Group PLC said late Thursday that it is selling its consumer foods' meats and meals business in the U.K. and Ireland to Pilgrim's Pride Corp. for 819 million euros ($975.1 million).

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Inspecs Group Swung to a 2020 Pretax Loss

Inspecs Group PLC on Friday reported a swing to a pretax loss for 2020 and said it is still suffering the effects of Covid-19 restrictions.

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Inchcape Expects 2021 Profit to Be Significantly Ahead of Consensus

Inchcape PLC said Friday that it expects full-year pretax profit to come in significantly ahead of the market consensus of 216 million pounds ($300.8 million).

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Tesco 1Q Retail Sales Climbed, Backs FY 2022 Profit Outlook

Tesco PLC said Friday that first-quarter retail sales grew 1% on year on a comparable basis and said that its profit outlook for the full year remains unchanged.

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DP Poland to Report Widened 2020 Ebitda Loss

DP Poland PLC said Friday that its 2020 Ebitda loss widened, and that delivery sales rose 14% in the five months to May 31.

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Westminster Group Raises GBP2.5 Mln in Premium-Priced Share Placing

Westminster Group PLC said Friday that it has raised 2.5 million pounds ($3.5 million) via a share placing and will use the money towards its development.

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Auction Technology Raised GBP244 Mln in Share Placing to Buy LiveAuctioneers

Auction Technology Group PLC said Friday that it has raised gross proceeds of around 244 million pounds ($339.8 million) via a discounted share placing to partly fund the proposed acquisition of LiveAuctioneers Worldwide Inc.

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DV4 Properties Barwood Sells 1.6% Stake in Tritax Big Box REIT

DV4 Properties Barwood Co. has sold its 1.6% stake in London-listed commercial-property investor Tritax Big Box REIT PLC for about 50.7 million pounds ($70.6 million), the coordinator of the transaction said Friday.

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VR Education Holdings Conditionally Raises GBP7.7 Mln via Share Placing

VR Education Holdings PLC said Friday that it has conditionally raised around 7.7 million pounds ($10.7 million) via a discounted share placing.

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Telecom Plus FY 2021 Profit Fell, Expects FY 2022 Rise in Adjusted Earnings

Telecom Plus PLC said Friday that pretax profit for fiscal 2021 fell on lower revenue but it expects adjusted earnings to increase in the year ahead and to invest to capitalize on more favorable market trends.

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B90 Loss Narrowed in 2020; Expects to Become Cash-Flow Positive in 2H 2021

B90 Holdings PLC on Friday reported a narrowed loss for 2020 and said it expects to become cash-flow positive in the second half of 2021.

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Victoria Oil & Gas to Issue Up to $7.5 Mln Loan Notes

Victoria Oil & Gas PLC said Friday that it has entered into a facility agreement with Meridian Capital Ltd. to raise gross proceeds of up to $7.5 million through the issue of unsecured loan notes.

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Unite Group Closes Disposal of London Properties for GBP342 Mln

Unite Group PLC said Friday that has sold two London properties to its London Student Accommodation joint venture with GIC, the Government of Singapore's real estate portfolio, for 342 million pounds ($476.3 million).

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Braveheart Investment Group Swung to FY 2021 Pretax Profit

Braveheart Investment Group PLC said Friday that it swung to a pretax profit for fiscal 2021 as total income rose, and that the board will seek opportunities for enhancing shareholder value as the year progresses.

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European Metals to Start Trading in the US in July, Postpones Prague Listing

European Metals Holdings Ltd. said Friday that it expects to start trading on the U.S. OTC Market in July.

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Smartspace Software Wins Contract with Gategroup

Smartspace Software PLC said Friday that it has closed a new contract with Gategroup Holding AG for the use of its SwipedOn Visitor Management solution across the company's international estate.

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Sabien Technology Appoints Athan Fox Chief Scientific Officer

Sabien Technology Group PLC said Friday that Athan Fox has been appointed chief scientific officer effective immediately.

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Lekoil Nigeria Chairwoman, CEO Resign From Lekoil Cayman Board

Lekoil Nigeria said Friday three of its directors and executives have resigned from the board of Lekoil Cayman.

 
Market Talk: 

UK Retail Spending Recovery Is Expected to Lose Momentum This Year

0811 GMT - The current quarter's high level of retail spending in the U.K. is unlikely to be sustained for the rest of the year, Pantheon Macroeconomics' U.K. chief economist Samuel Tombs says. Consumer spending is approaching its pre-pandemic level, and households' real disposable income looks set to fall in 4Q as the end of the furlough program reduces employment and inflation rises, he says. U.K. retailers are also likely to take a smaller share of overall spending compared to the last few months as consumers start to spend more on services amid the reopening, Tombs says. (xavier.fontdegloria@wsj.com)

Tesco Could Be More Generous to Shareholders Going Forward

0811 GMT - Tesco's progress in reducing debt in recent years means the U.K. grocer is now in a better position to be progressively more generous to shareholders going forward, Shore Capital says. "Management has tended to talk of favoring a share buyback route as the prime mechanism to distribute surplus cash, which makes sense at current stock valuation levels to our minds, the commencement being held back due to understandable concern about the scope for ongoing costly pandemic controls," Shore says. If England's full reopening takes place in July, Tesco is more likely to have scope for a share buyback following its half-year results in October, Shore says. (adria.calatayud@dowjones.com)

Boohoo Seen as Devaluated Company Despite ESG Progress

0753 GMT - Boohoo Group is very cheap despite the progress it has made in terms of ESG, Liberum says. The fashion retailer's evolution has surprised Liberum and it expects growth to remain strong through the rest of the year. Liberum forecasts growth of around 29%, ahead of Boohoo's guidance of 25%. "Our conclusion is that the shares still appear to have a large ESG discount built-in," Liberum adds, while it raises its recommendation on the stock to buy from hold. Liberum has a target price of 380 pence a share. Shares are up 2.30 pence, or 0.7%, at 334.00 pence. (sabela.ojea@wsj.com; @sabelaojeaguix)

Tesco Bonds Could Appreciate in Value

0750 GMT - Tesco's bonds could appreciate in value as the U.K.'s retailer bond spreads have scope for some tightening, says ING. Tesco's first-quarter retail sales grew on year on a comparable basis and it reported "a promising trading statement," despite a difficult comparison base due to the stockpiling related to the pandemic last year, says ING's Alyssa Gammoudy. The company reiterated the full year profit guidance. "We like Tesco fundamentally and see some tightening potential of its credit curve," she says. (lorena.ruibal@wsj.com)

Pound Falls After Retail Sales, Seen Vulnerable to EU Trade Disputes

0709 GMT - The pound falls, hitting a six-week low of 1.3855 against the dollar after U.K. data showed retail sales fell by 1.4% during May, raising concerns about a slowing economic recovery. This was below expectations in a Wall Street Journal poll for a rise of 1.6%, as demand slowed following an initial rush to buy goods the previous month after the economy reopened. The currency is also vulnerable to trade tensions between the U.K. and the EU, with the former threatening to unilaterally extend a grace period for processed meat exports to Northern Ireland, ING says. The next few weeks "could be a vulnerable period" for GBP/USD, which risks falling to 1.3800, ING says. EUR/GBP rises 0.4% to 0.8587. (jessica.fleetham@wsj.com)

Tesco's Solid 1Q Bodes Well for Rest of Year

0659 GMT - Tesco has delivered a solid first-quarter update, as its numbers and comments about a strong start to the year suggest its guidance could be too conservative, Citi says. The FTSE 100 grocer beat expectations in the U.K., thanks to strong contributions from general merchandise and clothing, and from online sales, Citi says. Tesco's guidance, unsurprisingly, remains unchanged, and the company expects retail operating profit for fiscal 2022 to recover to a level similar to that of fiscal 2020, the bank says. "Whilst we expect consensus forecasts to remain broadly unchanged, we continue to view risk to be to the upside," Citi analyst Nick Coulter says. (adria.calatayud@dowjones.com)

Contact: London NewsPlus, Dow Jones Newswires; +44-20-7842-931

(END) Dow Jones Newswires

06-18-21 0441ET

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