Shares in London were up in early trading despite ongoing concerns over Italy and Brexit. Click here for The Trader Nicole Elliott's latest thoughts on the markets.
IC TIP UPDATES:
A couple of misses in this morning’s results from supermarket Tesco (TSCO) explain the shares’ drop this morning. First of all, operating profits of £944m fell short of consensus estimates, while same-store sales in Asia also contracted by 7 per cent. That said, chief executive Dave Lewis is still sticking to the now-familiar margin narrative, which has largely supported the stock’s investment case for the last couple of years. The aim is still for operating margins to build to between 3.5 per cent and 4 per cent by FY2020, ensuring greater profitability in the long run. Bulls believe this is an easier target now that the group has wholesaler Booker in tow, which helped drive a 13 per cent improvement at the top line. We remain buyers.
ITV (ITV) shareholders seem relieved that managed has confirmed the group isn’t making a bid for Endemol Shine, the production company behind Peaky Blinders, Big Brother and Masterchef. Speculation has been circulating since early September when Endemol’s current owners - private equity group Apollo and 21st Century Fox - put the loss making business up for sale. Buy.
KEY STORIES:
Shares in Topps Tiles (TPT) shot up 10 per cent in early trading after a pre-close trading statement showed a positive return to like-for-like growth in the fourth quarter following a 2.3 per cent decline registered in the preceding period. Activity levels have improved since a quieter summer, and the group continues to find more traction in the commercial tile arena. Management has slightly raised FY2018 pre-tax profit guidance, prompting analysts at Liberum to raise forecasts by 5 per cent to £15.5m.
OTHER COMPANY NEWS:
Gym Group (GYM) announced that Mark George will join the company as chief financial officer at the end of the month. Mr George was most recently deputy chief financial officer at Auto Trader (AUTO), and prior to that has working in finance and strategy roles at companies including Tesco (TSCO) and Asos (ASC). Shares were flat in early trading.
