The market share of the Big Four supermarkets has tumbled to a 15-year low as the march of the German discounters Aldi and Lidl continues. Tesco (TSCO), Sainsbury (J) (SBRY), Asda and Morrison (Wm) Supermarkets (MRW) now hold just 62.7% of the market. The last time it was that low was in November 2014 – piling pressure on the Big Four ahead of the crucial Christmas trading period. Aldi and Lidl have raked in an additional £1billion in sales over the past year, boosting their combined market share to 14.1%, data company Kantar said. Aldi, which has an 8.1% share, is now rapidly catching up with Morrison’s, which has slumped to under a tenth of the UK market. The discounter has been luring middle-class customers by selling high-end products such as yellowfin sole and Aberdeen Angus steaks under the banner ‘Luxury you can afford’. Sainsbury’s, the second-largest supermarket with 1,400 stores, performed better than its Big Four rivals, giving some relief to chief executive Mike Coupe after the failed merger with Asda.
The collapse of Neil Woodford’s investment empire is a major embarrassment for Hargreaves Lansdown (HL.). The fund supermarket was one of the fallen stock picker’s biggest cheerleaders, repeatedly featuring him on its ‘best buy’ list, despite concerns about his portfolio. It also offered clients discounted fees if they backed his funds. But Hargreaves, which has 1.1m customers, had to apologise when Woodford’s Equity Income fund was frozen in June. The freeze was imposed when investors concerned about poor performance rushed to the exit, leaving Woodford short of the cash he needed to repay them. Since then, critics have questioned why bosses continued to support Woodford publicly. This month angry shareholders told Hargreaves its closeness to Woodford had ‘badly damaged’ its reputation.
Investors reacted with relief to a tough update from recruiter Hays (HAS), which kept its fees stable in the face of a difficult UK private sector. The fees fell by 1% when analysts had been expecting a 2% fall. It follows profit warnings from recruiters Page and Robert Walters last week. Liberum analyst Sanjay Vidyarthi said there may be ‘some relief’ that the results were not even worse.
Bellway (BWY) has posted another rise in annual profits but warned that a slowdown in house price growth and higher building costs will squeeze margins further. The builder expects a ‘moderate volume of growth’ in the year ahead as the uncertainty about Brexit could have an impact on consumer confidence and the number of homes it sells. As the property market in London stalls, Bellway said it has started to shift its investments away from the capital towards other parts of the country, as areas like Manchester and East Midlands ‘performed well’.
Crossword Cybersecurity plc (CCS) surged more than 10% after it did a deal with Leonardo that commits the defence giant to using its Rizikon Assurance software to manage information about suppliers and other partners they work with, in bids for major contracts. Leonardo will now bid for a slew of contracts in 2020 across ‘multiple industries’. Jake Holloway, Crossword’s business development director, said: ‘This is a big step in our development.’
Fresh hopes of a Brexit deal fuel a Boris bounce with traders piling into the pound and other British assets. Banking, housing and utility stocks – seen as having fortunes tied to the health of the economy – gained an instant lift, with British Land Company (BLND) up 32.2p, to 623p, United Utilities Group (UU.) up 43.2p, to 865.4p, Land Securities Group (LAND) up 54.2p, to 946p, Lloyds Banking Group (LLOY) up 3.03p, to 60.82p and Barratt Developments (BDEV) up 33.4p, to 683p among the biggest risers. CYBG (CYBG) saw its shares rise 7.65p, to 134.35p too, while shopping centre owner Hammerson (HMSO) rose 21.9p, to 322p. It also triggered a surge in sterling against the dollar, helping the currency climb to its highest level in five months. But analysts warned the fraught nature of the talks meant further wild swings are ahead.
Vesuvius (VSVS) plunged 75.4p, to 341p after it warned of tough market conditions, exacerbated by the US-China trade war which is damaging the steel and car industries. Full-year profits were now expected to be between £180million and £190million, down from an earlier estimate of £197.2million.
Renishaw (RSW) saw its shares tumble after bosses unveiled a whopping 85% fall in first-quarter profits, blaming turmoil in the world economy. The company said its profits were just £5.1million in the three months to September 30, compared to £33.5million a year earlier. That was after revenues fell from £154million to £124.6million. Renishaw, which has expertise in machinery used for everything from brain surgery to jet engines, also warned: ‘Trading conditions are expected to remain challenging’ – a prognosis that triggered a sell-off.
Indivior (INDV), which told investors it was hiking its full-year forecast after its best-selling opioid addiction drug, suboxone, was not hit as badly as feared by competition from new ‘copycat’ rivals. Profits are now expected to range between £127million and £150million, up from the previous forecast of £63million-£103million.
Whitbread (WTB) rose 109p, to 4279p after analysts at UBS said fears about a slump in hotel room revenue had been exaggerated. They upgraded the firm from ‘neutral’ to ‘buy’, claiming the doom-mongering was ‘too conservative’, and said it was well-positioned to grow.
