LONDON (SHARECAST) - After yesterday's shake-out stocks are set to rebound strongly this morning with City traders saying that a triple-digit rise from last night's close of 4,944 is not out of the question.
Supermarket leviathan Tesco saw a 6.2% year-on-year rise in underlying profit before tax to £1.9bn in the 26 weeks to August 27th. Seymour Pierce had forecast an underlying profit before tax of £1.73bn. Group trading profit rose 3.7% to £1.77bn, versus the £1.83bn predicted by Nomura Securities. With a Payment Protection Insurance provision for the banking group stripped out and the Hungary sales tax excluded, trading profit rose 9.2% to £1.85bn. Group sales in the period were up 8.8%, or 7.3% excluding petrol, to £35.5bn.
"We are at this stage broadly comfortable with current market consensus forecasts for 2011/12, adjusting for the effects of the additional Bank PPI provision and changes to [systems] migration timing [in the banking arm] announced today," Tesco said.
Tesco's rival, Sainsbury, saw like-for-like (LFL) year-on-year sales growth of 5.4%, or 1.9% excluding fuel, in the 16 weeks to October 1st. Total sales for the group's second quarter were up 7.8% (4.4% excluding fuel), bringing the figures for growth over the half-year period to 7.6% (4.3% excluding fuel). LFL sales growth in the first half of the financial year was 5.1%, or 1.9% excluding fuel. "We expect the market environment to remain very competitive for the foreseeable future but we are confident in our ability to grow by doing a great job for our customers," said Sainsbury's chief executive, Justin King.
Premier Oil has made a recommended £221m offer for North Sea oil operator EnCore Oil. Premier is offering 70p in cash per EnCore share, with a share alternative of 0.2067 Premier shares per EnCore share.