FTSE 100 movers: Ocado rallies on results; Just Eat hit by downgrade
London’s FTSE 100 was down 0.2% at 7,537.45 in afternoon trade on Tuesday.
Ocado was the standout gainer after an in-line set of interim results. The company said its interim pre-tax loss widened from £13.6m to £142.8m for the six months ended 2 June as the online retailer dealt with the impact of a fire that damaged property and goods at its Andover distribution centre in February.
Ocado said trading was in line with expectations as double-digit revenue growth was driven by a 10% rise in retail sales.
Sophie Lund-Yates, equity analyst at Hargreaves Lansdown, said: “The fire at Andover earlier this year didn’t go down well with investors, with many concerned it would mark the beginning of a tumultuous time. Those same investors will be breathing a sigh of relief today, on news retail revenue growth is still expected to come in at least 10% this year. Not only was the fire a potential performance-dampener, the supermarket sector is still highly competitive, so strong sales growth really is no mean feat.
“It’s worth keeping in mind though, the retail division is a decreasingly important part of Ocado’s proposition - especially since half has recently been sold to Marks & Spencer. Ocado’s future lies more in the Solutions division, where retailers pay licence fees for the right to use its cutting edge systems. To that end, a lack of new deals in the pipeline lately could be something of a bugbear, but the group remains optimistic its technology will continue to entice new partners.”
“One off costs this year mean Ocado’s facing some bumps in the road, but with sales standing firm it looks like Ocado is still on the right track for now.”
Auto Trader revved higher as Liberum upped the price target on the buy-rated stock to 640p from 620p.
“Auto Trader goes from strength to strength,” the broker said. “Its dominance in the UK used car classifieds market is unchallenged and unlikely to change, new revenue streams are coming on tap which should drive ARPR growth and the UK used car market dynamics should remain unchanged.”
On the downside, Just Eat was under pressure as Berenberg downgraded its stance on shares of the online food delivery service to ‘hold’ from ‘buy’ and slashed the price target to 600p from 880p, while Intertek was knocked lower by a downgrade at Goldman Sachs.
FTSE 100 - Risers
Ocado Group (OCDO) 1,266.90p 8.24%
Royal Bank of Scotland Group (RBS) 228.70p 1.28%
Smith & Nephew (SN.) 1,751.00p 1.24%
Compass Group (CPG) 1,948.00p 1.12%
Aveva Group (AVV) 3,923.00p 0.85%
Barratt Developments (BDEV) 575.60p 0.81%
Informa (INF) 844.60p 0.79%
Reckitt Benckiser Group (RB.) 6,414.00p 0.71%
Auto Trader Group (AUTO) 556.20p 0.62%
Royal Dutch Shell 'A' (RDSA) 2,591.50p 0.56%
FTSE 100 - Fallers
Melrose Industries (MRO) 174.80p -6.45%
Coca-Cola HBC AG (CDI) (CCH) 2,735.00p -3.32%
NMC Health (NMC) 2,355.00p -3.29%
TUI AG Reg Shs (DI) (TUI) 764.20p -3.14%
Antofagasta (ANTO) 858.20p -2.68%
Just Eat (JE.) 621.00p -2.39%
Croda International (CRDA) 4,768.00p -2.38%
Intertek Group (ITRK) 5,532.52p -2.32%
International Consolidated Airlines Group SA (CDI) (IAG) 441.74p -1.90%
Ferguson (FERG) 5,646.00p -1.81%