UK grocery sales up 0.5%, Kantar study
The UK grocery market returned to growth amid ongoing Brexit uncertainty, latest data reveals.
New data published by Kantar shows that year-on-year supermarket sales grew over the 12 week period.
Overall sales increased by 0.5% and volume sales were flat, Kantar said.
In its report, Kantar added that there is little evidence of stockpiling at the moment in the lead up to the Brexit deadline.
The August Bank Holiday provided some relief, Kantar added. Retailers have struggled with last year’s comparisons as this year’s poor weather was no match for 2018’s summer heatwave. That said, the August Bank Holiday was one of the hottest ones yet and shoppers spent £1.3 billion across the weekend.
“Lidl reached a new record high market share and has crossed the 6% market share line for the first time,” Kantar said in its report.
Lidl unveiled a £500 million London investment earlier this year in June.
“An additional 618,000 shoppers visited the retailer compared with last year, helped by store openings, refurbishments and its newspaper voucher deals. Having moved through the 5% barrier as recently as May 2017, the retailer has taken just over two years to add another percentage point to its market share – one that’s worth £1.2 billion annually,” Kantar continued.
Additionally, Aldi increases its sales by 6.3% and its strongest growth came from the south of England where sales grew by almost 9%. Aldi’s lowest market share, however, continues to be in London.
For Sainsbury’s (LON:SBRY), the 12 weeks were its strongest period since last October – it was the best performing out of the big four retailers for the second consecutive month.
Asda (NYSE:WMT) and Tesco (LON:TSCO) saw a sales decline of 1% and 1.4% respectively, according to Kantar.
Ocado (LON:OCDO) was the retailer to grow the fastest and only one year remains until it begins to sell products from M&S in addition to its own lines and national brands.
Shares in J Sainsbury plc (LON:SBRY) were trading at -0.5% as of 09:25 BST Tuesday, Tesco plc (LON:TSCO) shares were also down, trading at -0.38% as of 09:26 BST. Shares in Ocado Group plc (LON:OCDO) were trading at +1.11% as of 09:29 BST Tuesday.
Eagle Eye Solutions enjoys increased revenue from tier 1 clients
Retail focused Saas technology provider Eagle Eye Solutions Group (LON:EYE) recorded a 23% increase in revenue as released final results for the year to 30th June on Tuesday.
The increase in revenue was achieved as a result of greater sales of their Eagle Eye AIR platform and growth in their Tier 1 customer base including clients such as Waitrose.
The Eagle Eye AIR platform allows retailers to target with promotions to drive sales and now accounts for 95% of Eagle Eye Solutions revenue.
Their solution allows retailers to target customers individually using customer data and their interaction habits to create millions of bespoke promotions.
Eagle Eye’s largest customer is Canadian retail and pharmacy group Loblaw Companies Limited which delivers 150 million individually tailored promotions per week through theirs brands including Loblaws and Shoppers Drug Market.
Despite substantial revenue increases and a swing to a EDITDA profit of £700,000 the group recorded a £2.3m loss for the year as Eagle Eye implement and number of cost saving and efficiency strategies such as a move to Google’s Cloud Platform.
The group has guided the combination of cost efficiencies and further revenue growth will produce further EDITDA growth in FY 2020.
Tim Mason, Chief Executive of Eagle Eye, commented:
“I am delighted to report a year of continued growth; in revenues, capabilities and market reach, delivering a breakthrough into EBITDA profitability. However, we believe that we are just at the start of our journey. Our customers see the Eagle Eye AIR platform as key to competing in today’s digital retail environment and we are confident that the drive to digital is only going to increase in the years ahead.
“We enter the current financial year with a rapidly expanding pipeline of both UK and international opportunities, and the enhanced ability to service them through our powerful and more scalable new Google Cloud environment. Our expanded geographic reach, increasing base of recurring revenues, blue chip customers and strengthened financial and operational position, means that we look to the future with confidence.”
Shares in Eagle Eye Group (LON:EYE) rose over 5% in early trade on Tuesday following the release.
Griffin Mining shares dip as fundamentals worsen
Metal mining company Griffin Mining Ltd (LON: GFM) saw its share price dip on a consistent deterioration across its financial fundamental.
On a year-on-year comparison of the first half, the Group’s revenues contracted from US$54.1 million to US$38.6 million. This led a dip in operating profits from $21.1 million to $6.0 million, and a drop in profit after tax from $15.3 million to $4.1 million, for the period ended June 30.
The state of play fro Griffin Mining shareholders was similarly downbeat, with basic EPS following other fundamentals, and falling from 8.95 cents to 2.36 cents.
The Company’s production volumes weren’t as downtrodden but neither were they entirely positive. While lead volumes increased from 459 to 494 tonnes and silver rose from 132,689 to 141,306, zinc fell from 16,873 tonnes to 16,692 and gold decreased from 9,492 ounces to 9,099 ounces.16,692 tonnes of zinc (30th June 2018 – 16,873 tonnes);
Griffin Mining comments
Chairman Mladen Ninkov stated, “Although all stakeholders in the Company will be disappointed with the financial results for the first half of 2019, they are directly, and practically solely, attributable to the fall in the zinc price and the tremendously higher smelter treatment charges in the first 6 months of the year. Operations and metal production were generally in line with budget. As is often said, mining is a fixed cost business and, as such, a reduction is sales revenues has a direct and significant effect on the margin of profit. We continue to hope for a higher zinc price and lower treatment charges for 2019 into 2020.”Investor notes
Following the update, the Company’s shares dipped 4.14% or 3.75p, down to 86.75p per share 16/09/19 11:06 BST. The Group’s p/e ratio is 7.63, their dividend yield is not available. Elsewhere in the mining and minerals sector, recent updates have come from; Alien Metals Ltd (LON: UFO), Highland Gold Mining Ltd (LON: HGM), Kavango Resources PLC (LON: KAV), URU Metals Ltd (LON: URU), Resolute Mining Limited (LON: RSG), Bisichi Mining PLC (LON: BISI) and Glencore PLC (LON: GLEN).Markets respond to an eventful weekend: Hulk Boris, Saudi oil and China slumps
Though perhaps one of the few yet to turn green at the sound of the name ‘Boris Johnson’, the prime minister decided the weekend was not for resting, and chimed in to tell the UK he would be like the Incredible Hulk and free the UK from the EU’s grip. On a slightly less amusing note, the drone strike on Saudi Arabia, and a disheartening set of fundamentals in China jammed the emergency break on last week’s rally across markets. Though not as disastrous a turnaround as one might expect, the news was enough to see Brent crude take an 8% hike and stutter growth across indices.
Speaking on the morning’s developments, Spreadex Financial Analyst Connor Campbell stated,
“There was a lot going on this Monday, the markets fighting fires on a few different macro-fronts.”
“The drone attack on Saudi Arabia’s biggest oil production facility, reportedly taking out 5% of the world’s supply, strapped a rocket to Brent Crude. At one point the black stuff had risen from $60.24 to $71.88 in one super-surge, before settling back at $65.29 – still an 8%-plus climb after the bell.”
“This proved to be crucial to the FTSE’s early performance. With Shell and BP rising 3% and 4% respectively, the UK index’s losses sat at 0.5%, allowing it to remain above 7340. In comparison, the DAX dropped 0.7%, leaving it back at 12400, while the CAC shed 0.8%.”
“That’s because overnight investors were served up a reminder that all is not well over in China. Fixed asset investment slipped from 5.7% to 5.5%, while retail sales missed out on the expected bounce to instead fall from 7.6% to 7.5%. Worst of all, industrial production slumped to 4.4% against the previous month’s 4.8% and the forecast 5.2%, doing a number on the FTSE’s mining sector in the process.”
“While the indices dealt with the oil/China news, the pound was somewhat tempering its recent optimism. The Sunday papers were full of reports suggesting the EU and Boris Johnson are perhaps not reading the same book, let alone on the same page, especially with the Prime Minister comparing himself to the Incredible Hulk as he promised to break free of Brussels’ ‘manacles’. Though still near last week’s highs, sterling dipped 0.2% against the dollar and 0.3% against the euro.”
Elsewhere in markets and macro economic news, there have been updates from; ECB stimulus, Lloyds Banking Group PLC (LON: LLOY), Jo Johnson quitting, Hilary Benn’s Brexit delay bill, Parliament being prorogued, Barclays (LON: BARC) and Deutsche Bank (ETR: DBK).Housing market autumn bounce snuffed by Brexit says RIghtmove
According to the UK’s largest property website, Rightmove Plc (LON: RMV), the UK housing market suffered its first price dip for September for eight years (since its last dip in 2010).
The announcement came as average property prices dipped 0.2% or £730 in comparison with August; an irregular shift from the expected trend of a September housing rally which normally christens the start of Autumn.
Rightmove director Miles Shipside said the change owed to (are you tired of hearing it yet?) ongoing Brexit uncertainty with both buyers and sellers waiting to see how Boris Johnson’s refusal to take a No-Deal Brexit off the table plays out.
Shipside commented in today’s release,
“Many have got used to living in the jaws of uncertainty since the referendum over three years ago, and have been getting on with their lives and housing moves,” Shipside said.
“However, as we approach yet another Brexit deadline, there are signs that the increasing gnashing of teeth is causing some to hesitate.”
The Company said new properties entering the market were down 7.8% and 5.5% across all regions on a year-on-year comparison for September.
“In August, we reported a pre-Brexit buying spree with the number of sales agreed up by over 6% compared [with] the prior year, as buyers and sellers decided to get deals secured well before the next Brexit deadline,”
“But a month later, as the deadline gets closer and tensions heighten, there has been a big swing the other way with sales agreed numbers now over 5% below those of a year ago.”
The drops in activity were seen across the country but felt most acutely with a 20% dive in new properties entering the London market.
Speaking on housing trends, accountancy and auditing firm KPMG said that house prices could collapse by 20% should Boris Johnson pursue a No-Deal Brexit outcome, with the greatest decline being borne by Northern Ireland and London and the South East. KPMG added that in the same scenario it would envisage a 6% nationwide decline in 2020, with weak market sentiment meaning a 10-20% drop would “not be out of the question”.
Elsewhere in property development and estate agency news, there have been updates from; Berkeley Group Holdings Ltd (LON: BKG), Redrow plc (LON: RDW), U+I Group PLC (LON: UAI), Hunters Property PLC (LON: HUNT), GCP Student Living plc (LON: DIGS), Barratt Development Plc (LON: BDEV) and Belvoir Group PLC (LON: BLV).
Rightmove shares are currently trading down 1.01% or 5.50p at 536.60p per share 16/09/19 08:10 BST. Peel Hunt reiterated their ‘Reduce’ stance on the Company’s stock. The Group’s p/e ratio stands at 29.57, their dividend yield is 1.20%.
Sterling ends week on a high following Irish border rumours
After weeks of the Pound Sterling and FTSE taking turns grabbing gloomy headlines, this week has been a refreshing change of tune. Lead by encouraging economic performance, ECB stimulus and Benn’s bill, Sterling enjoyed a largely positive week and the FTSE floated higher above its 7200 benchmark. Both British performance indices ended the week with a smile, on rumours that the DUP were willing to soften their position on the Irish backstop. Substantiated or not, the developments were enough to guide the pound to a positive close.
Speaking on index movements on Friday, Spreadex Financial Analyst Connor Campbell stated,
“Sterling’s renewed optimism held strong on Friday afternoon, while the European indices saw a second day of mild post-ECB stimulus growth.”
“It’s been quite the week for the pound. Even with the prorogation of Parliament factored in, it has benefited from the Benn bill’s royal assent, better than forecast jobs and GDP data and, now, a report that the DUP are ready to ‘shift red lines’ regarding the Irish backstop. And while Arlene Foster’s party have denied any such softening, that hasn’t stopped the currency climbing 0.6% against the dollar and 0.8% against the euro, taking it to 7- and 12-week highs respectively.”
“Normally such a sharp rise from sterling would spell trouble for the FTSE. However, the lingering goodwill in Europe following Mario Draghi’s parting QE and rate cut-shaped parting gift allowed the UK index to cross 7350 with a 0.2%. The CAC, interestingly, only added 0.1%, with the DAX more upbeat as it climbed 0.4%.”
“Eyeing its own central bank meeting next week, the Dow Jones was on the timid end of the spectrum. Nevertheless, growth of 0.2% out it above 27230, maintaining a level last seen at the end of July, in the process hopefully putting behind it a traumatic August.”
Elsewhere in large financial player and macro economic news, there have been updates from; ECB stimulus, Lloyds Banking Group PLC (LON: LLOY), Jo Johnson quitting, Hilary Benn’s Brexit delay bill, Parliament being prorogued, Barclays (LON: BARC) and Deutsche Bank (ETR: DBK).
JD Wetherspoons posts profit jump as CEO lambastes politician and economic models
Pub group JD Wetherspoon (LON:JDW) posted a 7.2% increase in annual profit before tax helped by a 6.8% rise in like-for-like sales.
The group also enjoyed an increase in Free cash flow per share to 92.p from 88.4p previously.
Despite the increase in profit and cash flow JD Wetherspoon decided to maintain their Full year dividend at 12p per share.
As has become customary with JD Wetherspoon performance updates, Chairman Tim Martin took the opportunity to attack remain politicians and pour cold water on any suggestion a hard Brexit will hit the UK’s economy.
Tim Martin, the Chairman of JD Wetherspoon commented:
“Journalists regularly ask Wetherspoon for comments on Brexit – although some publications begrudge our few paragraphs on the subject in this section.
“The UK is clearly in political deadlock, parliament having refused to carry out the pre-referendum promise in the leaflet sent to every household which said “The Government will implement what you decide.”
“Democratic power in the UK in the last 30 years has been diluted by a political faction in parliament, the media and boardrooms, which has a quasi-religious belief in the undemocratic EU – with its unelected presidents, MEPs who cannot instigate legislation and unaccountable court. Voters resent this loss of power – and distrust of politicians and the ‘elite’ is the result.
“In recent weeks, the 21 ‘Tory rebels’ (over half Oxbridge), who helped to block ‘no-deal’ were joined by 25 bishops (two-thirds Oxbridge), the latter group asserting (Appendix 3), contrary, many of us believe, to common sense, that no-deal will be disadvantageous to the poor.
“As another straw in the wind, former Supreme Court judge and Reith lecturer Lord Sumption described Brexit supporters as ‘grim fanatics’.
“John Bercow, Emily Thornberry, Dominic Grieve, Keir Starmer, Jo Johnson, Philip Hammond, David Gauke, David Lidington, Hilary Benn, Rory Stewart and many other pro-EU Oxbridge MPs have played a leading role in frustrating the referendum result, by enmeshing parliament in a legal and administrative spider’s web.
“The economic judgement of this faction, led in the past by the likes of Michael Heseltine, Peter Mandelson and Tony Blair, the CBI and the Financial Times, has been extremely poor.
“It advocated joining the disastrous predecessor of the euro, the exchange rate mechanism, the euro itself, and incorrectly forecast an immediate recession in the event of a Leave vote in the referendum.
“Author and athlete Matthew Syed has recently illustrated how a lack of diversity among elites leads to poor decisions. Investment guru Warren Buffett has pointed out that forecasts tell you a lot about the forecaster – but nothing about the future.
“The faction’s forecast today is that leaving the EU without a deal will be a ‘cliff-edge’, a ‘catastrophe’ or a ‘disaster’.
“Remainer MPs’ main argument – having consistently voted against the only deal on offer – to justify their attempts to scupper Brexit, is that costs for consumers and businesses will axiomatically increase in the event of ‘no deal’.
“However, leaving without a deal avoids a legal liability to pay £39 billion, allows the UK to eliminate protectionist import taxes (tariffs) on over 12,000 non-EU products, (including rice, oranges, bananas, Antipodean wine, children’s clothes and car parts etc) and results in resumption of the control of fishing waters.
“Above all, no-deal increases UK democracy – the most powerful economic stimulant.
“It is an absurdity to argue that a reduction in UK input costs, combined with increased democracy, will have a harmful effect on the economy – just as it would be absurd for a business to adopt this argument if its own costs were reduced.
Tim Martin continued his rejection of economic models that suggested Brexit would cause a negative impact and opted to look at potential long term benefits:
“Elite Remainers are ignoring the ‘big picture’, regarding lower input costs and more democracy, and are mistakenly concentrating on assumed short-term problems, such as potential delays at Channel ports – which are easier to extrapolate on their computer models.
“Despite continuing political problems, stemming from the transfer of democratic power to a technocratic elite, Wetherspoon continues to perform well. Like-for-like sales for the six weeks to 8 September 2019 were up 5.9%.
“We currently anticipate a reasonable outcome (pre IFRS16) for the current financial year, subject to our future sales performance.
“As in previous years, we will provide updates, during the year, on the company’s trading.”
Co-op posts mixed results and corroborates Yellowhammer food shortage warning
Diverse British consumer co-operative retail business Co-operative Group reported improved sales alongside a drop in profits, due to challenging conditions experienced by its funeral business. The Co-op Chief Executive then came out to substantiate some of the concerns laid out in the recently published Operation Yellowhammer documents.
The Company celebrated a 12% rise in first half sales on a year-on-year basis, up to £5.4 billion. This period also represented a 22nd consecutive quarter of like-for-like sale growth in its Co-op Food branch, which saw total sales increase by 3% during the period. As a result of the performance, the Group said they were able to return £29 million to its members and £6 million to 4,000 local causes. However, this good news was somewhat offset by a drastic contraction of profits led by its funeral branch. The Co-op said that first half profits dropped from £44 million to £25 million, which it said was led by a 10% drop in death rates. The Group added that it expected Co-op Health to be rolled out nationally by early 2020, and that it had extended its online food delivery trials using zero emission electric cargo bikes and in partnership with Deliveroo. It continued by saying it had re-entered the life insurance market with the launch of Co-op Life Cover, and that it was awarded Grocer of the Year at the Grocer Gold Awards and Consumer Business of The Year at The London Evening Standard Awards.We’ve published our interim results report sharing our progress so far in 2019. Thank you to all our colleagues for your hard work and dedication. We’re doing business that’s good for our members and our communities. #ItsWhatWeDohttps://t.co/WJGRXqOHPv
— Steve Murrells (@Steve_Murrells) September 12, 2019
Co-op comments on their performance
Steve Murrells, Chief Executive, stated,
“We’ve enjoyed another good six months where the strength of our business has led to a further £35 million of value being generated for our members and their communities. Our food business continues to perform strongly in a highly competitive market and has now recorded 22 consecutive quarters of like-for-like sales growth. As our largest business, it is providing the fuel for our growth in terms of member value and community impact.”
“In funerals we are actively re-positioning the business to meet the changing needs of our members. We are the market leader but we will also lead the market in providing better choices and options for our customers in the years ahead. Likewise, the development in our insurance, legal and health businesses will enable us to significantly broaden the range of Co-op services, in areas where our members know the Co-op difference can be clearly seen.”
Allan Leighton, Chairman, said,
“We have made further progress during the first six months of this year and the strength of our business can be seen by our underlying financial position and through the increasing impact we’re having in local communities.”
“The Co-op is now 175 years young, and we have worked hard to ensure that we remain relevant to all generations and in particular younger co-operators. Whether this is using our presence at eight music festivals to introduce people to our values and ways of doing things, or by developing motor insurance products specifically with the needs of young drivers in mind. The Co-op is thriving and we are committed to growing our Co-op difference and impact for generations to come.”