Ocado Retail has announced a significant upgrade to its revenue guidance for the fiscal year 2024 after a bumper period of trading for its joint venture with Marks & Spencer.

Ocado has revised its previous projection of mid-to-high single-digit revenue growth to a low double-digit percentage increase. This upward adjustment follows an impressive third-quarter performance, in which retail revenue surged by 15.5% to reach £658 million. Profit guidance remains unchanged.

The decision to raise revenue guidance is underpinned by Ocado’s remarkable streak as the UK’s fastest-growing grocer for seven consecutive months. Investors have dumped Ocado’s stock this year on concerns about the technology side of the business, but the retail run should be something to take some encouragement from.

Ocado’s pricing mix has helped support sales and grow average weekly orders. Total items sold increased 15.4% year-on-year, and average weekly orders rose 14.7%, reaching 437,000. Ocado’s active customer base expanded 10.3% year-on-year to 1.06 million.

Ocado has managed to maintain a broadly flat average basket value of £120.97.

“Our strategy remains focused on giving our customers unbeatable choice, unrivalled service and reassuringly good value. We’re seeing the momentum of this, with more customers shopping with us more often, getting even better service at better value,” said Hannah Gibson, Ocado Retail’s Chief Executive Officer.

“We know what our customers love, and we’re focused on our proposition every day. This includes our widest ever choice including more M&S food, more convenience with better availability of delivery slots and products, further improving our high perfect order rate and better value for money through our Ocado Price Promise and our latest Big Price Drop.

“We’re pleased with the progress we’re making and excited about how much more there is to deliver.”

The FTSE 100 was in the red on Wednesday as interest rate concerns crept into markets ahead of the Federal Reserve’s interest rates decision tonight and the Bank of England’s tomorrow.

Markets seemed immune to interest rate worries earlier in the week, but a mixed UK inflation report released on Wednesday sparked a wave of selling in early trade.

“The optimism which had been simmering on financial markets is coming off the boil ahead of crunch interest rate decisions,” said Susannah Streeter, head of money and markets, Hargreaves Lansdown.

“While inflation in the UK is unchanged at 2.2%, a rise in services inflation mainly due to a big leap in airfare costs is likely to keep policymakers more reticent about reducing rates again on Thursday. The FTSE 100 has fallen back slightly in early trade as uncertainty surrounds central bank policy.”

Investors will also have one eye on the Fed and the extent they cut later today. The Federal Reserve is widely predicted to cut interest rates later. However, the big question is whether they cut by 25bps or 50bps and risk unnerving markets with a negative market assessment.

“Traders have priced in a 61% chance of the Fed cutting US rates by half a percentage point today,” said Russ Mould, investment director at AJ Bell.

“That feels like a step too far as the Fed might want to start the rate cut journey slow and steady, rather than going in headfirst with a big cut as that might send negative signals to the market that it is really worried about the state of the economy.”

Legal & General

Legal & General shares were under pressure on Wednesday after the group announced it was disposing of UK house builder CALA Group as part of their capital allocation plans. L&G’s capital allocation strategy didn’t go down well with investors when it was announced earlier this year, and its latest move hasn’t either. Shares were down 1.9%.

“Legal & General was among the top fallers on the FTSE 100 after announcing the sale of its housebuilding business, Cala. Investors might be disappointed that it isn’t getting the full £1.16 billion cash up front. Just over half the money will be paid over a five-year period,” Russ Mould said.

“Legal & General’s shares have been weak since its strategy update in June. Therefore, it’s not a surprise to see the company imply it might use some of the sale proceeds to fund share buybacks as it needs to deliver some more positive news to win back the market’s favour.”

An upgrade to ‘buy’ from Goldman Sachs analysts helped IHG to the top of the leaderboard with a 2% gain.

Tekcapital shares gained on Wednesday after it announced plans to list its Generative AI portfolio company GenIP on AIM and provide UK-focused investors with the opportunity to gain exposure to a pure play in the rapidly expanding artificial intelligence market.

In a surprise announcement released on Wednesday, Tekcapital CEO Cliff Gross said, “We are excited to announce the forthcoming IPO of GenIP plc. A product of Tekcapital’s technology incubator, GenIP’s Invention Evaluator and Vortechs have been instrumental in commercialising numerous technological innovations, allowing them to develop from a clean piece of paper to operating companies and listed spinouts.”

Investors were evidently encouraged by the news, with Tekcapital shares jumping 10% in the early minutes of trade.

Tekcapital had previously announced plans to launch a Generative AI company. However, shareholders will note that with GenIP, Tekcapital has broken with its traditional model of forming technology companies as private entities and providing growth capital before listing them.

Tekcapital has decided the best approach is to offer GenIP to public markets as soon as possible and provide investors with the opportunity to take a stake in the company in the very early stage of it’s growth story.

Despite only launching its Generative AI services recently, GenIP has won over 40 orders for its AI-powered analytical assessments, which help research organisations judge the commercial viability of new technologies.

According to GenIP’s website, their clients include leading institutions such as Brazil’s National Nuclear Energy Commission CNEN, Fundación Copec UC, and the University of Huddersfield.

“We believe that GenIP’s unique business model offers investors a valuable opportunity to engage with the rapidly expanding Generative AI analytics market and the research institutions and technology companies that fuel much of the world’s innovation,” said Melissa Cruz, CEO of GenIP.

GenIP will be Tekcapital’s second IPO of 2024 after the company listed MicroSalt in February. MicroSalt shares tripled within six months of listing before falling back.

AFC Energy has stepped up its push into ammonia cracking with the launch of wholly-owned subsidiary Hyamtec Limited, aimed at commercialising the company’s next-generation distributed ammonia cracking business.

Ultimately, the goal is Hyamtec’s offering will help provide an affordable route to hydrogen energy production.

Hyamtec’s key technology advantage lies in its ability to enable industries to decarbonise without the need for extensive new infrastructure, which could significantly lower the barriers to adoption.

AFC Energy has invested years of research and substantial resources into pioneering the design and development of modular, compact ammonia crackers. The company says Hyamtec can potentially transform multiple sectors, from heavy industry to transportation. Hyamtec is targeting ammonia conversion for large-capacity combustion engines in power generation, marine, and mining sectors.

The company is also set to provide modular, purified hydrogen production for fuel cells and transport applications, addressing the growing demand for clean mobility solutions.

Hyamtec’s cracker technology has already demonstrated impressive versatility. It has successfully integrated with both ammonia combustion engines and technologies designed to purify hydrogen for fuel cell applications. This flexibility offers practical, scalable solutions for industries grappling with high decarbonisation costs and infrastructure challenges.

As a wholly owned subsidiary of AFC Energy, the company believes Hyamtec will have increased flexibility in seeking financing for its growth.

“The global transition to net zero is driving the urgent need for innovative hydrogen solutions, and ammonia cracking is emerging as a key enabler for industries aiming to decarbonise,” said Gary Bullard, Chief Executive of AFC Energy.

“With years of investment behind us, AFC Energy has built a robust ammonia cracking technology that aligns perfectly with the needs of heavy industry. The creation of Hyamtec allows us to fully capitalise on this technology, bringing it to market in a way that unlocks new growth opportunities, both in the UK and globally.

“We are excited to offer a scalable solution that can significantly lower hydrogen costs for industrial use without requiring extensive new infrastructure. This approach, combined with the strength of our existing fuel cell business, positions us to provide dual pathways for cleaner energy solutions. By showcasing the unique potential of Hyamtec, we invite strategic partners and investors to join us in accelerating the adoption of hydrogen technologies and driving the next wave of industrial decarbonisation.”

Kingfisher shares jumped on Tuesday after the DIY specialist announced half-year results that weren’t as bad as expected.

Investors are becoming accustomed to Kingfisher’s poor updates, and any hint of positivity can have a material impact. 

That positivity came in the form of half-year results that beat expectations on Tuesday, although revenue still fell over the period. Sales were down 1.8% to £6.75bn.

Consumers still concerned about high interest rates and feeling the effects of inflation are holding off on big-ticket purchases, which is affecting B&Q owner’s sales. 

”Kingfisher has posted a somewhat flat set of results,” said Adam Vettese, market analyst at investment platform eToro.

“Whilst the top line numbers are slightly off, it does represent an improvement on their update earlier in the year which did flag some cause for concern that conditions were becoming quite tough.

“Tighter household budgets and higher interest rates have meant consumers have tended to repair and renovate as opposed to moving to a shiny new house. This in turn however has seen ‘big-ticket’ sales drag on the numbers for the same reason. Whilst the company seems to have stopped the rot and the market is now better than initially feared, it’s safe to say the B&Q and Screwfix parent company is no longer enjoying the pandemic DIY boom of a few years ago.”

However, investors are looking past revenue figures to the profit upgrade for the full year. Despite the group posting falling revenues for the recent six-month period, Kingfisher increased their profit guidance for the full year.

“The company is now expecting adjusted pretax profit to come in between £510 and £550 million, instead of in a range of £490 to £550 million. Investors had already expected a difficult reading for the first half, so the fall in profits by 0.5% didn’t knock sentiment further,” said Susannah Streeter, head of money and markets, Hargreaves Lansdown.

The higher profit guidance is the result of the action on costs in recent periods starting to filter down to the bottom line. Its not lost on investors that if the action on costs is accompanied by growth of the top line, Kingfisher are set for stronger profit going into the future.

Kingfisher shares were over 6% higher at the time of writing.