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Associated British Foods (ABF.L)
Primark owner Associated British Foods (ABF) released a trading update on Thursday that provided a mixed bag for investors, driving shares 4% lower.
George Weston, CEO of ABF, said the business had delivered a “significant improvement profitability” in the second half of its fiscal year, due to end on 14 September.
ABF said it expected like-for-like sales at Primark to dip 0.5% in the second half, as poor weather in the UK and Ireland resulted in lower footfall and particularly impacted sales of its seasonal lines in womenswear and footwear.
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Weston also warned that while profitability in its sugar business remained ahead of 2023, it was below previous expectations. ABF forecast that its adjusted operated profit for this part of the business to come in at £200m for the year.
“This is due to a sharp fall in European sugar prices which is now expected to impact sugar profitability in FY25 before recovering in FY26,” Weston said.
ABF completed its second £500m share buyback programme in August and said it intends to extend this by another £100m, which is expected to be completed by the announcement of its annual results on 5 November.
Shares in Tesla were up 4.2% on Wednesday, coming out as the top performer of the session on the S&P 500 (^GSPC).
Tesla is planning to produce a six-seater version of its Model Y electric SUV in China from late 2025, Reuters reported. It has reportedly asked suppliers to prepare for output of its Model Y car at its Shanghai factory to increase by double digits.
Shi Ji, an analyst with China Merchants Bank International (CMBI) in Hong Kong, said the bank expected Tesla’s retail sales volume to reach 65,000 units in August, buoyed by “strong growth in smaller cities”, with momentum continuing into September. As a result, he said that Tesla could post the highest quarterly sales volume in China for the third quarter.
The carmaker also plans to release fully self driving cars in China and Europe early next year, according to as Bloomberg.
Tesla shares were up nearly 3% in pre-market trading on Thursday.
Shares in online retailer ASOS popped on Thursday morning, up nearly 14%, after announcing that it was selling its 75% stake in Topshop and Topman to Danish holding company Heartland.
ASOS said the deal was a joint venture, in which it would continue to hold the remaining 25% share, but would sell the majority stake for a £135m ($177.6m) cash consideration.
It will re-launch Topshop.com within six months of completion. It said the venture would also offer the opportunity to expand Topshop and Topman’s customer reach through wholesale partners, both online and offline.
ASOS also announced it was launching a refinancing, which includes an offering of around £250m in convertible bonds due 2028 and would repurchase part of its outstanding £500m of 0.75% convertible bonds due in 2026.
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The retailer said it expected earnings before deductions for its 2024 fiscal year to be at the top end of consensus estimates but sales to be slightly below guidance.
Russ Mould, investment director at AJ Bell said the update “may be driving the shares higher but it’s less a case of celebration than relief.”
United States Steel Corporation (X)
US Steel shares plummeted nearly 18% on Wednesday, following reports that US president Joe Biden is preparing to block a takeover of the business by Japan’s Nippon Steel (5401.T).
The news is a major blow to the deal, worth nearly $15bn.
Reuters reported that sources said a block on the takeover could be announced as earlier as next week, with Biden expected to give national security risks as the reason for blocking the deal.
US Steel has become a key issue in the run up to the country’s presidential elections in November as the company is headquarter in Pennsylvania, which is swing state.
Democrat candidate Kamala Harris has shared her opposition to the deal, while Republican candidate Donald Trump has also pledged to block it should he be elected.
Housebuilder Vistry was up 5% on Thursday morning, after it reported strong half-year performance.
Vistry said it was on track to deliver more than 18,000 house completions in its 2024 fiscal year, which is ahead of the 14,004 completions already reported by Barratt Developments.
The business also announced a further £130m share buyback programme.
Greg Fitzgerald, CEO of Vistry, said: “We remain confident on delivering our medium-term targets of a 40% ROCE [return on capital employed] and £800m of adjusted operating profit.”
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He added that since its pivot to focus on it partnerships model a year ago, Vistry announced or returned £285m of its targeted £1bn capital return to shareholders over three years.
The stock has been one of the best performers on the FTSE 100 (^FTSE) so far in 2024, up 51% year-to-date. Shares were buoyed by Labour’s landslide victory in the UK’s general election, particularly given Vistry’s focus on affordable housing through its partnerships model.
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