Tesco (TSCO) shares rose 3 per cent in early trading after it raised full-year forecasts on the back of surging profits and noted market share gains and easing inflationary pressures.
Britain’s biggest supermarket grew revenues by 5 per cent in the half-year to 26 August, with pre-tax profits rising from £396mn last year to over £1.2bn this time. Chief executive Ken Murphy said a “relentless focus on customers, combined with significant cost reductions from our save to invest programme” drove the performance.
Management now forecasts a retail adjusted operating profit of £2.6-£2.7bn for the year, compared to a previous estimate of £2.5bn. Retail free cash flow expectations also received a bump, with this now forecast to come in at £1.8-£2bn against medium-term guidance of £1.4-£1.8bn. CA
Vistry's share price tumbles
Vistry's (VTY) share price sank 5 per cent in early trading after analysts downgraded the stock. UBS cut the housebuilder's rating from 'Neutral' to 'Sell' this morning, arguing its pivot to developing affordable housing was "too good to be true". It said the move would require "near record volumes" of housebuilding, adding that it was concerned about Vistry's high leverage compared to its peers and its fair value adjustments.
UBS's bearish note release comes after Jefferies downgraded Vistry from 'Buy' to 'Hold' yesterday afternoon and cut its target price for the stock from 1231p to 999p. ML
Qinetiq gets bigger in America
Defence company Qinetiq (QQ) announced its second award from the US in two days. The latest $127mn (£105mn) deal is a five-year contract to support the Defense Strategic Capabilities Office. It was won by the Avantus cyber security and data specialist Qinetiq bought for $580mn last year and follows a $224mn contract Avantus landed from the US Space Development Agency in August. MF
Vertu boosts revenues
At its February year-end, Vertu Motors (VTU) revealed that its top line increased by a fifth in its interim results. Vertu believes the increase in reported profits reflects mounting scale benefits, along with the positive influence of increased digitalisation, cost efficiencies, and targeted capital allocation.
Pre-tax profits increased by 12 per cent to £30.2mn, although only Vertu’s fleet & commercial arm delivered an improvement in the gross margin — a modest 0.4 per cent. Nonetheless, gross profits for both new vehicles and fleet & commercial were up by a third, while aftersales receipts were also on the rise. MR
