Updates from Morrisons, Wetherspoon and Tate & Lyle
Europe saw falls of -1.99% from the French Cac 40 while the German Dax slumped -1.96%. Overnight, Asia echoed the debt anxiety with the Nikkei 225 down -1.51%.
First off this morning, grocer Morrisons. Third quarter underlying sales have deteriorated with total sales (minus fuel) slipping -0.4%. Worse, like-for-like sales slumped -2.1%. Morrisons maintains the business is financially strong but the numbers are disappointing, especially when compared with rival Sainsbury's which has seen a +0.4% jump in market share in the last year.
Morrisons though are opening new stores at a slower rate than rivals. But they are also lag with an online operation and have been late with non-food offerings like clothes (it plans to offer a basic clothes brand, Nutmeg, from the Spring).
"We expect the market," says Morrisons, "to remain challenging for the remainder of the year. However we continue to manage the business tightly and anticipate that our full year financial performance will be broadly in line with our expectations."
Next, quarterly numbers from Weatherspoon. The pub chain claims like-for-like sales increased 7.1% with total sales increasing 11.1% helped by a strong performance during the Olympics and Paralympic games. However Weatherspoon says it does not expect this level of sales growth to be sustained for the rest of the financial year.
Operating margin was 8.6%, approximately 0.4% lower than the last financial year, due to increases in costs in areas such as tax, utilities, labour and bar and food supplies, combined with increased marketing costs says the pub and dining player.
The VAT disparity between supermarkets and pubs plus more stealth taxes (which apply to pubs but not to supermarkets) continue says Wetherspoon. "In spite of these challenges our sales, profit and cash flow remain resilient and the board continues to aim for a reasonable outcome in the current financial year."
Finally, half year results from Tate & Lyle. Group sales climb +7% to £1,631m with adjusted operating profit up +2% to £195m. But statutory operating profit falls -26% to £187m and profits before tax slip -28% to £172m.
Specialty Food Ingredients sales climb up 5% (6% in constant currency) while Bulk Ingredients adjusted operating profit climb 6% (7% in constant currency) with strong performance from sweeteners.
The dividend rises +4.2% to 7.4p. In Specialty Food Ingredients the company expects to achieve steady volume growth and sales growth for the full year with firm demand for liquid sweeteners in the US to continue; demand in other food markets should be stable, it predicts.