United Kingdom

MARKET REPORT: Morrisons set for Footsie relegation as it lags rivals 

Supermarket Morrisons is set to fall out of the FTSE 100 for the first time in five years after straggling behind rival grocers during the pandemic.

Its shares closed down 0.4 per cent, or 0.6p, to 169.4p last night – adding to a slide over several days that will send it out of the blue-chip index and into the mid-cap market in the forthcoming reshuffle.

Although sales have been on the up and it has managed to slightly increased its share of the market – to 10.3 per cent in the 12 weeks to February 21 – many believe it has lagged behind tech-savvy rivals over the past year.

Morrisons shares closed down 0.4 per cent, or 0.6p, to 169.4p last night – adding to a slide over several days that will send it out of the blue-chip index and into the mid-cap market

It means Morrisons faces its second spell out of the blue-chip index, the last time was in 2016.

Water firm Pennon, which closed down 0.5 per cent, or 4.6p, at 917.6p is also in the firing line.

In their place, holiday firm Tui, down 3.6 per cent, or 16.1p, at 436.7p, and engineer Weir Group, off 2.9 per cent, or 57.5p, at 1948.5p, are expected to move up from the mid-caps. 

But the most noticeable mover is Dr Martens, still revelling in the success of its blockbuster float in January, which is forecast to take a step into the FTSE 250.

Many speculated the group, whose shares fell 1.6 per cent, or 7.7p, to 482.3p, could have gone straight to the FTSE 100, but Tui is likely to pip it. 

Stock Watch - Hotel Chocolat 

Traders had a strong appetite for chocolatier Hotel Chocolat, which rose by 2.2 per cent, or 8p, to 380p by the end of the session yesterday.

The retailer managed to create 130 jobs in the six months to December, as turnover rose by 11 per cent to £102million and profits nudged 3 per cent higher to £16million, helped by the always- lucrative Christmas season.

Another 600,000 people joined its loyalty programme and it launched chocolate subscriptions. It plans to reopen UK stores from April 12. 

It was a mixed day for the major indexes, with the FTSE 100 rising 0.4 per cent, or 25.22 points, to 6613.75, while the FTSE 250 fell 0.2 per cent, or 43.55 points, to 21177.91.

In a busy day of financial results, investors cheered better-than-expected full-year figures from global recruiter Robert Walters.

Profits slumped by 75 per cent to £12million as companies worldwide implemented hiring freezes. 

But vaccine rollouts and indications that things are picking up in Asia, its biggest market, helped shares rise 6.2 per cent, or 32p, to 552p.

Traders revved up Lookers by 4.5 per cent, or 1.8p, to 42.2p after City regulators closed an investigation into the car dealer without imposing fines.

It had ringfenced £10.4million to pay a penalty but the Financial Conduct Authority instead told it off for its ‘historic culture, systems and controls’. 

The probe was opened in 2019 after red flags were raised internally about its sales process, prompting a management clearout and a £19million adjustment to results last year.

Travis Perkins, on the other hand, slid 3.3 per cent, or 48.5p, to 1429.5p, after it posted a £7.7million loss and declined to hand shareholders a dividend.

Sales across the group dropped 12 per cent to £6.2billion last year – but surged by almost a fifth at its DIY chain Wickes as the extra time spent at home during the pandemic prompted cooped-up Britons to spend millions renovating their houses. 

Despite this trend, Travis Perkins has restarted plans to demerge Wickes so it can focus on construction trade sales. It expects Wickes to be a separate listed company by the summer.

Private jet group Signature Aviation said flights were still down in February amid second waves and lockdowns – but by far less than it saw last spring.

It was virtually flat, with stock trading down 0.1 per cent, or 0.3p, to 398.9p, despite a £17million loss as the takeover target’s share price has stayed around the level of a 411p per share bid last month.

Private equity giant Blackstone, Edinburgh Airport-owner Global Infrastructure Partners and Bill Gates’ investment vehicle Cascade await a sign-off from investors for the joint £3.5billion offer.

Elsewhere in aviation, defence contractor Meggitt met a frosty reception after it signed a ‘large, multi-million pound’ deal to supply Boeing’s 737 Max jets with cockpit indicators. It closed down 2.5 per cent, or 11p, at 429.7p.

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