Three things you need to know in the financial markets this morning from investment writer, Tony Cross.
WM Morrison Supermarkets
There’s a Q1 sales update from Morrisons [LON:MRW] out this morning, covering the 14 week period from 3rd February to 10th May. Like for like group sales excluding fuel were up 5.7% against the same period a year ago, but the stand out here is arguably the fact that over the last two weeks of the quarter, the increase was an even more pronounced 10.8%. Online delivery capacity has more than doubled and the company is continuing to expand its presence on Amazon and there’s also been a tie up with Deliveroo at 130 stores. The company notes that the additional costs it has incurred in its COVID 19 response will absorb all the benefits of the business rate holiday it has been granted by the government, but if sales figures can be sustained, then shareholders presumably still stand to benefit here.
One high street play that has been served a particularly rough deal by the pandemic must be Moss Bros [LON:MOSB] who have today issued an update on their financial position. Not only are stores closed to adhere with government guidelines, but any resumption of large formal gatherings still seems some way off and with so many working from home, demand for suits is depressed, too. Digital sales will however resume tomorrow with a reduced workforce and plans are afoot to start reopening stores from June 1st. The company adds that it can withstand a significant decline in revenues until the second half of FY21, but given the sector they specialise in, any rebound is likely to be slow.
There’s a trading update from AO World [LON:AO] out today and this is a company that should be well positioned in the current crisis given the market’s rapid shift to online. However it seems that details of any success won’t be made public until the release of full year results in two months’ time. The company does acknowledge that despite a decline in the overall market of the categories in which they operate, they have grown market share and seen an increase in demand since the lock down came into force. That suggests maybe investors will have something to cheer come the summer.
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