Tesco trounces the opposition
SIR Terry Leahy's juggernaut Tesco continues to steamroller its supermarket rivals. Despite having to raise food prices this year along with its rivals after freak weather around the world affected harvests, it still has more than 31% of the grocery market.
Data this week also reveals that Tesco.com, its online order business, has captured a huge 66% of all online sales in the first seven months of this year. Mega sales of toilet rolls and bananas have helped it to leave its nearest competitor Asda, with just 16%, miles behind.
Tesco recently hit an all-time high of 377½p after the Daily Mail revealed it would soon be intensifying its assault on the non-food sector with the launch of its Tesco Direct catalogue in September.
Surprisingly, however, it has still lagged the share price performance of rivals Morrison (unchanged at 217¾p) and Sainsbury (1¾p better at 356p) this year. Yesterday it eased 2¾p to 367¼p.
Philip Dorgan at broker Panmure Gordon says there is still plenty to go for and believes interims on October 3 will confirm strong UK trading.
He expects like-for-like sales in the secondquarter will be much better than Q1's 4.5% increase, boosted by the World Cup, excellent July weather and the benefits of aggressive and sustained price investment.
When Wall Street lost an early 31 point gain to trade 58 lower after a National Association of Realtors report said sales of existing homes had plunged to a two-year low, the Footsie fell away to finish 42.6 points down at 5860.
Early sentiment had been affected by mining giant BHP Billiton's (42p lower at 1014p) results. Stimulated earlier in the week by mega break-up rumours, Anglo American succumbed to profit-taking and lost 90p to 2380p.
Premier Oil's erratic performance featured in the FTSE 250. Sold down to 954p at the outset on news of lower-than-expected production at the Chinguetti oil well in Mauritania, in which it holds an 8% interest, the shares rebounded to close 56½p better at 1042p.
Vague bid rumours did the rounds as did gossip that a positive update on its Dua discovery well in Vietnam could be on the agenda.
However, 19% shareholder Hardman Resources was left nursing a 5p deficit at 60p after its revelation that recoverable reserves at Chinguetti are now likely to be up to half of the 123m barrels originally assumed.
BG, which has a 10% interest in the field, eased 1p to 694p. Oriel Securities says Hardman is a buy because its share price has fallen by more than 40% since Chinguetti's problems began.
Responding to a UBS buy recommendation and 675p price target, PayPoint jumped 60p in a thin market to 560p. The broker points out that the leading payment collection company, with a network of more than 15,000 outlets, has fallen 23% in the last three months and looks oversold.
Support services group Connaught edged up ¼p to 201½p after announcing plans to move to a full listing from Aim in order to provide increased liquidity for its shares.
Stephen Hill, corporate finance director of Serco since 2002, has been appointed finance director with David Wells becoming his deputy and company secretary.
Positive Phase II results for Trinam, its gene therapy for kidney dialysis patients, helped Ark Therapeutics rise 3¼p to 93p. Analysts have suggested that if Trinam reached the market it could generate peak sales of £246m.
Biophysics company Avacta, the former cash shell Readybuy, firmed 0.13p to 3¾p on talk of a collaboration agreement with UCB Celltech.
Grove Energy improved ¼p to 33¾p following its award of two exploration permits in Tunisia. Galahad Gold firmed ⅜p to 9⅝p following a positive drilling report from Northern Dynasty Minerals, in which it holds a 20.2% stake.
TripleArc, the print procurement solutions provider, added ½p to 3½p following a positive annual meeting.
Trading is in line with expectations and healthy underlying cashflow is leading to further debt repayments. Altium's target price is 10p.
• FORMER dotcom entrepreneur Charles Cohen via broker Evolution brings Probability to Aim today. Placed at 76p, shares of the company which operates casino, bingo and lottery games for mobile phone users, as well as associated payment services, should attain a small premium. It is the recognised leader in the emerging market of mobile gambling and has not taken any bets from customers in the US.
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