Investor appetite grew for food retailers as speculation swirled that Qatar’s sovereign wealth fund was once again considering a bid for Sainsbury’s.
The rumour did the rounds late last week and took on a new lease of life on Tuesday, when it emerged that the Qataris had sold a big tranche of shares in Barclays and traders pondered what they might do with the money. Sceptics, however, pointed out that a takeover attempt looks unlikely given that the Qataris did not take part in Sainsbury’s recent fundraising, thereby diluting their holding.
Home Retail Group, owner of the Argos and Homebase chains, posted interim benchmark pre-tax profit in line with expectations at £123m. Shore Capital rated the retailer a buy and said that weak comparatives to come, the demise of rival Woolworths and a less promotional trading environment mean Argos “could surprise on the upside”. Investec, also advising buy, said: “Cash generation has remained very impressive.”
Entertainment group HMV showed off its first cinema on Monday, and analysts left impressed. Pali International said: “Not every store has room for a cinema on the floors above, but it’s a great idea, showing how HMV is working to exploit the synergies between the different forms of entertainment.”
DSGi boss John Browett hosted City visitors to the new 45,000 sq ft Currys/PC World megastore in Fulham. Broker Singer noted: “The extra space has given the store a significant increase in range and authority, and has allowed a more diverse pricing architecture to be adopted, especially at the ‘best’ end of the range.”
Analysts also visited value homewares group Dunelm, which held an investor day last week. The retailer impressed, and its share rose over the week.
Troubled JJB Sports was one of the week’s biggest losers. The shares fell as one if its top shareholders, Crystal Amber, cut its stake from 14% to 5.4% ahead of a planned fundraising by the retailer. Crystal Amber insisted, however, that it remained committed to JJB, which is still its largest holding. JJB will hold an EGM next week to approve its fundraising.
Clinton Cards was the week’s biggest riser after reporting an improving like-for-like trend in its preliminary results, which beat expectations. House broker Numis rated Clinton a buy and said the figures should be a catalyst for a re-rating of the retailer.