It was another predictably slow start for the markets this Tuesday, though mercifully not as sluggish as on Monday.
Despite the pound slipping 0.1% against both the dollar and the euro, with the currency suffering on Bank of England deputy governor Jon Cunliffe claiming a November rate hike is an ‘open question’, the FTSE couldn’t find its way to any significant growth this morning. Instead the UK index rose 0.1% (at best), leaving it smack bang in the middle of its near 7 week 7500 to 7550 trading bracket.
Part of the reason for the FTSE’s lack of momentum will be the near 4.5% plunge suffered by Whitbread (LON:WTB) following its half year results. On many fronts the interim update was stellar; total revenue rose 7.4% to £1.67 billion, while underlying pre-tax profit was up 6.7% to £328 million. Premier Inn’s figures especially impressed, with the hotel chain’s comparable sales surging 3.6%, an improvement on last year’s 2.4%, with revenue per available room (arguably the more important metric) up 1.8%.
However, investors took umbrage with the performance of Costa Coffee, which saw a meagre 0.6% jump in UK like-for-like sales, compared to the 2.3% rise seen the year previous – for Q2 specifically LFLs were up just 0.1% – alongside a 9.8% drop in statutory pre-tax profit to £59 million. Whitbread also continued to highlight the importance of its Costa Coffee expansion into China, though it faces an uphill battle – of the fewer than 4000 speciality coffee shops in the country, Starbucks (NASDAQ:SBUX) owns more than half (and is opening what amounts to more than one new store a day).
"Disclaimer: Spreadex provides an execution only service and the comments above do not constitute (or should not be construed as constituting) investment advice or recommendations, or a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. Any person placing trades based on their interpretations of the above comments does so entirely at their own risk. Spreadex Ltd is a financial and sports spread betting and sports fixed odds betting firm, which specialises in the personal service and credit area. Founded in 1999, Spreadex is recognised as one of the longest established spread betting firms in the industry with a strong reputation for its high level of customer service and account management.
In relation to spread betting, Spreadex Ltd is authorised and regulated by the Financial Conduct Authority. Spread betting carries a high level of risk to your capital and can result in losses larger than your initial stake/deposit. It may not be suitable for everyone, so please ensure you fully understand the risks involved. In relation to fixed odds, Spreadex Ltd is licensed and regulated by the Gambling Commission under licence number.