Market report: DFS sitting pretty after strong trading

What happened to the FTSE, pound and UK companies on the markets today?

DFS said Britons are spending more money on their homes due to lockdown Credit: DANIEL LYNCH

Furniture retailer DFS’s shares have jumped sharply after it reported trading “significantly ahead” of its previous expectations.

In an unexpected trading statement, the group said it had continued to trade strongly since its last update in mid-July, with intake growth over the last six weeks equivalent to £70m in revenues.

That was on top of the “strong” order book it previously announced, which puts it in line for a further £100m in revenues later in the year.

The group said its performance “reflects a combination of consumers currently spending more on their homes relative to other sectors”, as well as pent-up demand and its improved digital offering.

It warned of uncertainty ahead, however, cautioning that the strong start to the financial year could be offset by Covid-19 or Brexit.

“While positive trading momentum currently remains, we do note that some consumers may be bringing forward spending decisions and this may impact trading later in the financial year,” the group said.

Despite those worries, DFS said its financial headroom had improved substantially, and it was “well-positioned to capitalise on opportunities as its markets recover”.

Shore Capital’s Clive Black called the update “very positive” but praised the group for “keeping its feet on the ground”. DFS shares rose 16p to 166p.

The FTSE 100 dropped, reversing early gains to slide deeper into the red as the session wore on.

Industrial software giant Aveva led blue-chip risers, climbing 314p to £46.46 after saying it had agreed to buy California-headquartered rival OSIsoft at an enterprise value of $5bn (£3.8bn). The acquisition will be funded through a combination of a rights issue and new debt facilities, the FTSE 100 group said.

InterContinental Hotels rose 145p to £48.48 after US real estate investor Service Properties Trust said it would terminate a management agreement with the FTSE 100 company for a portfolio of 103 hotels. The decision ends a dispute between the two companies after IHG failed to pay $26.4m in returns and rents due for July and August. AstraZeneca’s shares edged up 16p to £86.27 after the group said it had dosed the first participants in a trial of the catchily named AZD7442, a combination of two monoclonal antibodies designed to prevent and treat Covid-19.

Marine services firm James Fisher & Sons led fallers on the FTSE 250, dropping 114p to £11.16 after reporting a profit and revenue hit for the first half of the year and cutting its interim dividend by 29pc.

Its final payment for 2019, which it suspended in March, has now been completely scrapped.

Peel Hunt analysts said the group’s performance was “expected to improve” in the second half of the year, although a slower recovery in oil prices was likely to limit performance.

Investment group Apax Global Alpha climbed 5p to 165.4p after boosting its dividend despite a fall in net asset value for the first half.

The group’s total return on its managed assets was minus 0.5pc in the six months to the end of June – a marked improvement on the 12pc negative return for the first quarter.