Markets report: Ocado surges after M&S tie-up clicks

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

Shares in Ocado surged by 8pc after the group raised its guidance following a strong sales performance.

The logistics and delivery group said trading across its recently launched joint venture with Marks & Spencer had “remained strong through the fourth quarter”, with “high demand” continuing as consumers migrated to online shopping.

It raised its expectations for full-year underlying profit (Ebitda) from £40m to £60m. Finance chief Duncan Tatton-Brown said that Ocado did not expect the surge in sales to hold up for as long after the peak in March and April, but Britons had continued to embrace home delivery.

The FTSE 100 group is eyeing a move into clothing and homeware after it cemented its position as a pandemic winner with further acquisitions. It will buy San Francisco’s Kindred Systems, which develops robots used in picking and packing online orders, for $262m (£203m) and robotic arm designer Haddington Dynamics, based in Las Vegas, for $25m, if US watchdogs approve.

Ocado’s shares climbed 183p to £24.59, leaving it as the FTSE 100’s top riser on a day of solid gains for London’s blue-chips. Pressure from a looming second lockdown in England, announced over the weekend, was easily offset by a rebound from last week’s losses.

A continued expansion in activity for Europe’s manufacturers boosted heavyweight energy firms Royal Dutch Shell, up 43.4p to 972.4p, and BP, up 8.6p to 205.2p.

Losers on the FTSE 100 included JD Sports, which dropped 50.2p to 691p on lockdown fears, and Ladbrokes owner GVC Holdings, which fell 33.2p to 933p after warning it expected a £37m hit to its underlying profits based on looming closures in England, and existing measures in Wales, Italy and Belgium.

Citi’s Monique Pollard noted the figures did not include the offsetting effect of stronger online demand.

The FTSE 250 slipped slightly as retail, leisure and travel stocks took a hit on new lockdown fears.

Serco shares plunged furthest among mid-caps after the Government announced it was renationalising the contract to maintain Britain’s Trident missile submarine’s nuclear warheads.

The outsourcer, which has a 24.5pc stake in work operating the Atomic Weapons Establishment, yesterday confirmed weekend reports of the plan. Liberum’s Joe Brent said the loss was “not a surprise”, but warned that it was still “material” for Serco, given AWE represented 28pc of the group’s free cash flow in 2019. Serco’s shares fell 17.2p to 112.2p.

At the opposite end of the index, white goods retailer AO World – a big winner of the first lockdown – jumped 23.5p to 384p as investors hoped Britons would continue to spend big on home improvements.