Sector movers: Home Retail boosts retailers, Danone dents food stocks

19th Jun 2012 15:50

With Home Retail's market value increasing by a quarter, the general retail sector was the best performing category on Tuesday afternoon.The stock jumped in early trading after revenues at its Argos division came in at £819m for the quarter, down just 0.2% on a like-for-like basis. The City consensus was for a 4% fall in like-for-like sales in the three months to the start of June after the wettest April in 100 years. The bounce in the share price - up 24.75% at 92.75p - seemed to ignore the fact the group was hit by an 8% fall in sales at Homebase. Like-for-like sales at the DIY chain declined by 8.3% in the three months to June, driven down by seasonal products, which make up almost half of total sales and dropped by 15%. Wine merchant Majestic Wine is also extending its advance after reporting record annual profits on Monday. Pre-tax profit rose to £23.2m in the 53 weeks ended 2 April 2012 from £20.3m the same time a year earlier. Total sales were up 8.9% to £280.3m, just below forecasts of £281.4m. Like for like sales in UK retail stores rose 2.6%. Shares gained a further 1.74% today.Meanwhile, food producers were on the decline today, under pressure after French dairy products giant Danone issued a profit warning, citing tough trading conditions in Europe.The Activia yoghurt maker now expects its 2012 operating margin to be 50 basis points lower on a like-for-like basis than the prior year. Danone had expected margins to remain stable this year but is facing a greater-than-expected drop in consumer spending in southern Europe. The company singled out Spain as the most affected market, where raw-material costs have risen more than anticipated and Spanish consumers switch to less expensive products. In London, Premier Foods, Unilever, Dairy Crest and Tate & Lyle were all suffering losses in afternoon trade.Top performing sectors so far todayGeneral Retailers 1,701.48 +3.76%Industrial Metals & Mining 3,027.12 +3.36%Life Insurance 4,093.72 +3.15%Banks 3,732.80 +2.87%Oil Equipment, Services & Distribution 22,951.67 +2.63%Bottom performing sectors so far todayFood Producers & Processors 5,521.10 -0.36%BC