Sector movers: Morrisons, Ocado give retailers a boost

12th Sep 2013 15:14

A well-received set of first-half results from Morrisons gave a boost to the food retail sector on Thursday, helped by an update from joint-venture partner Ocado.Morrisons reported a 21.8% drop in pre-tax profit for the six months to August 4th from £440m to £344m on sales that were broadly flat at £8.94bn. However, the outfit does expect sales to improve in the second half.The stock was up 1.5% at 301.7p before the close of trade.Jefferies reiterated its 'buy' rating for the retailer today despite what it labelled as "a mixed H1", saying that the stock's valuation is "undemanding" even after its recent strong run. Jefferies said: "The shares have rebounded strongly from the June lows, and this may cap near-term gains. We look forward to evidence of further like-for-like improvements as a future catalyst."Supermarket peers Sainsbury and Tesco were also in demand this afternoon.Morrisons expects to join other supermarkets by launching its home-delivery service by the end of January 2014 through its partnership with online grocer Ocado, which was also on the rise today after releasing a third-quarter update. The group grew gross sales 16.4% to £189.2m, helping it to increase cash levels by 81% to £114.6m. Ocado Chief Executive Officer Tim Steiner said: "We are encouraged by the continuing momentum in sales growth, reflecting an increase in both orders and basket size."Meanwhile, chocolatier Thorntons was extending gains after yesterday impressing with its annual results as it swung to a profit of £5.2m in the year to June 29th, compared with a small loss the year before, as revenues rose 1.8% to £221.1m. The firm said that although consumer expenditure remains under pressure, it is confident further progress can be made as it extends its three-year turnaround plan.Shares were higher today after it announced that the Chairman, CEO and another director topped up their stakes in the company. The stock has now jumped nearly 16% in the last five days alone.High Street retailing peer Greggs was also advancing today.Top performing sectors so far todayIndustrial Metals & Mining 1,618.02 +1.41%Food & Drug Retailers 4,802.02 +0.85%Oil Equipment, Services & Distribution 24,156.96 +0.77%Real Estate Investment Trusts 2,374.66 +0.56%Pharmaceuticals & Biotechnology 11,128.59 +0.47%Bottom performing sectors so far todayElectronic & Electrical Equipment 4,099.95 -1.46%Industrial Engineering 10,412.77 -1.42%Chemicals 10,179.53 -1.09%Personal Goods 26,107.36 -0.91%Financial Services 7,191.22 -0.71%BC