BUSINESS LIVE: UK debt soars; JD Sports buys Hibbett; ABF foresees ‘significant growth’

UK food price inflation fell for the 14th consecutive month in April, partly driven by a rise in supermarket promotional activity, industry data showed on Tuesday.

Market researcher Kantar said annual food price inflation was 3.2 percent in the four weeks to April 14, down from 4.5 percent in the previous four-week period.

Kantar said items bought on sale accounted for 29.3 percent of supermarket sales, the highest level outside of Christmas since June 2021.

“This emphasis on deals, along with falling prices in some categories such as toilet paper, butter and milk, has helped reduce the rate of food inflation for checkout shoppers,” Fraser McKevitt, head of retail and consumer insights from Worldpanel. Kantar said.

But it noted that prices were still rising rapidly in markets such as sugar and chocolate confectionery and chilled fruit juices and drinks.

Richard Hunter, head of markets at Interactive Investor,

‘For the year as a whole, the group expects growth to be significantly above expectations both in terms of cash generation and profitability. This optimism about the immediate prospects allowed for another increase in the dividend, where the projected yield of 2.7% including specials remains somewhat trivial in comparative terms, but nevertheless shows a declared direction of travel.

‘In the background, the latest £500m share buyback program is underway, which should provide some support to the share price.

‘The group is aware of the potential obstacles on the road ahead, including but not limited to consumer pressure, geopolitical concerns, supply chain disruptions that are currently under control and the uncertainty they could bring. several general elections later this year.

“However, the diversified nature of AB Foods’ business offers some insurance against most financial outcomes, while at the heart of the current success is a Primark business that continues to flourish both at home and abroad.”

The London stock market faces “death by a thousand cuts” as two other FTSE 250 companies bow to foreign takeovers.

In another frenetic day of negotiations on the Square Mile, construction firm Tyman and music group Hipgnosis backed proposals that would see them bought out of the UK market.

Britain’s Debt Management Office (DMO) has accelerated its plans to issue government bonds in the current financial year, following official OBR data that showed a larger-than-expected budget deficit in the last financial year.

Government debt sales for 2024/25 are now projected at £277.7 billion, £12.4 billion more than the previous mandate published last month.

Most of the revision reflects the fact that the government’s cash deficit in the 2023/24 financial year was £10 billion higher than forecast in March’s spring budget, according to official figures published on Tuesday.

Retailers guided the FTSE 100 to an all-time high yesterday.

In a positive day for investors, London’s blue-chip index rose 1.6 percent, or 128.02 points, to 8,023.87.

That left the FTSE 100 above its previous record close of 8,014.31 in February last year.

The FTSE 250 mid-cap index also rose 1.1 per cent, or 208.09 points, to 19,599.39.

High Street chain stores and major supermarkets led the way as optimism ran through the city’s trading floors.

Associated British Foods, owner of Primark, expects “significant growth” in profitability this year after profits rose 39 percent in the first half, driven in part by margin recovery at its clothing chain amid the opening of new stores.

The group, which also owns major sugar, grocery, agriculture and ingredients businesses, said adjusted operating profit, its key profit measure, was £951 million in the six months to March 2, with an increase revenue of 2 per cent to £9.7 billion.

“The group has delivered a strong performance in the first half and is on track to deliver significant growth in both profitability and cash generation above expectations at the start of this financial year,” he said.

It previously forecast “significant progress” in full-year earnings.

Primark’s first half revenue rose 7.5 per cent to £4.5bn, with like-for-like sales rising 2.1 per cent and margin recovering to 11.3 per cent, up from 8.3 percent.

JD Sports Fashion is to buy US sportswear retailer Hibbett for around $1.08bn (£899m), as the British sportswear retailer expands across the south-east of the United States.

JD Sports, Britain’s largest sportswear retailer, will pay $87.50 per Hibbett share in cash, representing a premium of about 20 percent over the U.S. firm’s latest closing price.

The Bury, Greater Manchester-based company said it expects to finance the deal and refinance Hibbett’s existing debt through its existing US cash resources of $300 million and a $1 billion extension to its facilities. existing banking institutions.

The expanded group would have combined revenues of around £4.7bn in North America, JD Sports said, adding that the region’s contribution to total sales would rise to around 40 per cent from the current 32 per cent.

The FTSE 100 closed at a record high yesterday as easing tensions in the Middle East and hopes of interest rate cuts in the UK sent shares soaring.

On a bumper day for savers with money tied up in the stock market through pensions, Isas and other investments, the blue-chip index closed up 1.6 per cent, or 128.02 points, at 8,023. 87.

That eclipsed the previous record close of 8,014 in February last year.

Government borrowing was £6.6bn higher than forecast last year, reaching £120.7bn as wages and benefit payments rose, new data from the Office for Budget Responsibility shows.

Public sector net borrowing was £7.6bn lower than a year earlier in the 12 months to March 31, but was higher than the OBR’s forecast of £114.1bn.