‘Beast from the East’ Batters Debenhams

Thursday, April 19: The FTSE 100(+0.16%) continued its rally on the back of rising commodity prices lifting miners higher, and a well-received earnings report from pest controller Rentokil Initial.

Debenhams(-5.10%) initially slipped 10% on the announcement of 2018 interim results due to a steep fall in profit and the departure of CFO Matt Smith to rival department chain Selfridges. H1 pretax profit reportedly fell 85% as UK sales were impacted by adverse weather conditions and a challenging UK retail market. As a result, fiscal 2018 pretax profit is now expected to be at the lower end of market expectations (£50-61m). LFL sales overall fell 2.2%, or 2.8% on constant currency terms as UK LFL store performance of -4.1% weighed on performance.

Shire(+6.13%) was lifted after news hit the wires that there was potential for a bidding war to breakout between Japan’s Takeda and Botox maker Allergan. Early in the day Takeda announced it was in talks with Shire after a £43bn bid was tabled on April 12, valuing the company at £46.50 per share; this was subsequently rejected by Shire. Reuters today reported that Allergan was also considering a takeover approach for the rare diseases drug maker.

UK retail sales suffered worst quarter in a year as they fell 1.2% in March as unseasonably cold weather kept people out of the cold and out of the shops. The March sales decline follows falls in January and February, leaving sales volumes 0.5% lower in Q1 2018, than in the last quarter of 2017.

Across Europe, indices were mixed at the close with the FTSE 100 +0.16 %, the DAX 30 -0.19% and the CAC 40 +0.21%.

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