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Retailers lift FTSE 100

Published: 08:38 16 Apr 2014 EDT

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A strong performance from retail stocks helped the top share index higher on Wednesday, with Sports Direct (LON:SPD), Burberry (LON:BRBY) and Tesco (LON:TSCO) leading the way.

Sports Direct jumped 6% to 790p on a bullish broker note from Bank of America Merrill Lynch, which raised its target price on the ‘pile it high, sell it low’ sportswear retailer to 1,070p from 1,000p.

“Our market share analysis suggests that there is potential for Sports Direct to grow its top line at a compound rate of 7% over the next ten years, driven by online sales and expansion into Europe,” the American broker said.

Up-market fashion house Burberry rose 3.3% as it shrugged off fears of a Chinese slowdown, posting a 19% rise in second-half revenues.

Tesco (LON:TSCO) shares were up 2.7% after the supermarket giant’s full-year results were not as bad as expected.

Profits did fall for the second year in a row, though not as severely as feared.

Group trading profit fell in all regions, though there were a few bright spots, such as a 1.6% increase in profits to £194mln at the banking arm, plus positive sales growth online and in the Tesco Express portfolio.

Next (LON:NXT) chased its rivals 1.8% higher, while Weir Group (LON:WEIR) climbed 1.3% after Finland’s Metso turned down its merger bid.

The Footsie rose 0.5% to 6,573, helped by upbeat data from China, which showed its economy grew 7.4% in the first three months of the year.

Retail data from China was also better than expected, which gave Burberry a boost.

In the small-cap space, Landore Resources (LON:LND) shot up 24% to 2.9p, while oil juniors TXO (LON:TXO) and Antrim Energy (LON:AEY) climbed 14% and 7% respectively.

Shares in palm oil group DekelOil (LON:DKL) rose 10% to 1.7p after it said its Ivory Coast plant was profitable in its first full month of production.

Director Lincoln Moore described the passing of this important landmark so early as an “achievement of note”.

Dekel owns 51% of the 60 tonne per hour extraction facility in the village of Ayanouan, which turned out 1,617 tonnes of crude palm oil (CPO) and 189 tonnes of kernels in March.

It sold 594 tonnes of CPO, achieving a price of US$882 per tonne, while the kernels went for US$278 tonnes as it found buyers for 146 tonnes.

The firm revealed the gross margin on those sales was 27-29%, which is at the high end of estimates. It meant the business was EBITDA (underlying earnings) positive.

The focus now turns to ramping up the logistics operation in order to secure fresh fruit bunches for the mill.

Tertiary Minerals (LON:TYM) fell 7% to 9.9p despite unveiling what it calls a “substantial” maiden resource for the MB fluorspar project in Nevada.

The project’s indicated and inferred resources totalled 38.4mln tonnes at a grade of 10.4% fluorspar.

That comprises 8.9mln tonnes in the indicated category at a grade of 10.3%, and 29.5mln tonnes of inferred resources at 10.4%.

It doubles the group’s total resources and means there is now an estimated 7.8mln tonnes of contained fluorspar across the portfolio.

ZincOx Resources (LON:ZOX) was another riser as the zinc recycling specialist revealed its recycling plant in Korea is back up and running.

Portable hotel group Snoozebox (LON:ZZZ) tanked 15% to 9.8p after it proposed a placing to raise up to £11mln at 10p a share.

The company revealed that losses widened in in its full-year figures after a difficult year.


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