Ocado bolsters link with Morrisons and sparks investor shopping spreeComments Off on Ocado bolsters link with Morrisons and sparks investor shopping spree
Impatient investors might still be waiting for Ocado to sign its first overseas deal, but they had reason for optimism today as the grocery deliveries firm extended its deal with Morrisons in the UK.
The FTSE 250 company, whose shares have sunk more than 25% in a year, confirmed it would share some of the space with the UK’s fourth-largest supermarkets group at its new “customer-fulfilment centre” in Erith, which is under construction.
The pair have been partners since 2013 when Ocado helped Morrisons launch its overdue online service.
Analyst Clive Black at Shore Capital, house broker to Morrisons, hailed it as “good news all round” and though not a fan of the stock, he lifted his rating on Ocado from Sell to Hold.
The news triggered a shopping spree for investors. Ocado shares climbed 4.2p, or 1.5%, to 280.5p, adding to yesterday’s late surge in anticipation of a deal, while Morrisons, now closing in on Sainsbury’s £4.5 billion market value, was 3.9p fresher at 191.9p.
The FTSE 100 continued its steady progress, putting on 16.12 points to 6825.25, the blue-chip index’s highest mark since May 2015.
Engineering technology firm Smiths Group added to its 40% rise this year with a 39p, or 3%, increase to 1329p as it said revenues and profits for the past 12 months were greater than expected.
Its weapons detection business and a stronger US dollar helped it to offset a slump from its John Crane energy business.
Investors jumped on board easyJet, which was 34.19p better off at 1073.19p, after an upgrade from Hold to Buy by Cantor Fitzgerald, arguing this year’s terrorism and Brexit-linked share falls are unwarranted.
The group of listed companies which turn early-stage university laboratory ideas into fully fledged businesses came under selling pressure as IP Group, down 5.5p at 154.7p, warned of the impact of Brexit.
The FTSE 250 firm, which swung to a first-half loss from a profit the year before, warned Brexit may have “some impact on specific portfolio company financing rounds”. AIM-listed Amphion Innovations, a smaller rival to IP Group, fell 0.62p to 4.38p.
Sticking with the junior market, shares in online clothes seller Boohoo, which suffered growing pains when it went public in 2014, jumped 5.1p to an all-time high of 79.6p as it upgraded annual profit expectations.