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FTSE 100 movers: Ocado tumbles on update; Diageo rallies
(Sharecast News) - London's FTSE 100 was up 0.1% at 7,866.87 in afternoon trade on Tuesday. Global drinks giant Diageo rallied after saying it was buying Don Papa Rum of the Philippines for €260m up front.
Diageo added that it could pay out an extra €177.5m to 2028 subject to performance, "reflecting the brand's current growth potential"
"The super-premium plus segment of the rum category is in the early stages of premiumisation, with a compound annual growth rate (CAGR) of 18% in Europe and 27% in the US between 2016-2021. Through the same period, Don Papa Rum consistently outperformed the market in Europe, delivering a 29% CAGR," the company said.
Ocado tumbled after it said that fourth-quarter sales at Ocado Retail - its 50:50 joint venture with Marks & Spencer - were more or less flat as customers shopped less and bought less.
Retail revenues nudged up just 0.3% versus the same quarter a year earlier, coming in below the company's guidance for mid-single digit sales growth.
Russ Mould, investment director at AJ Bell, said: "A 2023 recovery in the shares of online groceries firm Ocado was snuffed out after the company reported sales growth which was dwarfed by inflation and by the performance of traditional supermarkets and offered an uninspiring forecast for the rest of the year.
"While Ocado is winning new customers, people are buying less. This has an outsized impact on online deliveries which cost roughly the same to make whether the order is two potatoes and a block of cheese or a full weekly shop.
"Even with tiered charging based on how much you order, shrinking basket sizes are still likely to have a material impact on margins. Ocado is also at a premium price point which isn't exactly aligned to the pressures on household budgets in the UK."
FTSE 100 - Risers
SSE (SSE) 1,711.00p 1.69% Diageo (DGE) 3,753.50p 1.40% NATWEST GROUP (NWG) 300.20p 1.25% Weir Group (WEIR) 1,831.50p 1.19% BAE Systems (BA.) 841.00p 1.13% BT Group (BT.A) 131.75p 1.11% Haleon (HLN) 327.30p 1.02% Imperial Brands (IMB) 2,068.00p 0.88% InterContinental Hotels Group (IHG) 5,470.00p 0.85% Compass Group (CPG) 1,926.00p 0.84%
FTSE 100 - Fallers
Ocado Group (OCDO) 737.80p -8.69% Berkeley Group Holdings (The) (BKG) 4,317.00p -3.14% JD Sports Fashion (JD.) 157.95p -2.35% WPP (WPP) 925.40p -1.64% Fresnillo (FRES) 939.80p -1.53% CRH (CDI) (CRH) 3,671.00p -1.52% Sage Group (SGE) 760.20p -1.50% St James's Place (STJ) 1,249.50p -1.34% Ashtead Group (AHT) 5,004.00p -1.30% Unilever (ULVR) 4,175.00p -1.30%
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