Marks & Spencer, Associated British Foods and Imperial Brands

“Blue-chips edged higher in the aftermath of gains on Wall Street and in Asia with markets firmly focused on the US elections, where various polls have Democrat candidate Hilary Clinton pipping Republican hopeful Donald Trump. In economic news, traders will cast an eye over UK industrial and manufacturing data, while in Europe it will be the Germany and French trade balances and industrial output in particular focus,” says AJ Bell Investment Director Russ Mould.

“High street giant Marks & Spencer’s shift from fashion and furnishings to food is set to continue apace with the closure of 60 clothing and home stores over the next five years while continuing to increase its Simply Food empire. M&S saw like-for-like clothing and home sales fall by 5.9% in the first half. M&S had a bad first quarter with like-for-like sales down 9% but it responded by changing its ranges to focus on more contemporary styles and since then it has seen full price market share increases for the first time in many years and its volumes are up.

“Cut-price fashion store Primark remains the jewel in Associated British Foods’ crown although the profit decline in its sugar business in recent years has been arrested. Primark added 1.2 million square feet of selling space during the year and more new stores are planned in the current financial year. But its operating profit margin fell from 12.6% to 11.6% due to the devaluation of the euro against the US dollar in 2015. Primark buys a substantial proportion of its garments in US dollars and sells them in euros and sterling.

“Tobacco giant Imperial Brands hiked its dividend following higher full year sales and profits. The group, which has been buoyed by its US acquisitions and sterling’s weakness, plans a new wave of investment totalling £300m which will be partly offset by cost savings.”

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