Marks & Spencer, Associated British Foods and Great Portland Estates

“The FTSE 100 made a positive start with US markets recovering from a sluggish start to close higher overnight, on better-than-expected manufacturing data and the Federal Reserve’s latest comments on interest rates,” says AJ Bell Investment Director Russ Mould.

Investors’ hopes for a long-awaited upturn in Marks & Spencer’s clothing business remains an aspiration with like-for-like sales down 8.9% in the first quarter as consumer confidence weakened in the run-up to the EU referendum. The group has become increasingly reliant on its food sales but these were 0.9% lower on a like-for-like basis, although they continued to outperform a deflationary market.

The outlook is looking sweeter for Associated British Foods following the fall in sterling. Third quarter revenues were boosted by sterling’s weakness against most of the group's major trading currencies and a further fall since the EU referendum means ABF no longer expects a drop in adjusted earnings per share for the full year. Sales at Primark continue to rise in the third quarter and overall underlying operating performance was ahead of forecasts with an improvement in its sugar business.

Developer Great Portland Estates is braced for London’s commercial property markets to weaken in the wake of the Brexit vote. Interest levels for its West End-focused portfolio are healthy but it expects some investment decisions to be deferred during negotiations to establish the UK’s trading arrangements with the EU. GPE’s development programme is materially de-risked, being 62% pre-let or pre-sold and its investment portfolio is almost fully occupied, with minimal exposure to financial services tenants.

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