BON.L Share News (BON)

LONDON (Alliance News) - A raft of strong trading updates from retailers including Primark, Dixons, Home Retail, and Halfords effectively brought the Christmas retail reporting season to a close Thursday, and confirmed that the period had been positive overall despite weak trading for some of the biggest names.

Online shopping has been growing strongly for several years, but last Christmas has confirmed Britain as a nation of internet shoppers, confident in the ability of retailers and delivery companies to get products to the door on time and as described on the website, even at the last minute. There still remains plenty of room for online businesses to grow.

Home Retail Group, owner of Argos and Homebase, highlighted the need for a strong online business. It had been slow in developing its online presence, but reported a 3.6% rise in sales at Argos, with online sales now representing 46% of the GBP1.81 billion total. The increase was fueled by sales of electrical products such as video gaming, tablets, televisions and white goods. Homebase reported a 2.3% increase in sales in the 18 weeks to January 4.

Dixons Retail reported a 2% rise in group sales, but its UK & Ireland operations posted growth of 4%, or 5% on a like-for-like basis. It said it had done particularly well in the discount periods, with the "Black Friday" weekend better than it expected and TVs and laptops flying off the shelves on Boxing Day. However, like several peers, it remains cautious about the next few months.

Among other retailers reporting Thursday, Halfords Group reported a 6.6% increase in sales in the 15 weeks to January 10, with like-for-like revenues up 5.2%. It too did well online, with sales at a record as they rose 13.8% to represent 11.7% of total sales.

Primark, owned by Associated British Foods, continued its stellar performance, reporting a 14% rise in sales in the three months to January 4. It is one business that doesn't need a strong internet business to carry on growing as shoppers continue to flock to its stores, attracted by the low prices. It said sales were driven by an 8% increase in selling space strong like-for-like growth, and as it crammed goods into the space in the stores. It expects further growth this year as it opens yet more space.

Finally, online grocer Ocado said gross retail sales rose 21.3% in the six weeks to January 4, including a near 29% rise in the seven days prior to Christmas. It had added capacity in the run up to the period and this helped it meet higher demand. Chief Executive Tim Steiner was another to warn that the overall environment remains difficult, with consumer sentiment still subdued.

Ocado's partnership with Wm Morrison Supermarkets has just started, with the first deliveries made on January 10. Morrison was one of the clear losers in the sector over Christmas, mainly because of its lack of online offering.

There was more news about another of the sector losers, Debenhams. Mike Ashley's Sports Direct International, which bought a 4.6% stake in the department store operator on Monday and pledged to work with it to improve its performance, has now sold the stake. It has instead entered into a put option agreement for a 6.6% stake in Debenhams, which will activate if Debenhams shares fall below a certain level in the future. Its maximum exposure to the option is about GBP64 million.

Outside retail, there was further evidence of the housing market recovery Thursday as the latest survey from the Royal Institution of Chartered Surveyors showed house sales reaching their highest level since March 2008.

Bovis Homes became the latest listed housebuilder to report a continued sharp improvement in its performance, with Chief Executive David Ritchie saying its forward order book is in its best position for many years. It expects to meet market expectations for a significant increase in 2013 pretax profit as completions and selling prices increased.

Outside the UK, International Monetary Fund Managing Director Christine Lagarde said she expects the global economic recovery to continue in 2014, although she warned that it was still fragile and wasn't reducing unemployment. "The global growth is still too low, too fragile, and too uneven," Lagarde said. "It is not enough to create the jobs for the more than 200 million people around the world who need them."

The US economy expanded at a moderate pace in the final weeks of 2013, according to the Federal Reserve's collection of anecdotal information known as the Beige Book. Two-thirds of the 12 districts reported increases in hiring, with most districts expecting the "more of the same" into the new year. Three-quarters of the Districts indicated that retail activity had increased since the last Beige Book report. All Districts reported year-over-year increases in manufacturing activity. The recovery in housing continued in most regions.

In Europe, Eurostat has confirmed that eurozone inflation eased to 0.8% in December, from 0.9% in November.

New car sales in Europe, meanwhile, surged in December, growing at their fastest pace in four years as the region's auto industry shows signs of recovering from the sharp downturn during the economic crisis. Registrations in the EU jumped 13% year-on-year to 906,294, helped by heavy discounting by many car dealers across the region, data from the Brussels-based European Automobile Manufacturers Association showed. December's rise was the biggest since December 2009.

Elsewhere, more than half of Egypt's eligible voters cast their ballots in a referendum on a draft constitution that marks the first major step in the country's military-backed transition to democracy, an official said on Thursday, citing initial results. "Vote counting is under way. Results available so far point to a high turnout exceeding 55%," police spokesman General Abdel-Fatah Othman said. "Voters who have approved the constitution may exceed 95% of all those who cast their ballots," he told the private broadcaster al-Hayat.

In Thailand, anti-government protesters marched on government offices on the fourth day of a "Bangkok shutdown" campaign that is showing signs of flagging support. The protesters, which have occupied seven intersections in the capital since Monday, held marches on Revenue Department offices in the city and the Health Ministry in a bid to encourage civil servants to stop work and join their cause.

--------

FTSE 100: Up 0.1% at 6,828.64
FTSE 250: Down 0.6% at 16,201.40
AIM ALL-SHARE: Up 0.1% at 884.05
GBP-USD: 1.6340
EUR-USD: 1.3615
GOLD: USD1,240.40 an ounce
OIL (Brent): USD105.88 a barrel

--------

KEY UK CORPORATE NEWS:

FTSE 100: Rio Tinto said it increased production for iron ore and other metals in the fourth quarter, achieved record shipments and slashed its annual costs. Experian reported a 7% increase in revenues in its fiscal third quarter, 5% on an organic basis, with all business lines contributing. It also unveiled a boardroom shuffle with Chief Executive Don Robert replacing John Peace as chairman and Chief Financial Officer Brian Cassin replacing Robert. Associated British Foods' Primark may have reported another stellar quarter, but its sugar business was weaker than expected, and it now expects an even bigger fall in profits for the year from the division. Aberdeen Asset Management said clients withdrew GBP4.4 billion in its first-quarter, as investors turned against Asian and emerging markets. Aberdeen said it attracted GBP6.8 billion to its funds in the last three months of 2013, but saw GBP11.2 billion of funds leave.

FTSE 250: Ladbrokes expects 2013 operating profit to meet the middle of analysts' current forecasts of between GBP129.8 million and GBP151 million, and intends to keep its total dividend at the 2012 level of 8.90p. Aegon has said it plans to sell a 7.5% stake in private equity business SVG Capital. Premier Oil said 2013 sales will be up thanks to higher total production increases, but profits will be hit by impairments for future abandonment costs and related non-cash impairment costs. ComputaCenter said that it now expects its results to be slightly ahead of previous expectations, reporting a 6% rise in revenues as good performances in the UK and Germany offset declines in France. Xaar expects full-year adjusted revenue to be about GBP134 million, up from GBP86.3 million in 2012. Booker sales grew 19.1% in the 16 weeks to January 3 as it integrated the Makro business. Like-for-like sales at Booker itself were up 2%, or 4.1% excluding tobacco.

AIM: Pilat Media Global is a big gainer after it received and recommended a 95 pence-a-share takeover offer from SintecMedia Ltd. The offer valuing Pilat Media at GBP63.3 million. Plutus Resources is up after acquiring a 25% stake in Attune Energy Ltd for GBP125,000 in shares. AEL is a newly formed power generation company, which provides flexible stand-by energy to suppliers during periods of peak electricity demand or grid instability but has yet to produce any revenues. Keywords Studios is another gainer after it acquired video games voice-production services company Liquid Violet Ltd for an initial consideration of GBP300,000. It'll pay up to GBP1.3 million more if the business meets certain financial targets in the three years to March 31, 2016. Shares in recent debut Bonmarche Holdings, the mature-women's clothing retailer, after up after it reported a 6.3% rise in total sales for the quarter ended December 28, 2013. Online sales surged by almost 60%. Like-for-like sales in its stores were up 4.7% for the period and 6% over the Christmas period.

--------

AFTERNOON WATCHLIST: US CPI, US Initial Jobless Claims, Treasury Secretary Lew Speech, Philadelphia Fed Manufacturing Survey, FOMC Member Williams speech, Fed's Bernanke Speech, SNB Chairman Jordan Speech

--------

Friday's Key UK Corporate Events

T Clarke Interim Management Statement
Stobart Group Interim Management Statement
Evraz Full Year Operational Results
Record Trading statement
Spectris Trading statement
William Hill Trading statement

-------

Friday's Key Economic Events

00:00 Russia Foreign Trade
05:00 Japan Consumer Confidence Index
07:45 France Budget
09:30 UK Retail Sales
10:00 EU Construction Output
12:15 UK MPC Member Broadbent Speech
13:30 US Housing Starts
14:15 US Industrial Production
14:55 US Reuters/Michigan Consumer Sentiment Index Preliminary

-------

By Steve McGrath; stevemcgrath@alliancenews.com; @stevemcgrath1

Copyright 2014 Alliance News Limited. All Rights Reserved.