FTSE 100 Live 24 January: Burberry shares surge on strategy progress, pound rallies

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FTSE 100 Live (Evening Standard)
FTSE 100 Live (Evening Standard)

Forecast-beating sales today boosted Burberry turnaround hopes as the luxury goods group moved closer to a FTSE 100 return.

The shares have surged since new boss Joshua Schulman pledged in November to focus on outerwear and Burberry’s British roots.

Elsewhere, there was more gloom on the UK economy after a dip in consumer confidence and surge in the number of firms in distress.

FTSE 100 Live Friday

  • Burberry hails strategy progess

  • Rolls-Royce signs MoD contract

  • Big rise in number of distressed firms

Market update: Burberry shares rebound, FTSE 100 loses ground

10:26 , Graeme Evans

Forecast-beating sales figures fuelled the recovery of Burberry shares today as the luxury goods group moved closer to a FTSE 100 return.

The valuation is back above £4 billion after a 65% rise since new chief executive Joshua Schulman pledged in November to focus Burberry on outerwear and its British roots.

He hailed early progress on the plan today, revealing a 3% decline in constant currency sales for the festive quarter compared with City expectations for a 12% reverse.

The performance means Burberry is on track for breakeven in the March financial year, having racked up a loss of £51 million and axed its dividend in first-half results.

Sales in the Americas rose by 4% but fell by 9% in Asia Pacific, with demand for outerwear and scarves outperforming the market.

Schulman said: "We have moved at pace to advance our strategy to reignite brand desire, improve our performance and drive long-term value creation.”

Shares were 13% or 144p higher at 1214.5p in today’s session, having been as low as 571p when Burberry lost its FTSE 100 status in September.

Its performance helped the FTSE 250 index to improve 0.3% or 57.84 points to 20,578.23, with Dr Martens up 2.1p to 73p and Watches of Switzerland ahead by 10p to 541.5p.

The mid-cap benchmark outperformed the FTSE 100 index, which surrendered an initial rise at a record 8586.68 by later falling 30.13 points to 8535.07.

UK-focused stocks were under pressure as Marks & Spencer dipped 5.6p to 327.2p, Taylor Wimpey eased 1.65p to 116.95p and Lloyds Banking Group fell 0.8p to 61.7p.

A 1% lift in copper price meant mining stocks dominated the risers board as Antofagasta surged 75.5p to 1805.5p and Glencore added 9.5p to 383p.

A weaker dollar after Donald Trump urged the Federal Reserve to lower interest rates also helped to support the commodities sector.

Other risers included Diageo, which improved 27.5p to 2429p, and Prudential after a gain of 13.2p to 665.2p.

UK activity reading beats hopes, pound higher

10:19 , Graeme Evans