Primark leads the charge as Footsie hits another high

High Street cheer helped propel the FTSE 100 to an all-time high yesterday amid fresh signs the economy is bouncing back.

On another record-breaking day on the stock market in London, the FTSE 100 rose to a peak of 8076.52 in early trading, its highest ever level.

The index later closed up 0.3 per cent, or 20.94 points, at 8044.81 – eclipsing the previous record set just a day earlier.

The rally was led by a bumper update from Primark owner AB Foods while shares in JD Sports rose after it bought a US rival for close to £900million.

Online grocer Ocado also made gains after a surge in sales over the past three months.

Sales boost: Shares in Primark-owner AB Foods jumped 9% to a six-year high after it said profits at Primark rose 45% to £508m in the six months to the end of March

In a separate report, S&P Global said its index of activity in the UK private sector rose from 52.8 in March to 54 this month.

That was the strongest reading for 11 months and well above the 50 cut-off between growth and decline – fuelling hopes the economy has rebounded strongly from recession at the end of last year.

Jason Hollands, managing director of online investment platform Bestinvest, said: ‘The news is a little less gloomy as London’s blue-chip index hits new records. 

‘And it’s high time, as UK equities have endured a long negative narrative around investor outflows, companies switching their listings overseas, and underperformance compared to the more exciting US market. Could this new record usher in a new dawn for UK equities?’

Shares in AB Foods jumped 9 per cent to a six-year high after it said profits at Primark rose 45 per cent to £508million in the six months to the end of March on the back of a 7.5 per cent rise in revenues to £4.5billion.

Business was boosted by higher prices and new store openings which helped offset a slow start to the period due to unseasonably warm weather over winter.

The return of tourists and office workers to city centres helped sales in London’s Oxford Street, Edinburgh and Birmingham. Its collaboration with pop singer Rita Ora also proved popular.

Group sales at AB Foods, which also owns grocery brands such as Ryvita, Twinings and Ovaltine, rose 2 per cent to £9.7billion and profit was up 39 per cent to £951million. 

The company said it was ‘on track to deliver significant growth’ over the rest of the year.

And in a boost to the City as other companies look to list their shares elsewhere, AB Foods chief executive George Weston said: ‘We are very comfortable being listed in London, we’ve been listed here for 70 years.’

Russ Mould, investment director at AJ Bell, said: ‘A surge in AB Food’s shares to their highest mark since 2018 may be indicative of a mood shift in London.’

Investors also cheered JD Sports after it agreed to buy US rival Hibbett for £899million as it eyes expansion across the Atlantic. 

Boss Regis Schultz said the deal will speed up JD’s growth in the US, where Alabama-based Hibbett has 1,168 stores, selling brands such as Nike and Adidas.

Danni Hewson at AJ Bell said: ‘The rather lacklustre performance of UK markets over the past couple of years has resulted in a rash of US companies snapping up cheap UK firms so it makes a nice change of pace to watch JD taking strides in the other direction.’