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The newly combined Ahold Delhaize has “kicked off with good momentum” after both Ahold and Delhaize Group reported strong second quarter results this morning.

Ahold posted a 3% increase in second quarter sales to €9bn in the quarter to 17 July, which was up 4.4% excluding petrol at constant exchange rates. The results were boosted by improving volume sales trend in the United States and continued strong online consumer sales in the Netherlands, up more than 30%.

Ahold’s underlying operating income of €355m in the quarter, up 8% at constant exchange rates

Delhaize saw revenue growth of 4.3% to €6.3bn at identical exchange rates during the quarter to 30 June. Comparable store sales growth was 2.9% in the U.S. (3.9% real growth), 2.1% in Belgium and 8.7% in Southeastern Europe

Delhaize’s underlying operating profit of €247m, up 12.1% at constant exchange rates.

The merger between the two was effective on July 24, after the end of both companies’ second-quarter reporting periods.

Dick Boer, CEO of Ahold Delhaize, said: “We have started our new chapter as Ahold Delhaize with good momentum, with these two strong sets of pre-merger results. Building on our solid financial foundation, common values and great local brands, we are driving ahead with full energy to deliver even more for customers and communities, associates and shareholders.

“We look forward to continuing to shape Ahold Delhaize, with a strong commitment to delivering great food, value and innovations for customers across our 11 markets, both in stores and online.”

The group is “confident” it will meet our synergy target of €500m on an annual run-rate basis by mid-2019. In 2016, synergies are expected to positively impact operating income by €30m in the second half of 2016.

The merger is expected to generate €350m in one-off costs, of which €61m has been booked by Ahold and Delhaize year-to-date 2016 and €80 million is expected for the second half of 2016.

Morning update

It’s decidedly quiet out in the markets this week as we head towards the bank holiday.

There are no releases of not on the London Stock Exchange this morning, though the CDI Distribute Trades survey will be released later this morning.

The world’s largest pork producer, China’s WH Group has announced Chinese private equity firm CDH Investments will sell more than 10% of its stake in the group to raise HK$9.25bn (£900m).

WH Group, owner of Smithfield Foods, told the Hong Kong stock exchange that CDH will sell 1.55 billion shares (10.6% of the company) for HK$5.95 each. CDH will reduce its stake to 19.8% of the Chinese pork giant from its current 30.4% on completion of the share sale.

The FTSE 100 has slipped another 0.7% to 6,788.4pts so far this morning.

Early fallers in grocery/fmcg include Majestic Wine (WINE), down 1.8% to 422.3p, WH Smith (SMWH), down 1% to 1,586p and FeverTree (FEVR), down 1.3% to 989.5p.

Risers include McColl’s Retail Gropu (MCLS), up 3.4% to 169.8p, Premier Foods (PFD), up 1.5% to 52.3p and Hotel Chocolat (HOTC), up 1.2% to 212p.

Ahold Delhaize shares were up 1.4% this morning €21.90 in Amsterdam. 

Yesterday in the City

The FTSE 100 fell back 0.5% to 6,835.8pts yesterday, led down by a fall in mining stocks.

The grocery/fmcg sector was also caught up in the general market gloom, with a number of big industry players suffering share price falls of 1% or more.

The shine came off Tesco’s (TSCO) share price jump on Tuesday after the Nielsen and Kantar market share data, yesterday falling 1.3% to 164.2p.

Compass Group (CPG) was down 1.8% to 1,469p, Tate & Lyle (TATE), down 1.2% to 729.5p, Associated British Foods (ABF), down 1.1% to 2,968p, British American Tobacco (BATS), down 1% to 4,800.5p and Unilever down 1% to 3,526.5p.

One bright spot was Ocado (OCDO), which rose back to the 300p mark after jumping another 3.1% yesterday. The stock is now up by around 45% since late June.

Other risers yesterday included McBride (MCB), up 3.9% to 161p, Carr’s GRoup (CARR), up 3.6% to 152.3p and PayPoint (PAY), up 2% to 1,020p.

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