London Markets: Brexit stockpiling shows up in manufacturing data and bakery results

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Labour Party leader Jeremy Corbyn (right), accompanied by Labour’s Faiza Shaheen, has a photograph taken with a customer at a Greggs bakery shop during a visit to Chingford in east London. Greggs on Tuesday reported slowing sales.

The extent of stockpiling ahead of a possible hard Brexit was on display in Tuesday in areas ranging from manufacturing data to a bakery’s results.

U.K. manufacturing PMI rose to a four-month high in September — but driven by stockpiling, IHS Markit said.

Levels of output, new orders, new export business and employment fell while those for stocks or purchases and input buying volumes rose, IHS Markit said as the headline index rose to 48.3 in September from 47.4 in August.

Baker Greggs GRG, -8.42%  meanwhile said it was preparing for the potential impact of the U.K.’s departure from the European Union “by building stocks of key ingredients and equipment that could be affected by disruption to the flow of goods into the U.K.” The company said it’s seeing pressure on both labor and food input costs.

Greggs said it was reiterating its full-year forecast as same-store sales in the 13 weeks to Sept. 28 rose 7.4%, which is slower than the 9.4% growth in the nine months to Sept. 28. “This was inevitable at some point, and whilst the company’s guidance remains unchanged, this may encourage (remaining) momentum investors to look elsewhere,” said analysts at Barclays of the slowing sales growth.

Greggs shares tumbled 6.4%.

The FTSE 100 UKX, -0.40%   more broadly declined 0.12% to 7399.39.

Gainers included plumbing and heating products distributor Ferguson FERG, +4.17%  , which rose 4.6% as it reported a rise in pretax profit for the fiscal year on 6.1% revenue growth, and said it was outperforming the U.S. market.

AstraZeneca PLC AZN, -1.14%  slipped 1.7% as it said the U.S. Food and Drug Administration hadn’t approved its new drug application for PT010, an inhaled treatment for chronic obstructive pulmonary disease.