Yesterday’s trading: Flood worries sink Marston’s
Fears that any statement will effectively be a profits warning dragged shares of the Pedigree bitter and Banks’s Ale company down to 385p before they closed 16p off at 392p. The year’s high was 477p.
Marston’s, formerly known as , have hundreds of pubs in the West Country and Wales, the worst affected areas.
Bears roared that some 100 tenanted pubs, which have been under more than three feet or so of water for the past week and unable to open their doors for business, could be under-insured. Many live-in ‘guvnors’ of tenanted pubs always cut corners. If true, Marston’s could drown in legal paper work in the coming months.
Marston’s in May toasted a 7% sales rise after increasing its focus on food. That attracted more families to its estate and underlying profits rose to 42m.
Some 90% of its pubs have gardens, patios and some form of outside trading area, and so business was also not too affected by the UK smoking ban. Punters can now only fill their wellington boots with muddy water and are staying at home, upstairs!
Bury St Edmunds brewer also drowned in a sea of selling and closed 36p down at 1035p. lost 31p to 1225p, while fading hopes of a bid from Starwood of the US dragged leisure giant 65p lower to 1750p.
Buyers raised their glasses to Peroni brewer though and the shares touched 1327p before closing 7p better at 1305p.
and Lehman have recently sung the South African group’s praises and raised their target prices above 14.
Rumours are also doing the rounds again that America’s Altria, the world’s largest tobacco group, is on the verge of selling all, or part, of its 29% stake in SAB.
Resilient and even showing a 34.9 point rally by lunch-time, the fragile Footsie fell away late to finish 44.4 points off at 6,454.3 on continuing fears of higher UK interest rates. New Chancellor Alistair Darling said he would be ‘resolute on inflation’ implying there could be another % hike in the Bank of England’s locker. Wall Street thankfully behaved itself in early trading, recovering 105 points following forecast-beating quarterly earnings from and .
Cautious comments from Goldman Sachs about how a lower oil price is affecting power prices left down a further 26p to 482p for a two-day decline of 50p.
Rumours of a profits warning fuelled further selling of Argos-to-Homebase group , 15p off at 412p.
buzzed 5p higher to 328p amid talk Brandes Investment Partners was adding to its 4% shareholding. Charles Dunstone’s climbed 13p to 353p with super optimists touting a jackanory that (0.3p dearer at 156p) could be interested in making an offer.
The closing of some short positions after Tuesday’s collapse on yet another profits warning helped recover 7p to 154p. Oriel Securities has slashed its full-year pre-tax profit forecast to 135m and cut its target price to 125p from 150p.
Former shop broker sparked heavy selling of Industrial engineer after publishing a scathing ’sell’ note including a much lower target price of 119p. The shares were heavily sold down to 290p before rallying to finish at 310p, still 33p down on balance.
Analyst Chris Dyett said: ‘Market expectations have decoupled from reality for a company that has consistently over-promised and under-delivered.’ He has downgraded 2007 revenues forecasts to 3.8m from 5m and to 8m from 9m for 2008. Meanwhile, Pursuit’s current broker Cenkos maintains a target price above 5 because it expects imminent newsflow to fully justify a market capitalisation of 200m.
Lara Croft computer games maker Entertainment were zapped again as investors continued to jump ship after Tuesday’s shock profits warning. It slumped 24p more to 374p for a two-day collapse of 146p. Dealers reckon its now ripe for takeover and are sure that property tycoon Robert Tchenguiz and 15% shareholder will sound out buyers. Warner Brothers sits on 10%.
BEING granted Recognised Investment Exchange status by the is big news for PLUS Markets, p
off at 29p. It will allow many more fund managers to consider investment in PLUS quoted companies. And financial houses will transact more business ‘on-exchange’ as it is now a ‘prescribed market’ with oversight. (16p off at 1379p) beware.
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