The chief executive of UK outsourcing group Capita (CPI), Andy Parker, will resign from his post as the company posted a massive slump in profits for 2016. Capita reported a 19% fall in full year underlying pre-tax profit, missing forecasts again. Capita was forced to downgrade 2016 profit hopes in early December as spending by clients in its IT Enterprise Services division weakened further, a move that prompted Parker to plough nearly £100,00 of his own cash into the shares to prop up the beleaguered stock.
That move clearly helped, the shares rally modestly since but not enough. The share price nudges a fraction higher on Thursday to 569.5p, valuing the business at about £3.7bn.
The FTSE 100 blue-chip index makes a steady start to trading on Thursday, edging around eight points higher to 7,391. That's despite financials heavyweights Barclays (BARC) and RSA (RSA) going ex-dividend, trimming around 1.8 points off the FTSE 100, according to Reuters' calculations.
Robust maiden full year results since its 31 October 2016 IPO spark an encouraging response from ConvaTec (CTEC) investors. The shares rise by more than 5% to 256.4p to head Thursday’s FTSE 100 leader board. The figures show underlying and adjusted operating profits increasing 8% to to $472m. Read Shares in-depth feature on the company's rarity factor.
Britain's Merlin Entertainments (MERL), operator of tourist attractions such as Madame Tussauds and Legoland, reported a modest 3.4% rise in 2016 pre-tax profit and says it remained confident it could deliver a good year ahead. But that’s not enough for investors who mark the stock 2.5% lower at 484.9p. They’ll claim that the growth is only because of positive exchange rates acting in its favour, with underlying operating profit down 6.2% when currencies are stripped out.
UK defence and aerospace engineer Cobham (COB) is looking to raise £500m in a rights issue to shore up its weakened balance sheet. The move comes after a ‘deeply disappointing’ performance in 2016 that sees underlying and adjusted pre-tax profits slump by more than a third to £175.2m.
Britain's biggest supplier of building materials, Travis Perkins (TPK), slumps 6% to £14.70 after reporting a 1% fall in full-year core earnings, hurt by a weak performance in its plumbing and heating business. That division’s future gis now under the microscope, being reviewed by management.
Challenger bank Aldermore (ALD) sidestepped capital strength concerns to post a 34% jump in full-year profit in 2016. The bank issued more mortgages and loans to homeowners as well as small and medium enterprises.