A mixed day for corporate reporting leaves UK markets without firm direction in early trade on Wednesday as investors weigh Government intervention in defence contractor Cobham’s (COB) planned £4bn sale with stabilised oil prices.
There is also ongoing interest in what the US Federal Reserve may do with interest rates Stateside later today. Market watchers had been anticipating a cut but recent firm US economic data has called the cut into question.
The benchmark FTSE 100 index makes modest early progress, adding around 12 points to 7,332.40.
Cobham’s proposed £4bn sale to US private equity firm Advent International is to face the glare of a Competition and Markets Authority (CMA) investigation on national security grounds.
Cobham, which makes mid-air refuelling systems for military aircraft among other things, had won shareholder approval for the deal to go ahead but it now faces a probe by the CMA which will decide on whether the transaction operates, or may be expected to operate, against the public interest and should be referred to a phase two assessment, taking into account public interest issues.
Cobham shares remain largely unchanged so far, drifting just 0.5% lower to 159.6p. The Advent deal is worth 165p per share in cash.
FRANCE FALLOUT FOR DIY CHAIN
Struggling DIY group, Kingfisher (KGF), which owns B&Q and Screwfix, has reported a 6.4% fall in pre-tax profits to £353m for the six months ended 31 July 2019, compared to £377m in the same period in the previous year.
Kingfisher said that launches of new ranges and the implementation of a new IT system caused sales to drop in France.
Kingfisher sees its share price slide close on 2% to 198p on the results, although the stock has slumped from 266p since May.
The underlying loss in the half year was £32.2m, compared with a £28.4m profit a year earlier.
It will be a baptism of fire for new executive chairman Bill Berman, who is appointed today on an interim basis to replace outgoing non-executive chairman Chris Chambers, who will step down on 1 October 2019.
SIRIUS SLUMPS AGAIN
Sirius Minerals (SXX), which loss 50% of its value after admitting on Tuesday it was having trouble raising money to fund a fertiliser mine, has fallen again. The shares are down another 14% to 4p, having begun the week at 11.17p.
Shares in the company rallied 6.5% to £36.65 after unveiling record half year revenues of £40.2m, up 9%, and announcing a 25% hike to the interim dividend to 15p. Sales were strong in North America (up 33%), with China/Hong Kong showing improvement (up 5%), however the Rest of the World receded 8%.
Going the other way are shares in attractions software supplier Accesso Technology (ACSO:AIM), which slump 9% to 825p.
The fall comes after the company saw revenue below management expectations, though costs associated with the integration strategy were lower than originally anticipated, contributing to a lower than expected increase in the Group's expenditure base.
Revenue was down 6.8% from $54.4m to $50.7m.
Shares in the business rise more than 2% to £47.84 with investors also pleased by a 35p per share dividend being ratified today.