Doubts continue to shroud the immediate prospects of UK outsourcer Capita (CPI) as it confirms that it is on track to hit full year profit targets but warns of possible more contract fall out.
Shares in the £3bn FTSE 250 group sink more than 8% to 428p in early trade on Thursday, the biggest loser on the FTSE All Share index. The drop comes after a statement saying that upcoming work is unlikely to provide an immediate boost as the overhaul of its business continues under its new chief executive, Jonathan Lewis.
There has been some investor concern since half year results in September, with Capita noting that it had lost several public sector contracts, and that the outlook for new work remains 'subdued'.
Online grocery delivery business Ocado (OCDO) is suffering a slowdown in retail sales growth in its latest quarter, hurt by a shortage of drivers. Sales for the 14 weeks to 3 December rose by 11.6% to £373.8m, while average orders per week also rose, from 250,000 to 280,000 for an 11.1% increase.
But investors are clearly phased by the staffing issues, despite Ocado's CEO Tim Steiner saying he hopes the company is through the worst of it. Shares in the group dip modestly in early trade to 342.1p. Ocado last month signed a long-mooted international distribution deal that had investors chasing the shares.
SPORTS DIRECT FAILS TO IMPRESS
Controversy around Sports Direct (SPD) and director pay has done nothing to dent headline profits, the company posting half year underlying pre-tax profits up 22.9% to £88m.
But investors are less impressed by underlying performance before stripping out one-off costs, where earnings rose just 7%. That acts as a drag on the stock, which slides around 8% to 354.6p. The sports goods retail chain also says its new flagship stores, designed to move the discount brand up-market, are trading well.
A buy recommendation from investment bank UBS on BT (BT.A) sees the telco giant top the FTSE 100 leader board in early trade on Thursday. Aero-engineer Rolls Royce (RR.) is the biggest blue-chip faller, presumably in the absence of such City support.
FORMER GIANT ACCEPTS OFFER
Mining group Lonmin (LMI) has agreed to be taken over by South African miner Sibanye-Stillwater in a £285m all-share deal. Lonmin says the tie-up will create a larger and more resilient company, with greater geographical and commodity diversification.
But investors appear to retain some doubts. While the stock jumps more than 13% to 72.25p it leaves the valuation roughly £80m shy of the announced take out price. This may imply that Lonmin shareholders would rather have hard cash than stock in a South African miner.
DISTRIBUTOR BUNZL ON TRACK
British business supplies distributor Bunzl (BNZL) is guiding for roughly 15% more revenue this year than last, helped by new business wins in North America. That implies about £8.5bn of sales, give or take what the market was already anticipating.
Primark-owner Associated British Foods (ABF) and investment giant 3I (III) are among the handful of companies that will trade without entitlement to their latest dividend payout on Thursday. That trims around 0.7 points off the FTSE 100, according to Reuters’ calculations.
Oil markets rise on Thursday, lifted by a fourth straight weekly fall in US crude inventories, though climbing output capped prices well below the two-year highs reached earlier this week.
Gold inches up in early trade as the dollar was nearly unchanged after tumbling in the previous session following the US Federal Reserve’s widely expected decision to raise interest rates.
