The shares of the UK’s leading attractions operator Merlin Entertainments (MERL) plunge more than 7% in early trade on Tuesday after revealing lacklustre trading at its Midway Attractions business.

Midway Attractions runs some of Merlin's biggest brands, including Madame Tussauds, The London Eye, Sea Life and The Dungeons businesses. But like-for-like sales at Midway have declined 0.7% so far this year, compared to the same stage in 2017.

While the company remains optimistic that the impact of previous terror attacks is abating and that it still expects to hit 2018 forecast 2018, investors are more cautionary, marking the stock to 344p, one of the largest declines on the FTSE All Share.

British housing developer Bellway (BWY) launched a cost savings program on Tuesday to boost margins after reporting a more than 14% rise in full year pre-tax profit but reiterating a warning about future margins.

The housebuilder reported pre-tax profits of £641.1m on sales 15.6% higher at £2.96bn. Bellway also says it has sold a record 10,000 homes in the full year to 31 July.

CALM RETURNS TO UK MARKETS

Overall markets are relatively calm after 10 days or so of volatility and share price declines. The leading FTSE 100 index nudges around 4 points lower in early trade at 7,025.37 although mid cap FTSE 250 stocks rally more than a 100 points.

British engineering company Meggitt (MGGT) raised its estimate for 2018 organic revenue growth to between 7% and 8% thanks to higher demand for its wheels, brakes, fuel tanks and other aeroplane parts.

The market had been anticipating a growth range of 4% to 6% before today’s update. That gives the share price a welcome lift, rallying nearly 6% to 522.8p, having lost around 13% of their value over the recent market shake-out.

Also on the front foot are shares in automated grocery delivery business Ocado (OCDO) thanks to positive analyst feedback following a site visit. Shares in the business head the FTSE 100 leader board with a 4%-odd rally to 827.6p, valuing the company at £5.78bn.

Peel Hunt number crunchers reaffirm their positive view of the investment story, calling Ocado’s Customer Fulfilment Centre in Andover ‘breath-taking,’ with the level of technology also impressing the Peel Hunt team.

INVESTORS SHRUG-OFF BAT MIXED NEWS

British American Tobacco (BATS), the second-biggest international tobacco company by revenue, cut its full year revenue target for next-generation products (NGPs) on Tuesday, citing a flat market in Japan and a product recall in the United States. Adverse currency movements will also help reduce earnings growth by 7%, the company confirms.

Shares in the FTSE 100 company decline by a fairly modest 1.2% to £32.92 with investors taking heart BAT’s commentary that it continues to see strong growth at its vaping business and that traditional tobacco business is performing well.

British power producer Drax (DRX) has agreed to buy Scottish Power’s portfolio of pumped storage, hydro and gas-fired power generation assets in a £702m cash deal. Drax stock rises 3.4% to 378.4p.

Equally interesting is that this move leaves Scottish Power, owned by Spanish energy group Iberdrola, as a wind energy pure-play.

Oil prices rose on Tuesday on signs Iranian oil exports this month have fallen from September ahead of US sanctions against Tehran that are set to start in November.

Gold prices held steady on Tuesday near the last session’s more than two month high as risk-averse investors sought refuge in the metal amid rising political tensions and economic uncertainty.

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Issue Date: 16 Oct 2018