Investors will be coming to equity markets on Wednesday hoping for some sort of recovery from the sea of red in yesterday’s huge sell-off in UK stocks.
The FTSE 100 benchmark slumped 1.75% to 7,158.76 in trading on Tuesday after President Trump again spooked investors, but the early signs in London are not hugely promising. The UK’s leading index is off another 15 points in early deals to 7,143.27, while midcap and smaller company indices are also lower.
A hefty profit warning from media agency M&C Saatchi (SAA:AIM) doesn’t set a very positive tone on Wednesday. While the ad firm remains a relatively small player in its market, a warning that its results for the first six months of its financial year will be ‘significantly below’ expectations because of weak trading in the first quarter and higher costs will do little for wider confidence.
M&C now expects underlying profits to be between 22% and 27% below last year, while the company says it will be forced to make £11.6m adjustments to its results for last year and 2019 following an independent review by PwC.
Shares in the company have collapsed in early trade, falling 47% to 76.6p, slashing its market value from £136m to just £72m.
VIOLENCE ESCALATION FORCES SHUTDOWN
Mining giant Rio Tinto (RIO) has had to halt all mining operations and downgrade its titanium output guidance at Richards Bay Minerals in South Africa following an escalation in violence in the communities surrounding the operation.
The mining company said a Richards Bay Minerals employee had been shot and seriously injured in recent days amid an escalation in violence against staff.
While these are worrying developments for the company and its employees investors refuse to over-react, Rio’s shares dipping just 0.7% in Wednesday trade to £41.45.
Financial services firm Impax Asset Management (IPX:AIM) said it would seek to increase its dividend payments following strong annual performance as profit jumped 29% on the back of a rise in net assets.
Impax shares nudge 1p to 299p.
‘In the light of the company's strong financial position and growth prospects, the directors now regard it as appropriate to move to a policy of paying, in normal circumstances, an annual dividend within a range of 55% and 80% of adjusted profit after tax,’ the company said.
The proposed increase in dividend payments would be put to a shareholder vote on 19 March.
MORRISONS EMBARKS ON STRAIN REIGN
Strain was the company's chief finance and commercial officer and had been chief financial officer since 2013.
Morrisons’ shares remain largely flat at 195.4p.
Vodafone (VOD) said it would partner with Amazon to offer cloud computing services to businesses in Europe. Provided by Amazon Web Services, they would allow developers to build applications that serve end users over a 5G network.
Vodafone said Amazon Web Services' Wavelength product would provide computing capabilities to developers, Internet of Things applications and devices.
Vodafone shares dip 1% to 144.2p as investors remain concerned about intense competition, cash flows and dividends at the mobile network.
Cafe, bar and restaurant operator Loungers (LGRS:AIM) has slashed losses on higher revenue as the company rolled out new sites, sending its share price up nearly 3% to 203p, valuing the business at £188m.
For the 24 weeks to 6 October, pre-tax losses narrowed to £2.5m from £4.3m as revenue grew 22% to £79.8m. Like-for-like sales rose 5.4%. The uptick in performance was driven by new site openings and strong underlying sales growth in its existing estate, the company said.
Central Europe focused spirits producer Stock Spirits (STCK:AIM) saw its share price rise 3% to 193.4p after reporting a 25% rise in annual profit, boosted by strong vodka sales in Poland and rum sales in the Czech Republic.
Pre-tax profit for the year through September increased to €38.2m, up from a profit of €30.7m on-year. Revenue rose 11% to €312.4m.
The company declared a full-year dividend of $0.0894 per share, up 5.1% on-year.
Fast fashion retailer Quiz (QUIZ:AIM) continues to struggle as it posted an 85% collapse in pre-tax profits for the six months to 30 September. The on and offline retailer reported £600,000 of pre-tax profit, compared to £4.2m in the same period last year.
Quiz says online sales rose 12% and international revenue climbed 3% but profits were hit by ‘onerous’ shop leases amid a difficult retail environment. UK sales tumbled 11% to £31.3m, sending the share price plunging 14% to 14.4p.