The political crisis engulfing Italy continues to rattle investor cages across Europe and elsewhere around the globe, with Asian markets hit hard overnight.
The UK’s FTSE 100 is making an unsettled start to trading on Wednesday, early modest gains being gradually whittled away to trade around 5 points lower at 7,627.65. It follows a 1.3% fall on Tuesday as investors took fright at the prospect of another election in Italy and the implications of the country's commitment to the eurozone.
Yesterday’s profit warning from Dixons Carphone (DC.), wiping a fifth off the retailer’s market value, hardly helped calm the market mood.
On Wednesday there are new shocks for investors to digest as Ewan Stephenson, Royal Bank of Scotland’s (RBS) chief finance officer, surprisingly resigns. Stephenson apparently plans to ‘take up an opportunity elsewhere.’
Shares in the bank, which will start looking for a successor immediately, largely take the news in their stride, easing off 0.6% in early trade at 278.3p.
The timing of this news is interesting coming as it does on the same day that RBS will hold its annual general meeting with shareholders.
SORRELL TO LEAD NEW MARKETING BUSINESS
There’s also a surprisingly quick return to public company life for ad man Sir Martin Sorrell, the recently ousted boss of WPP (WPP). He has taken control of Derriston Capital (DERR), which will become a new advertising venture, S4 Capital.
Sorrell plans to use the vehicle to buy marketing firms, replicating the approach he took in the 1980s to build the world’s biggest advertising group. Derriston is currently valued at £2.85m with the shares suspended at 11.4p.
The online trading-driven shakeout of UK retailers has yet to run its course and there is likely more pain to come, one of the sector’s big landlords, Londonmetric Property (LMP), says on Wednesday.
This view comes as the £1.34bn real estate investment trust (Reit) reports a tripling in full year profit to £186m. But shares in the business modestly decline to 190.9p, with investors perhaps a little disappointed with the more modest dividend increase of 5%, to 7.9p for the year.
INVESTORS HOT FOR BODYCOTE
Heating and thermal engineer Bodycote (BOY) is firmly in demand after a strong start to 2018. The company now reckons it will outperform current full year expectations for headline operating profit, pitched at an average £133.1m, according to consensus.
That news sparks a 7% rally in the share price to 989.5p, valuing the business at £1.89bn.
The news is not so good for Photo-Me International (PHTM), which runs those passport photo booths among other things. Tough competition in Japan and issues at its laundry operations will mean a flat profits performance this year to April 2019.
Investors are far from impressed from what is effectively a profit warning, and the share price has collapse by nearly 21% Nin early trade on Wednesday to 120p.
DISCOUNT SUCCESS
British discount retailer B&M European Value (BME) reports a 25% rise in full year profit on Wednesday, saying its good valued products are winning over customers in a difficult economic environment.
B&M shares remain flat at 372.8p, presumably with investors anticipating harder times to come for the company against a clearly challenging UK retail environment.
British banknotes and passports maker De La Rue (DLAR) says operating profit fell 11.2% in the year to 25 March 2018, although that’s roughly in line with market expectations.
The company had previously lost a key contract to print UK post-Brexit passports and suffered delays in some other contracts. The shares are today 3% higher at 518p, although a far cry from the 700p highs of the past 12 months.
Oil prices inch down on Wednesday amid concerns that Saudi Arabia and Russia will pump more crude in the second half of the year in response to falling global crude inventories and rising consumer prices.
