UK stocks give up yesterday’s gains with the FTSE 100 down 47 points or 0.7% to 7,003 as Engineering, Mining, Oil Services and Utilities stocks weigh on the market.
However tucked away at the end is a note that changes to the new energy price cap by Ofgem will result in a one-off hit to operating profits of £70m in the first quarter of next year.
That is enough to send the shares down 7% in early trade to 135p.
Thankfully the half year results from Severn Trent (SVT) seem to be free of surprises. Revenues are up 3.6% and pre-tax profits are up by 1.4% despite a jump in costs after water demand spiked during the hot summer.
Shares drift back 2.8% to £18.60 after a sharp move up ahead of the figures.
While revenues are up 8% in the last quarter, orders are down 4%. Demand from the oil and gas and power markets can be fairly lumpy with periods of high demand and low demand according to energy prices.
A drop in orders raises concerns that future sales may not meet estimates.
As well as strong performance in its core UK market the company has had a good nine months of trading in the US. Shares rise 4% to 230p in response.
Group half year revenues were up 4% and the company forecasts ‘modest’ growth for the full year while maintaining its margin target. Shares give up 1% to 309p.
Mitchells & Butler is more food-led than many of its rivals with brands such as Ember Inns, Harvester and Toby Carvery as well as more traditional pubs like Nicholson’s and Vintage Inns.