UK stocks are slightly lower in early trade with the FTSE 100 giving up 8 points or 0.1% to 6,770 points while European markets drop further on growing trade concerns.
Classic defensive sectors like Beverages, Pharmaceuticals and Tobacco are steadying the ship while cyclical sectors such as Oil Services and Technology are weighing.
However Utilities, which are usually considered defensive, are also weak on fears that a failure to pass the Brexit Bill in parliament on Tuesday could usher in a Labour government with an agenda to privatise strategic sectors like power supply.
INTERSERVE IN YET MORE TROUBLE
At a stock level, the biggest mover today is outsourcer Interserve (IRV) which crashes 53% to a 30-year low of 11.5p after it releases a deleveraging plan which could mean turning ‘a substantial proportion’ of its £650m debt into new equity.
This would cause huge dilution for existing shareholders as the firm’s equity is now only valued at £17m and would hand control of the company to its creditors.
Interserve has been in short-sellers’ sights for months despite repeated assurances from CEO Debbie White that its fundamentals were sound and public support from government officials.
MORE SMALL-CAP WINNERS AND LOSERS
Shares in photobooths-to-laundry machines operator Photo-Me (PHTM) slide 10% to a four-year low of 95p after the company releases results for the six months to October which miss market estimates.
First half revenues were down 2% to £120m and pre-tax profits fell 21% to £26m as sales of machines have experienced ‘large order lags’ especially in the UK.
The outlook also fails to inspire as it suggests that consumer confidence, the economy and exchange rates all have the potential to scupper its targets.
FTSE 250 retirement planning firm Just Group (JUST) sees its shares jump 17% to 96p on relief that the latest ruling from the Prudential Regulatory Authority isn’t more onerous.
In its response the firm highlights the fact that transitional relief will be kept for equity release mortgages which were taken out before 2016. This was a big source of concern for shareholders.
Shares in intellectual property developer IP Group (IPO) dip 2% to 105p despite news that portfolio company Avacta (AVCT:AIM) has signed a major new deal.
Avacta, in which IP Group owns a 17% stake, has signed a development partnership and licence agreement with South Korean firm LG Chem Life Sciences potentially worth up to $310m.
Further down the market shares in small-cap leisure operator Hollywood Bowl (BOWL) surge 8% to 199p after results for the year to September beat market forecasts.
Sales were up 6% to £120m driven by higher spending per customer and new openings and the company has secured several new properties with plans to branch out into indoor golf.
The firm also announced a special dividend of 4.3p per share as well as an increase in the ordinary dividend to 6.3p per share so even with today’s rally the shares are still yielding over 5%.
