UK stock markets opened largely flat in early trade on Tuesday but there is plenty of corporate news to grab the attention of investors, not least banknote printer De La Rue (DLAR) crashing after warning that it may not survive.
Shares in the company plunge more than 16% to 146.6pm the worst performer on the FTSE All-Shares, after telling investors that there is a ‘material uncertainty that casts significant doubt on the group's ability to continue as a going concern’.
De La Rue plans to suspend dividend payments and review its business to cut costs, as its banknotes printing unit struggles with depressed margins amid stiff competition and growing popularity of digital payments.
For the full year to 30 September 2019, pre-tax profit fell 3.5% to £1.47bn, even as revenue increased 8.8% to £24.9bn.
Shares in the £32bn company fall more than 6.5% to £19.355.
The benchmark FTSE 100 index nudges 9.15 points higher at 7,405.44, while the FTSE 250 mid cap index rises 58 points to 20,761.16.
Silver and gold mining business Fresnillo (FRES) is the biggest FTSE 100 riser on Tuesday, adding 3.3% to 557.8p, presumably seen as a safe haven investment in an otherwise relatively volatile equity market.
STRATEGY WORKING FOR PETS
‘In short, our pet care strategy is working’, said chief executive Peter Pritchard.
But home improvements retailer Topps Tiles (TPT) continues to face difficulties. The company said it is facing ‘challenging’ trading conditions, with weaker consumer demand since the start of the general election campaign.
‘Against this backdrop of heightened political and economic uncertainty, like-for-like sales in the first eight weeks have declined’, it said. This translated into a 7.2% decline in revenues over the period.
The announcement came as Topps unveiled its annual results for the 52 weeks to 28 September, showing statutory pre-tax profits of £12.5m. This was slightly down on the previous year's £12.7m.
Topps Tiles shares trade around 1% higher at 65.8p in early trading, with investors relieved that things are not even worse.
Water utility Pennon (PNN) firmed 2.5% to 950p on booking a 22% rise in first-half profit after a focus on cost savings helped offset lower demand for water during a cooler summer. Pennon also lifted its dividend by 6.4%.
Specialist lender Paragon Banking (PAG) booked higher underlying annual profit and hiked its dividend by 9.3%. But this was largely anticipated by investors, explaining the modest 0.5p rise in the share price to 504p.
The company, however, also lifted its annual dividend by 5.4% after increased rental income helped it boost its underlying earnings.
Meat producer Cranswick (CWK) rose 2% to £32.76 as it reported a rise in first-half profit, led by increased wholesale and export demand for fresh pork and a contribution from the acquisition of Katsouris Brothers.