Two more big profit warnings hit the FTSE 350 mid cap index on Thursday as industrial textiles business Berendsen (BRSN) and engineer Amec Foster Wheeler (AMFW) see their share prices crushed because of weak trading.
Updates from Berendsen and Amec were delivered after a weak trading session overnight in the US and Asia though UK stocks opened the day flat at around 6,952 with roughly half the FTSE 100 gaining ground.
Shares in Berendsen fell 14.4% to £10.54 following a profit warning which said cost overruns in its UK healthcare and hospitality businesses would mean profit expectations for the year to 31 December 2016 are likely to be missed. Operating profit is now expected at around £160m a cut of roughly £7m from earlier analyst estimates. Investors don't see much of a read-across to Berendsen's UK rival Johnson Service (JSG:AIM), whose shares trade 0.6% higher at 107p.
Engineer Amec Foster Wheeler (AMFW) slumps 18% to 480p on a flaky outlook statement for 2017 which flags weaker performance in its oil and gas and solar markets and better contributions from mining and infrastructure. Management maintains trading remains on track but investors are not so sure and are also fretting about a spike in net debt to £1.1bn.
Pension deficit issues proved to the major drag for Barclays (BARC) in an otherwise decent set of third quarter results which saw the bank deliver an increase in its regulatory capital of around £820m. Net pensions liabilities increased £888m because of lower bond yields which are used in the model to estimate future payouts. Lower dividend payouts also contributed to the increase. Barclays says core earnings in the nine months to 30 September were £4.9bn, up 4% year-on-year, though third quarter earnings are a little weaker than the same period last year. Shares trade 0.4% lower at 181p.
Telecom giant BT's (BT.A) £12.5bn takeover of mobile phone network EE helped it deliver a 35% increase in sales to £6.0bn and a 24% gain in adjusted operating profit at £1.0bn in the first half of the year. Underlying sales growth was 1% and the company's defined benefit pension obligation almost doubled to £11.5bn from £6.4bn in March. Shares trade 0.2% higher at 388p.
Barratt Developments (BDEV) slides 2% to 442p alongside a number of other housebuilders at the bottom of the blue chip leaderboard including Persimmon, down 1.4%, and Taylor Wimpey (TW.), down 1.0%. Barratt is also trading ex-dividend on a 24.7p pay-out.
Global luxury car distributor Inchcape (INCH) is marked 8p (1.24%) lower to 635.5p despite motoring in with solid third quarter figures boosted by sterling weakness. Concerns centre on CEO Stefan Bomhard's comments that 'an anticipated slower top-line environment, the transactional currency pressure in Australia and uncertainty on the timing of a market recovery in North Asia impact the trading outlook for 2017. As such and as we increasingly look to leverage our global scale under the Ignite strategy, the Group is reviewing its fixed cost base to ensure we are appropriately positioned for the future.'
Troubled department store Debenhams (DEB) rebounds 2.4% to 55p on better-than-expected full year results, underlying pre-tax profits up 0.5% to £114.1m on mildly positive like-for-like sales growth and net debt reduced by almost £41m to £279m. Debenhams, where new CEO Sergio Bucher is nestling in the hot seat, says its shift towards non-clothing supported the performance, having delivered strong progress in beauty, gifting and food lines.
Building products specialist Alumasc (ALU:AIM) surges 8.6% to 155p on a trading update which says the company's performance since its 30 June year-end continued to be strong.
Note: Article amended to show Berendsen operating profit downgrade is £7m, not £30m as originally stated.
