Blue-chips are trading at record highs in early dealings, the fabulous FTSE 100 up 12.9 points at 7,709, despite fairly little in the way of UK corporate news to give direction and with all eyes on US non-farm payrolls later on.
Nevertheless, global geotechnical contractor Keller (KLR) climbs 28p or 3% higher to 987p on news the passing of the Tax Cuts & Jobs Act in the US will benefit its future earnings.
There’s also excitement as Keller says it is in talks to acquire Moretrench, a geotechnical contracting rival operating mainly along the east coast of the US. Enlarged Keller, the company insists, ‘will represent by far the most capable geotechnical solutions provider on the east coast and will be very well positioned for the expected long run renewal of infrastructure’ across the pond.
US tax reform legislation is also a positive for Abcam (ABC:AIM), the life science research tools supplier, though the high-flying shares settle back by 1.1% to £10.16.
CEO Alan Hirzel also says the Tax Cuts and Jobs Act will trigger a £6m-£7m one-off tax credit in Abcam’s current financial year. Abcam is on course for top line growth of around 10% for the full year, drawing confidence from 11% first half sales growth aided by its flourishing business in China.
Elsewhere, the news new car sales fell for the first time in six years last year, diesel demand down 17% due to higher taxes and negative government rhetoric, sees shares in the quoted motor retailers hit reverse.
Industry giant Pendragon (PDG) cheapens 3.8% to 26.7p, Lookers (LOOK) trades 3.1% lower at 98.5p, Motorpoint (MOTR) is marked down 3p to 205p, Vertu Motors (VTU:AIM) drops 1.25p to 49.35p and Cambria Automobiles (CAMB:AIM) sheds 0.5p to 59.5p.
Online musical instruments retailer Gear4music (G4M:AIM) trades 3.9% lower at 742p, despite news of brisk business over Christmas. Total sales surged 42% higher to almost £34.6m in the four months to New Year’s Eve, reflecting continuing strong growth in the UK and Europe. The Andrew Wass-guided music equipment purveyor is on track to achieve full year forecasts, the absence of further earnings upgrades explaining today’s share price fall.
Workwear-to-protective clothing provider Johnson Service (JSG:AIM) improves 2.5% to 145.2p as CEO Chris Sander says full year results are expected to be ‘slightly ahead’ of management expectations following strong second half trading.
Investors also applaud the £3.9m acquisition of Wrexham-based StarCounty, a specialist hotel and catering linen business which increases Johnson’s presence in the North West and the West Midlands.
Value butcher Crawshaw (CRAW:AIM) drops 3.3% lower to 11p despite reporting record sales in the week leading up to Christmas. This was due to the strength of its growing factory shop format, which offset the impact of lower footfall on the high street, where like-for-like sales fell by 6.1%.
Crawshaw also warns the softer consumer environment and the certainty of additional cost inflation flowing through will continue to act as a drag on the profitability of its high street shops.
