Market report: City fears Enterprise hit as oil and miners jitters spill over to pubs

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Shares in Enterprise Inns trickled lower today as investors began to fret over the pub operator’s stretched balance sheet.

Number-crunchers at Barclays slashed their stance to underweight with an 80p target price, causing the shares to fall 0.75p to 86.25p. 

They warned that investors dumping high-yield bonds in the oil and mining sectors might also target pub stocks, which are among the most indebted on the stock market. That could be bad for Enterprise, which was picked out by the broker as the most vulnerable pub group because it has the highest debt-per-earnings and a big refinancing to complete in the next couple of years.Cheaper petrol and no interest rate rise in the near future might lead to more pints pulled, but Barclays fears for the introduction of the National Living Wage in April and its move to a managed estate.

The FTSE 100 made steady progress ahead of the jobs reports in the US, rising 32.25 points to 5931.01 with volumes thin as tends to happen on the last day of the trading week.

After such a big surge yesterday, it was inevitable that the miners would become victims of profit-taking today. Glencore, up 16% yesterday, sank 1.88p to 97.8p, and Rio Tinto drifted 17.5p lower to 1840.5p.

FTSE 250 software solutions firm Micro Focus advanced 11p to 1351p, an unusual response to major shareholder, the Wizard consortium, trimming its stake. The investor group — including US hedge fund Elliott, which made it onto the register after its merger with Attachmate — sold 28 million shares for £357 million, much more than expected. The sale edges it closer to the exit, which will free up shares for keen buyers.

Elsewhere, the sale of its firefighting arm Akron Brass to IDEX sparked a 7p rise to 105.75p from Premier Farnell, which impressed investors with the $224 million (£154 million) price.

On AIM, ImmuPharma, the drug discovery firm which counts institutions Odey Asset Management and Aviva as investors, dropped 2.85p to 26.15p when it revealed plans for a discounted placing at 26p a share to raise £3.1 million, and a £4.4 million subscription with Lanstead Capital — a prominent small-cap backer which specialises in drip-feeding cash to companies in exchange for shares.

Results of the Phase III trial of Lupuzor, its flagship lupus drug, are expected at the end of next year.

Source Article from http://www.standard.co.uk/business/market-report-city-fears-enterprise-hit-as-oil-and-miners-jitters-spill-over-to-pubs-a3173961.html

February 6, 2016 |
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