Market report: Devro stuffed as profit alert leaves a bad tasteComments Off on Market report: Devro stuffed as profit alert leaves a bad taste
The City turned its nose up at sausage-skin maker Devro today after its shares plunged more than 20% on a profit warning.
The firm, headquartered near Glasgow, said that “based on current trends” sales next year are expected to be around 10% lower than previously thought.
Profit forecasts were also downgraded — although it did not clarify by how much — and the shares dived 46.93p, or 21%, to 179.07p.
Devro, which clung to its profit forecasts for 2016, also revealed the lower sales would mean under-used capacity in some areas.
To combat slowing sales growth, the company said it would start developing new products and make its manufacturing more efficient at a cost of £3 million, which will be taken in the final quarter of the year.
The wider market continued to rally after Donald Trump was elected US President.
The FTSE 100 was up 46.76 points to 6958.60 and threatened to break 7000 in early trading as investors, initially fretting over his victory, bet that the Republican candidate would actually be good for business.
“President Trump’s acceptance speech soothed many nerves and the hope is that we will see a calmer and more sensible version of Trump,” said Naeem Aslam, chief market analyst at Think Markets.
Miners surged as metals prices rose on Trump’s win, and construction and defence shares were also up in the hope of increased spending on infrastructure and weapons.
Private hospitals group Mediclinic slumped 63p, or 6.9%, to 857p after its earnings per share dropped 26% in the first half because of having to issue shares to buy UAE-based Al Noor — a deal which propelled the group, which has a near-30% stake in the UK’s Spire, into the FTSE 100 earlier this year.
The South Africa-based company also warned that Al Noor’s operating performance had been poor in the first half.
Interim results left National Grid 37.6p cheaper at 967.9p. The company said operating profits improved 1% to £1.85 billion.
Private-equity investor 3i was also in the red after its half-year results. Shares fell 27.5p to 628p despite it having returned more than £1 billion to shareholders in the period, when it revelled in the pound’s weakness.
Investors cashed out of William Hill, which fell 4.1p to 287.9p as shareholders counted the cost of Trump’s victory, paying out big sums to punters.
Hopes that investors could salvage some value in their once-sacred Gulf Keystone shares were dashed today as bidder DNO said it would now only make an offer “at a meaningful discount” to the previous $300 million (£240 million) bid. Shares in the Iraqi oil firm were up 0.02p at 1.21p.