Market report: FTSE 250 firm Clarkson is holed by shipping slump

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AS Britain sets sail for uncharted territory on HMS Brexit the perils of choppy trading seas were in evidence today as shipping services firm Clarkson crashed nearly 20% following a profit warning. 

The seafaring brokers, founded in 1852, the same year the Duke of Wellington died, said full-year profits will be “materially lower” after a drop in global freight rates due to economic uncertainty around the world. 

The FTSE 250 group’s industry earnings index for vessels, known as ClarkSea Index, is about 30% lower than a year ago, underscoring sluggish shipping trade. The shares hit the rocks and fell 386p to 1819p, 17.5%. 

As Clarkson investors puked, other shareholders on the raging Brexit seas steered into calmer waters, with the  4 July bank holiday in the US keeping trading volumes subdued. The FTSE 100 was flat, with the index down a mere 0.02%, or 1.40 points, at 6576.34 after briefly rallying above 6600. 

The now-familiar Brexit trade of piling into gold and selling property groups was in play again, with miners like Fresnillo rising 7.9%, or 140.37p, to 1900.37p and builders like British Land (down 3.5%, or 21.62p, at 586.88p) and Land Securities (off 39p, or 3.75%, at 1000p) feeling the heat. 

Away from Brexit, investors were none too pleased with FTSE 250 construction firm Kier’s plan to go on a diet. It is winding down divisions like its Caribbean building firm and considering selling the Mouchel Consulting business, which was part of Kier’s acquisition of Mouchel’s highway-fixing business, at a charge of £53 million. 

It added that steady trading and “strong order books” provide resilience in the face of Brexit-related “uncertainty”.The shares nudged down 18p to 1032p, some 1.71%.

Struggling defence firm Cobham, which makes everything from wireless gear for phone companies to the systems used to watch movies on a plane, got another boost from a contract extension.

Following Airbus’s decision to let it fit out its new A320neo planes, Cobham has been asked to extend its work on QantasLink’s 20 Boeing 717 aircraft for another 10 years. Shares were flat at 157.5p. 

In the small-cap space, Low & Bonar rose 6.28%, 3.75p to 63.50p, after selling its artificial grass business to grass yarn manufacturer Mattex Group for £27 million. 

Low & Bonar provided the yarns used on the Saracens rugby pitch at Allianz Park in London and has also helped fit United Arab Emirates’ top team Al Ain’s new stadium with astroturf.

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July 4, 2016 |
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